21st Century Construction Industry



21st Century Construction Industry

1 Executive summary of meeting held on 11th July 2006 at The Royal Society, London.

The essential points that were made by the speakers and in the subsequent discussions are as follows.

Nick Fry and Graham Miller (Honda F1)

Honda operates its business under tight process control and cost management, which it applied to the procurement of a new building to house a wind tunnel. They took a leading management role and made a considerable effort to make the whole project team share pride and commitment. In order to achieve this, they forced them all to spend a day together on Dartmoor. They inculcated in them the need for total perfection. ``That will do’’ would never be good enough. There had to be 100% inspection, with no short cuts. The usual construction industry concept of ``practical completion’’ was not acceptable. Those who failed to buy into the philosophy were replaced.

Above all else, buildings must be designed to serve their intended function; this must take priority over making them beautiful and so an in-out design process must be followed.

Wesley Harris (MIT)

Wesley compared the aviation and construction industries. He said that the latter is concerned with much the more complex system, and one that is much more diverse and adaptable. The construction industry has much less support from technical enterprise. Nowadays, both industries must pay attention to life-cycle sustainability and maintenance, and to the needs of the end user.

He talked about outsourcing and the challenge to make components manufactured in separate locations fit together perfectly. He stressed the importance of an information infrastructure.

John Lorimer (Manchester City Council)

John stressed the importance of working with end users. In the case of school buildings, these are the children. There is a huge responsibility to deliver buildings capable of producing a transformational environment. This needs good design, both to make a visual impact and to make the buildings fit for purpose. There needs to be an active effort to produce innovation, but it can also come from quiet progression. One must not be ashamed to use other people’s ideas and one should be ready to share one’s own ideas.

After the three talks, the meeting divided into three dialogue groups, where they discussed with each speaker in turn. They also considered possible topics for new Action Clusters.

At the end of the meeting, it was agreed to set up three new Action Clusters, in addition to the

one previously proposed on carbon management of buildings and businesses. Two of the new ones will address issues concerned with portfolio management, and the third will focus on brand issues.

21st Century Construction Industry

Summary of meeting held on 11th July 2006 at The Royal Society, London.

1 Attendees

|Cross-Industry Group |Organisers |

|18 members of the |Carl Abbott (Salford) |

|21st Century Construction Industry Group. | |

| | |

|Speakers | |

|Nick Fry - CEO Honda F1 | |

|Graham Miller – Director of WTO Honda F1 | |

|Prof Wesley Harris – Head of Department of Aerospace & | |

|Aeronautics MIT | |

|John Lorimer – Head of Capital Programmes Manchester City | |

|Council | |

| |Prof Peter Landshoff (CMI) |

| |John Patman (CMI) |

| | |

| |Facilitators |

| |Ian Cooper |

| |Fred Pink |

| |Alan White |

| | |

| |Academic Input |

| |Prof Peter Barrett (Salford) |

| |Prof James Powell (Salford) |

| |Prof Fred Moavenzadeh (MIT) |

| | |

2 Background

The workshop was the first Executive Group meeting devised in response to feedback from the two previous Group meetings.

3 Agenda

The agenda for the day was:

1) Introduction Peter Landshoff

2) Honda F1 Nick Fry and Graham Miller

3) World Class Processes Wesley Harris

4) Collaborative Working John Lorimer

5) Dialogue Groups

6) Plenary Session Peter Barrett

4 Introduction – Peter Landshoff

Peter Landshoff welcomed everybody to the Royal Society and expressed the hope that all would be convinced of the value of the meeting and would be willing to commit time to future meetings. The theme of the day was to be

Partnership for radical innovation

He said that

- As a result of today's meeting it was expected that the group would create a series of Action Clusters, focusing on particular issues, that will add value to participants' businesses.

- A planning group (including Ernst & Young, RBS, Siemens, Serco and Thales) has been set up to advise us on our future plans.

- CMI and Salford have committed money and time to the project, but the initial funds have been exhausted and to continue we will have to devise a funding model.

He extended a particularly warm welcome to the speakers, and to Fred Moavenzadeh (MIT) and Tony Purnell (formerly head of Jaguar Racing).

5

6 Creating the Winning Formula

7 (Nick Fry & Graham Miller, Honda F1)

Nick Fry began by saying that the presentation is a calibration of what we do and how we do it. How quick the business moves. We will try and show how we have applied F1 thinking to construction of large project, such as a large wind tunnel where we test a full-size car.

- Formula 1 is really the pinnacle of technology.

- Although we push things to the absolute limit the sport is still leading edge, not bleeding edge.

- From the outside it might seem like a bit of a circus, but while there is a certain amount of profligacy in marketing, the engineering is very tight indeed.

Honda Racing was founded in 1997 and is one of the younger teams in F1. We work with high technology and with a lot of highly skilled people. Key decisions are made on the basis of “will it make the car go faster?”.

To put the business into context Nick stated a few relevant facts:

• 80% of car designed and built in house

• 15,000 parts designed per year

• Rate of development is immense

• If you took the car you started the championship with and compared it with the one at the end, the one at the end is 1.3 seconds per lap faster

• 80 product changes per day.

To achieve this Honda have to

- work with tight process control and cost management

- spend a lot of money but it is tightly controlled.

The average mainstream car industry would take 5 years to design a new car, whereas at Honda F1 they have a one-year cycle.

At this point Nick Fry handed over to Graham Miller

The subject of Graham’s presentation was

‘How we have taken what we have learned from F1 and implemented it in the construction industry’.

The majority of Wind Tunnels built in the UK are late and over budget. Honda F1 are not experts in the construction industry, but managed things in a positive way. Honda F1 believe from their experience that the Construction industry is behind in terms of attitude.

The project had a central architect and a principal contractor, but within the building was the wind tunnel which was built by another contractor. This meant that a group of people were all fighting for the same space. Honda took a heavy role in managing this.

Our working with the main contractor was somewhat unusual. The way that we do things at Honda, and in the racing industry, is different. In the racing industry we require that all give 100%. Although this is a simple message, and Honda do not have any magic solutions: it comes down to attitude. Honda forced the construction guys to take one day out and took them to Dartmoor. Honda wanted every one to think that this project was special, so that they shared pride in it, and the end result was that they got that commitment. They created an environment that was competitive, educational and fun.

In the racing industry, recognition is important. Although there is only room on the winners' podium for three people, the Honda F1 car carries the name of every employee on the wing, which allows employees to be married to the product. In a similar vein Honda took time to recognise builders, brick layers, painters, by giving them tours and simple giveaways. They had never experienced that. A typical response was “we have never engaged with the client like we have with you, usually we never see the client , only when it's finished”.

The pursuit of perfection was felt to be important. Honda push people to fulfil their potential. In racing, if you are competing for the split second advantage, every bit counts. This means that Honda take a boundary and extend it, and believe in evolution – intelligent changes that make things better. The business can never stand still; that way every day moves closer to perfection. Honda wanted to instil this attitude in the construction industry. As a result the project was completed 3 months ahead of programme, an ambitious programme at that, because everyone had bought in.

In Honda’s business “that'll do” is not something that is accepted. The construction term “Practical Completion” was therefore an unacceptable expression. The main contractor knew that Honda would not accept second best. To ensure this was understood Honda embedded themselves within their business. Honda believe that in most projects, suppliers and sub-contractors are not managed well and that if we are going to get a world-class construction industry we need to address the attitude. This was exemplified by the notion of the OK Factory. The most commonly used word in the world is OK. But why innovate if OK is OK? Honda do not believe that OK is OK. What if the favourite word was “what if?”. What if the construction industry was on time, snag free?

That was Honda’s journey, one of Attitude. We completed early, within budget and believe we'll go faster on the track for that.

The Official Opening of the facility is tomorrow.

1 Honda Dialogue Group 1

Honda had a fixed budget of £50m for their wind tunnel and it was crucial to finish it faster than had been done before. They had a very small group to take decisions and steam-roller things through over the egos of the design team.

Honda wanted the building to be functional above all else, though also attractive, unlike McLaren's Norman Foster building which is perhaps beautiful but less functional. Every building has a function, so in-out design is the right approach.

Honda managed in house, because Nick had complete confidence in Graham as a project manager, even though he had no buildings experience. Nick involved himself only when necessary. They required each month a cost report, and formal reports from each contributor. The project was a success, unlike all previous wind tunnels.

Honda believe that good management information technology is lacking. Honda had to rely on everybody's determination not to fail. There must be 100% inspection, with no short cuts and no exceptions to a detailed sign-off process. One should set objectives and allow people autonomy on how to achieve them. Innovation comes out of cooperation and everybody contributing to the thinking.

Honda was ruthless about changing project managers when they failed to buy into their philosophy, even though this risked losing continuity. They involved the most senior people from each contractor, and made it clear that excuses would be unacceptable.

2 Honda Dialogue Group 2

There were only 3 ‘global’ choices to supply the wind tunnel, so timing was determinant. Experience also was critical; it is important to build on what you already know and do.

In terms of innovation Honda cannot take the risk involved with experimentation. In their opinion innovation is not the same as experimentation, they are more interested in evolutionary, quick and rapid change.

The F1 programme does have benefits for the ordinary motorist. Mainstream Honda engineers working in the F1 teams feed back into the standard programmes. It is also a recruitment tool for the best engineers, which ensures medium to long term benefit according to the Honda philosophy.

The reputation and cache of F1 was used to advantage in the project. Board level presentations were made to the contractor who also showed a level of detail. This was also applied down the supply chain to get commitment through factory tours and team buildin.

Honda are a repeat rather than rolling programme client and will require different facilities in future, though they might use the same team. It was an important aspect of the project to challenge norms and conventions, applying the same mindset as other product development. Attitude change was a key aspect of the project. Those who were not able to comply were removed from the project. In Honda's opinion much of the construction industry does not recognise what the client wants and is not sensitive to client needs.

Honda did interact with organizations down the supply chain. A key issue was stopping/starting the main contractor to make space on site for other suppliers. On the soft side issue the important aspect was relationships building.

Honda recognize that they have to be ‘fair and reasonable’ as client. Some did not make a profit on the project but learnt a lot on the project.

3 Honda Dialogue Group 3

Honda believe that recognition is important and that people at the lower end of their system are as important if not more than the guys at the top. Constant reinforcement of this message is important and there are many mechanisms in place to communicate thisI

The fact that Honda were unused to the construction business had plusses and minuses. Although they lacked experience their internal processes and substance of the organisation are top line. Within this, soft issues are just as important as hard issues. Honda employ passionate people with the right attitude; at the end of the day that is what makes the difference.

Although Honda have an aspirational product, they believe that in terms of engaging people, it would be the same if they built super stores. It is about getting people to buy into the same objectives.

In order to introduce change and flexibility the first thing Honda did was get people to understand their business. Board directors of their constructors were helped to understand what make Honda tick and why they are ruthless. Once they had ticked that box they could start relating it back to their business. The project had 3 project managers. The first one lasted a month. Number 2 lasted three months. It is necessary to change the people if you cannot change them.

In F1 Honda have put together a new, dynamic, excited team which has glamour. Although cost is important it is not the primary driver. NASA is the same and the aviation industry initially. Maybe this can be reproduced in construction by setting achievable goals. For example, athletes do not benchmark a ten-year old against a world champion, but you can still motivate with small incremental improvements. Give certain achievable goals and work with them to motivate them. Internally for Honda, the glamour only goes so far, in fact it is the same every fortnight. From outside it looks glamorous but the jet lag and tiredness is not. Glamour wears off quickly and Honda are in a competitive engineering business.

90% of improvement in Honda is a grind, not R&D. This is exactly the same problem as in construction. Working to fix the broken bit. One thing that does work for Honda is to cascade down your objectives to some kind of measurement. Go right back to guys on shop floor who feel signed up to that measurement, and suddenly you get a step change because they feel engaged. But it has to involve realistic goals. And if you can include an incentive that is great. It is important to bring people together and help people communicate to produce tight feedback groups. In construction you get silos where people don’t talk to each other.

Honda do adopt the newest technology but only when they are sure that it will work.

At the end of the day the car has to finish the race. It’s got to be safe and reliable. Get as close as we can to go as fast as possible. We are all playing that balance. There’s always more than one objective and you have to make that trade off. We don’t have any different processes than the mainstream auto industry. Sign off processes are shorter, but the same, and they are almost absolute.

Finally Honda do incentivise their workforce based on performance of the team.

8

9 Partnering for Radical Innovation: World Class Processes

10 (Wesley Harris, MIT)

Wesley Harris began by saying that today we are moving from racing cars to aircraft to the built industry. Depending on which dimensions you choose to examine, it is a continuum. In some aspects the racing car industry is in the lead, sometimes the built industry, and sometimes aviation.

Wesley posed a series of questions and then addressed each in turn:

‘What is aviation as we know it today?’

‘What are the processes that lead to these devices?’

‘What are the similarities between aviation and built industry and what are the differences?’

‘And what is transferable to the built industry – which we believe is more complex than an airplane?’

1 What is aviation?

First, from the perspective of the machines themselves, whether commercial or military. In aviation there are world-class processes in terms of manufacturing. In the old days, everything was done in house. Now major components are outsourced across the world and critical buying decisions need to be made. Major economic decisions have to be taken into account. Relationships are therefore important if we are to build a wing in Japan and be absolutely sure it will fit in a plane in America.

Without the end user, aviation does not work. No airplane is built without a customer base. What is transferable about the conversation between end user and manufacturer from aviation to the built industry? An example is sustainment and maintenance. For example, Pratt & Whitney do not make money on engines as such, the money is made in maintenance. Sustainment is based on the quality of data not losing parts.

Wesley asserted that the complexity of the built industry far exceeds that in aviation. As an example he cited the F15 fighter: it cannot be taken and turned it into an F22, because once you build the airframe you are locked. In aviation, adaptability is difficult. Against this the industry, which has now been around for a fairly long time, has the ability to eliminate waste and add value to the end user. There has been a transformation, from delivering performance to creating lifecycle value. These major considerations have led to new processes.

Wes likened the problem of a cab driver in Havana trying to fix a broken clutch on a 1949 Ford, to that of the aerospace industry trying to sustain and maintain their fleet. To make a repair both have to deal with the following elements:

• supplier

• DLA

• depot

• transportation

• base

• flightline

However, in order to create today’s sustainment environment which is made up of inconsistent metrics, at MIT they have tried to harmonise these metrics in such a way as to have a balanced, customer-focused relationship. It is this balance that provides the difference, linking the elements in a way that leads to clarity and performance.

• Enterprise Integration – System level.

• Business Processes – Business level

• Sustainment Operations – Shop Floor level

Connecting all of this is the information infrastructure. Clearly this is important and transferable. In aerospace, we can create lean value by doing the job right. Increase value in people and not just processes.

Wesley characterized the built environment industry as being both integrative and adaptive. Additionally it is sparsely populated by technical enterprise and knowledge workers, educational and scientific institutions, and supporting amenities and services. Similarities between aviation and the built environment industry are as follows:

• Both are highly integrated

• Both have enhancement of human capital

• Value of spatial relationships

• Collaborative dimensions

Differences between the two include:

Diversity, Type and Scale. Since 1945 and the invention of the jet engine planes have essentially resembled a cigar with wings on them. In contrast the built environment industry has much more diversity.

Value of information technology. The built environment industry needs to expand to enhance its human capital in this respect.

Sustainment processes No Boeing 747 will ever be in a hangar for more than 24 hours needing repairs. This is not the case with buildings and bridges.

Future Directions. Structure and dynamics will shape both the aviation and the built environment industry. Trust and respect are true constants here.

To move both industries from product to system design, we must think life-cycle sustainability. We need to shift from point design solutions to families of solution architectures and migrate from traditional processes of engineering for customers to users in the loop. In the built industry, suppliers are often customers too and we need to build collaborative network enterprisers.

To close Wesley once again stated that with respect to these challenges, compared with aerospace the 21st century built environment represents a greater order of magnitude of complexity..

2

3 MIT Dialogue Group 1

Even though a construction project is more complicated than an aviation project, it has greater tolerance. This allows greater scope for the enhancement of human capital over a longer lifetime, coping with changing user requirements. But there are obsolete buildings and a lot of energy is expended on structures that are not used for very long. However, there are opportunities for renovating and retrofitting old buildings, which is much cheaper than a new build.

Aerospace decides function and builds the form around it, with continual need for improvement. But buildings are much as they always were. Planes have to be built with the total enterprise in view including, for example, the capacity of roads to airports.

In many companies, staff spend a lot of time in the air, where their gadgets do not work at present. Rectifying this would be possible now, but at great cost.

Although people can nowadays avoid air travel, or indeed working in offices, they need face-to-face interaction. Maybe the younger generation will not agree. The building industry has to respond to changes in technology, so maybe building design life should be reduced.

4 MIT Dialogue Group 2

Wesley's only involvement with the built industry is as a user. He renovated the Guggenheim facility.

There are 3 reasons why he believes that the Built Industry is more complex than aerospace

• Human capital high requirement.

• Multi-functionality of buildings with half life of 1000 years. Suppliers cannot cope with or conceive of this level of complexity, even 20 years on. The reality is you can only go so far.

• Cannot change the turning circle on an F15 to match an F22. In contrast a 1920s building can be gutted and re-fitted, giving flexibility advantage.

Similarity between aircraft / buildings include:

• Over time, over budget.

• Reason for product has changed but locked into design.

Once built, the purpose of an aircraft is largely fixed. However, in buildings there are challenges and opportunities to make the design more flexible.

The aerospace industry has developed relationships with software suppliers – no longer fly by wire. In buildings, software not debugged. How can we learn to manage IT.?

90% of the cost of a plane is software (and risk) – 100ms of lines of code – but this is more complex in buildings, as aero has well-known, stated, tested functionalities for the software procured.

Parallels between aero and buildings include:

• Materials assembled in one place (in the past).

• Trying to deliver frame of building with adaptability.

• Offsite production – more to be learned from aerospace here.

• Automotive industry – deliver frame with very different, tailored versions on top. Can we provide the same frame for house and hospital? Missing trick here? Move towards common air / building frame?

Getting components to fit – lessons to learn on integration from aerospace.

CATIA – software with common database allows construction in 3D precisely.

Plane building is as much or more about economic issues than technology.

5 MIT Dialogue Group 3

Trust and Respect between client and supplier is important to build these systems within time and budget. At the highest level, you have to incentivise. To get elements to work together. This is even possible in a litigious country like the USA.

The relationships between big and small company can vary in aerospace. Whilst the big company may seem to call the shots, they can rely on small suppliers with specialist skills.

In aerospace 5 – 10 year contracts are typical. Boeing may need 2150 builds before it can make a profit, which engages suppliers. Is this a contrast with construction, where in the US, most of the contractors outsource and the supplier is very much constrained, rather than the contractor.

The real difference between old and new planes are the electronics. In contrast to something such as drag reduction, where a large investment will only make a small improvement, companies are much more likely to change the electronics whereby capability can be improved.

The issue of trust and respect is complex and the starting point of a relationship is important and prestige can be an issue. A dictator who can command respect may make more progress than the also ran. But incentives really help get the job done. You must start with the leadership.

Construction industry not traditionally trustworthy. Disconnect between guys that build and guys that run it. Blame culture kicks in. Consequential liability that no one has factored into the game plan.

11 Collaborative Working: Stifles or Encourages Innovation?

12 (John Lorimer, Manchester City Council)

John started his presentation by saying that the Council are at the early stages of collaboration even though they have been working through this for the last three years. The background to John’s first slide was a picture of a group of toddlers, which he said was one of the council's user groups, as the Council's capital programme is in the order of £280 million p/a, and a huge amount of it being spent on education. Under the Building Schools for the Future programme the Council have 30 secondary schools in Manchester. By the end of the programme (2011), 50% of these will be renewed and the rest will be refurbished. This is unprecedented for the council and in the country generally.

Many stakeholders are involved in the Council's consultations. Through that process of consultation and delivery, a lot of good practice and innovations can get stifled. We need to deliver buildings capable of delivering a transformational environment as good schools enable people to bring their kids into the city to live

This huge responsibility has taken them to the delivery model they now have. There is a certainty that good design impacts visually and ensures a facility is fit for its purpose. To support this the council has actively to harness innovation, not go out and just expect people to innovate. There are many ways in which this can happen. Quiet progression can be innovation. The council are not precious about using other people’s good ideas, likewise they are happy to share theirs. Within these objectives, the council try to ensure that everybody can play a part.

As an example, the delivery team (contractors, council, architects) explored what with the kids wanted from the building. An example is bullying in the toilets, which can be crucial to how you manage the building. Where do you put innovation there? In the end the solution of ‘see-through’ toilets that eliminate corners where children can get bullied was devised. It was liberating to be able to work collaboratively like that as in old world of procurement it was impossible

The BSF challenge is to: standardise, simplify, centralise and optimise. The key element for the Council is developing a kit of parts. They are working with developers and contractors and hope to roll it out across the Council. An example of a problem being tackled was that the Council lose 1,000s of escutcheons every year because kids pick them off. Through that discussion with constructors they realised that there are loads of things sat around in these companies that you could consider an innovation. What the Council also have to do is recognise how to facilitate the innovation. To this end they are focused on working in project teams.

One of the things the Council are doing, simple but innovative, is making their facilities available as a test bed. They are trying to control the level of CO2. High CO2 levels create tiredness. For a year, they have been monitoring physical conditions and are getting very positive results.

In order to harness innovation MCC are really keen to work with suppliers and designers. One of the most interesting projects is a recent primary school they have built where they have installed dynamic lighting, whereby three times a day the lighting changes. They are working with BRE who are measuring psychological aspects to verify if it does actually work. If it does work this presents a problem as these lights are twice as expensive as the standard. The budget is fixed, so the problem will be how can they accommodate this innovation? The answer being that they will have to trim elsewhere.

John closed by saying that what they are doing is running trials, which is what other industries have done for years. This benefits MCC generally as they are definitely saving money, and delivering faster what can be termed fit for purpose facilities. A final example was given of a recently delivered sports hall. On completion the project team received a letter back from the Deputy Head expressing gratitude for what they had got from being involved from the beginning.

1 MCC Dialogue Group 1

The end-user of a school building is the child. It is a real challenge to test success of a school building. The government has indicators, while building people have cost and defect criteria; how does one join them up? There is a need to devise benchmarks that include both educational and social considerations. One quick indicator is school attendance.

The money being offered towards achieving low carbon has little impact. There is a need to understand the built environment, bring in enthusiastic architects and combine with financial and other considerations, such as the number of trucks needed to transport biomass if that is to be used.

Building schools for the future requires social objectives to be combined with building challenges. Different adacemic disciplines are needed to make progress. Informed clients are important. One must study the integrated output of a building, which is not necessarily best done by bringing all the stakeholders together. Rather, one should build something that is flexible. The hardest thing to incorporate into a flexible design is the

M & E.

There is no proper way to measure plant obsolescence. Should one aim to try to increase its life? Good procurement through economies of scale is just beginning, but data are still lacking. Authorities share information reasonably openly, but not enough and there are dangers when CEOs learn that others do things more cheaply. It might be valuable to study IKEA's procurement procedures. Manchester would like to find a private-sector partner that is doing it well, but how do they find the best one?

One must be risk aware but not risk averse. One should try to get more advice from people who solve a given problem every day.

2 MCC Dialogue Group 2

MCC use ‘Transformation Teams’ as drivers for change. These can include clients, users, staff and children. This provides non-hierarchical access to end users and stakeholders and creates different thinking and access to people. This feeds into the design brief but ‘translators’ are needed into building terms within time constraints.

There is a need to drive process improvement over MCC’s current 5 year £450m programme. To this end the council have moved away from individual projects to working with stable delivery team. In doing so, they need to look at results, eg impact on educational attainment (outcome), but also social issues eg attendance. The issue of measurement is complex and MCC don’t yet know what they will be measuring but educational service metrics are well established but yet to be linked to buildings. For example, it is difficult to differentiate between the impact of physical assets teaching style or the role of leadership from the head. For this reason the PFI sector has rejected such measures because of the difficulty to differentiate.

To co-ordinate this centrally there needs to be reporting against ‘headlines’ rather than the imposition of prescriptive templates and procurement routes. MCC believe that they can ensure their new buildings are now‘fit for purpose’ because they can deliver to time and cost. Comparisons have been made with other LEAs, which requires data and benchmarking. But there is a question with regard to how to measure this and share it? Including the issue of added ‘added value’.

To guarantee delivery on budget and on time MCC work with 3 preferred contractors with own teams including designers. The projects follow a design, develop and construct route with targeted costs. Initially the reaction of architects and engineers was to challenge the sharing of information as they thought they might lose advantage as a result. The framework needs to build confidence over time to overcome this.

The minimum 25 year lifetime of new buildings requires long-term planning, particularly where pre-fabrication is used. This is the biggest single financial problem. However it does give the client the opportunity to engage and influence down through supply/value chain and the council are now moving to working with manufacturers.

3 MCC Dialogue Group 3

In order to control their very large programmes MCC have two constructor groups. They appointed two because they do not like exclusivity, although seemingly now under EU rules you can have 1 or 3 partners but not 2. The council act as a programme integrator and have just taken on an IT supplier. They manage it with an integrated project team. Originally the framework started with two pillars but is more integrated now. Overall responsibility sits with Chief Executive. Right decisions taken in planning group. No equity involved in joint projects.

The projects run with NEC target costs. The council take the development risks. Whatever form of contract is used, the council take the development risk anyway, so they are upfront about it. There have been a few instances where contractors have gone through the target cost, but it is going to be superfluous soon, as a better understanding of costs is developing..

MCC work closely with suppliers, eg their window suppliers. The client has the ability to influence things here. Once you become involved with the supply chain and feel confident it is possible to draw on expertise. Continuity is important for this.

Although MCC's contractors are working with others, they may not win work in a cost only environment. There’s always someone out there that will bid lower, thinking they will get it back over the course of the contract. Whereas MCC want the contract to be clear and on the table because they think it can helps. They looking at contractors books once a month as it about being fair not friendly and the right culture is vital. They started with quite heavy person-to-person marking but now people feel empowered. Staff have embraced that but it has taken 2½ years. They do not have exclusive arrangements; they share everything with all of the frameworkers. This change of mindset is important – especially of constructors. An example was given of a scheme that came in 36 weeks early and £1million under budget because of particular innovation. Both contractor and client share in the savings. In the old way they would have just carried on.

Examples were given of how cluster groups were used to tackle problems such as lifts and roller shutters. In the framework groups themselves, groups are starting to come together and share information. The big challenge is to get 12 contractors to buy into shared innovation.

Finally the issue of standardization was raised. At the moment MCC do not have the right level of access to providers to flush out opportunities, but do see this coming. They believe that the key is delivering better fitness for purpose by getting closer to manufacturers.

13 Plenary Session – Professor Peter Barrett

In the plenary session each of the three groups brought back their key insights from the dialogue groups to share with the whole group. The following are the key insights:

1 Group 1 Insights

1. Trust, transparency, leadership

collaboration with suppliers

2. Portfolio Management

3. Shared sense of purpose - momentum

4. Full systems view for example

o Where is the boundary?

o Who is the user

o What does the user need?

o Deal making is needed to achieve it

5. Clear outcomes, objectives, roles and

responsibilities ability to drive through

and- how do you measure success?

2 Group 2 Insights

1. Prefabrication

2. Culture of Tolerance

3. Portfolio Management

4. Developing Common Language

5. Versatile Frames

6. Risk Management

3 Group 3 Insights

Trust

- Between all parties

- In the supply chain, and how to influence

- At the top -> the bottom – develops relationships and fosters partnerships

- Length of contracts (opportunity to partner)

Team

- Shared responsibilities and incentives

- Work with the Do-ers not the Sales people

1 Build

- Recognition

- Communication

- Incentives and disincentives

Industry

- Developing leadership, motivation,“superstars ”

- Developing industry image / brand

- Reflects on recruitment

- Over arching image of the builder as “Hairy-arsed” or “Bob the…”

- Lack of R&D

1 Proposed Action Clusters

After sharing their key insights the plenary discussion moved onto which of these areas were worthy of taking further through action clusters. The following were the initial suggestions:

4 Group 1 Suggested Action Cluster

1 Portfolio Management monitoring and assessment tools and techniques

• Will produce benefits we would not otherwise see because building is so very focused

• All the team / chain will understand and be motivated by the common purpose and goal

• It will help with handling inevitable change of use

• It will facilitate long term planning

5 Group 2 Suggested Action Cluster

Portfolio Management Leadership

• Competency levels for

PROGRAMME management

• Professionalising the culture of procurement

• Breaking down the barriers between public & private sectors

6 Group 3 – Suggested Action Clusters

1 Improving the brand

- To attract the best

- To promote R&D

- Culture Change

Other suggestions:

- Case studies of best & leading edge pratice

- Rethinking the processes

Having shared the insights and potential Action Clusters there followed a straw poll to gauge interest in taking the Action Clusters forward. There were 12 volunteers to work in clusters on Portfolio management and six to work in a cluster on Brand Issues.

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