The Constructing Excellence Procurement Group have been looking at the key outcomes and lessons learnt from some of the trailblazing projects and programmes that have used collaborative procurement. Considering how the benefits have been realised across the project and its operational performance.
Each case study covers the reasons for the novel approach, the differences from traditional approaches and views from the client and supply chain. The case studies clearly describe the key benefits, the main challenges and the lessons learnt as well as exemplify how collaboration and effective use of technology can deliver better outcomes, faster delivery and lower environmental impacts.
A Thought Leadership piece by Martyn Jones
Did the authors of the Rethinking Construction report, published in 1998, take sufficient account of the specificities of construction when advocating a Lean form of Supply Chain Management (LSCM)? Were the recommendations of the Egan Task Force based too much on the success of SCM in a resurgent, process-based UK automotive industry?
The members of the Egan Task force were greatly influenced by the radical changes and improvements seen in other industries, particularly the success of Lean Supply Chain Management (LSCM) in the automotive industry. This meant that the Lean form of Supply Chain Management came to dominate thinking in the procurement and management of construction supply chains.
The Egan report was both forthright in its criticism of the industry and radical in its proposals for change. At that time, it was the most explicit presentation of the key features of the emerging techno-economic paradigm to construction. Many in construction found it excitingly seductive too as it seemed to address our longstanding weaknesses and open up opportunities to improve our performance in relation to a range of outcomes including quality, productivity, and health and safety.
The focus was on greater customer focus and more collaborative inter-organisational relationships across our supply chains to achieve more profitable outcomes and competitive advantage for all parties in the chain. It prescribed the building of highly transparent, trusting and long-term relationships between buyers and suppliers to create a physically and socially efficient value chain through the reduction of waste in processes and/or an increase in responsiveness and greater collaboration in product delivery.
But here’s the question? Given the dominance of LSCM thinking, its success in other industries such as the automotive industry, and given the opinion of many in construction that it was a way to tackle many of construction’s weaknesses, why has it proven – with a few notable exceptions such as the supermarket building programmes of the 1990s and 2000s – to be so troublesome to implement and sustain in much of construction?
One of the reasons is that Egan’s report (and indeed the whole approach) is not without criticisms. It was seen by some as being too dominated by big organisations – particularly regular and experienced clients with large and frequent pipelines of demand for construction products and services. It was based on a LSCM approach that was more suited to process-based industries and without any discussion of the alternative – the Agile approach to Supply Chain Management – which could be seen as more appropriate for project-based construction.
So back in 1998, did Egan invite us to back the wrong horse in the SCM Stakes? Was there another more appropriate runner and rider in the paddock: The Agile approach to SCM (ASCM)? The proponents of this approach argue that LSCM only makes sense under certain circumstances: where demand is predictable, the requirement for variety is low, and volume is high. They argue that an alternative is needed in unpredictable, volatile, highly customised and low market volumes – as in the case in most of the construction market
As professor Martin Christopher argued back in 2000, “There are certain conditions where a Lean approach makes sense … the problems arise when we attempt to implant the philosophy into situations where demand is less predictable [and] requirements for variety is high …[As a result many] firms have been misguided in their attempts to adopt a lean model in conditions where it is not suited”.
Where demand is volatile and variable, as in much of construction, the elimination of waste is a lower priority than responding to the needs of dynamic markets. Such markets require innovative and market-responsive (or Agile) Supply Chain Management (ASCM) approaches supported by higher margins as shown in the following table.
An examination of the table suggests that at best, it is only those parts of the construction market where the nature of construction spend is regular and ongoing and the relationships between buyers and suppliers are continuous and long-term that are able to fully adopt and sustain LSCM. Where irregular customers require high quality, complex and highly customised products with high-information and value-adding content that require the mobilisation of scarce competencies and the synthesis of diverse technologies then agility is more appropriate.
Agile is also now being seen as more responsive to social and environmental issues, more accommodating of change and uncertainty, and intra- and inter-enterprise integration. Given the necessary tools and support, agile teams, sustained through regular intervals or pauses for fine-tuning of behaviours, can be trusted and empowered to creatively accomplish project goals.
So, what’s best for your supply chains? Lean or Agile? Lean techniques are designed to improve predictable or repeatable actions while Agile works better for innovation projects and original creativity, which are not so easy to manage in a repeatable way. This means that the choice of approach very much depends on the nature of your supply chains and more specifically the volume and frequency of your workflow.
For example, if you are making greater use of the offsite manufacture of standardised components and processes then a Lean approach may suit you best. If you are seeking creativity to tackle say carbon reduction, then an Agile approach may be more appropriate.
And it might not be a case of either/or. You might think about mobilising both Lean and Agile approaches in different parts of your development process and supply chains, with say Agile being dominant upstream to customers and Lean being applied downstream with key and frequently used specialist suppliers. This synergistic blend of Leaness and Agility has given rise to a new form of Supply Chain Management – Leagility.
What can we draw from this? The form of SCM used is very much dependent on context and that collaboration based on trust is essential to the success of Lean, Agile and Leagility approaches. Construction’s customers often procure more on the basis of cost rather than the capability of resources, whilst expecting their suppliers to operate with agility but on lean margins.
So here we all are again in lockdown. Thankfully, the Prime Minister, Boris Johnson, recognised the importance of the UK construction industry in his speech when introducing the latest set of rules and regulations. For our sites it is ‘business as usual’ with the rest of us confined to our homes again. I feel very confident however that thanks to the sterling work of the Construction Leadership Council once again the sector will prove how adept we are with dealing with a crisis and assist the nation through this period of uncertainty.
For CE Midlands, our works seems to grow and grow as the need for collaborative working increases with clients looking for innovative solutions to maintain their building programmes. Our work with Nottingham Trent University continues at pace and we were able to provide an update on the Clients’ Commitments Best Practice Guide at the hugely successful Construction Summit on 5th November 2020. At the Summit we were delighted to welcome Andrew Stephenson MP, Minister of State for HS2, to deliver the keynote presentation and this may be viewed by visiting our brand new web site, along with all the other excellent speeches, on our brand new web site at www.cemidlands.org. Our grateful thanks go to Shakespeare Martineau for generously sponsoring the online summit and providing such a thought-provoking presentation that may also be viewed on our new web site.
In addition to Andrew’s keynote presentation and Richard Whittaker and Stuart Grabham updating the guide, excellent presentations followed from Simon Rawlinson of the Construction Leadership Council on the Roadmap to Recovery, Vince Kesterton of Interserve on the building of the Birmingham Nightingale Hospital with all the best practice examples that could and should find their way into everyday behaviour, and Simon Delahunty-Forrest in unveiling the Birmingham City Centre 2040 Future Plan. However I have to say I was most proud of the presentations given by Paul Chatwin, Amrit Sagoo and Noel Street as they unveiled our ‘How to Guide to Mental Health and Wellbeing’, ‘How to Guide to Best Practice Procurement’ and links with the Grid respectively. The hours and hours of effort provided by our members throughout our network of Theme Groups came to fruition and we owe them a huge debt of gratitude. Details of all these new documents again may be found on our new web site.
Our regular Friday webinars continue, although there has been a slight downturn in viewers which is disappointing. Please do support our November and December webinars as we have an interesting line-up of speakers and topics including this coming Friday 13th November 2020 when Steve Clarke covers the all-important issue of ‘getting more for less’ which never seems to go away and is particularly critical during these troubled times. Further topics include required skills for MMC, the Building Safety Bill and of course our eagerly awaited monthly ‘State of the Nation’ sessions.
We have added to our series of podcasts when I interviewed Suzannah Nicholl, Chief Executive of Build UK, so please do listen to that when you have a spare twenty minutes. It may be found by visiting: https://audioboom.com/posts/7719647-suzannah-nichol-mbe-chief-executive-of-build-uk
The big news since our last newsletter however is a complete turnaround in terms of how we intend to run our 2020 Built Environment Awards by taking them online. The ceremony will take place on Friday 4th December at 12.00pm East Midlands and 2.00pm West Midlands and we hope that all members and supporters will tune in to see who has been successful and help celebrate best practice across the region. As it’s taking place online and during the afternoon rather than make it a ‘black tie’ event we’ve decided to make it ‘loud & proud’ and would ask you to watch in your loudest shirts and ensure you use social media throughout the event to publicise both yourself and the event – let’s go viral! Details of how to book may be found elsewhere within this newsletter.
Finally, I would like to thank the increasing number of people actively involved in CE Midlands with the results previously outlined apparent across the region. We continue to be the ‘driving force’ for the improvement agenda across the Midlands construction sector and if you are not yet actively involved please do so now!
ANDREW CARPENTER, Chief Executive CE Midlands
We had an excellent Summit this year with some exemplary presentations
If you would like to watch or rewatch the recording of this online event or see the individual presentations as PDF please CLICK HERE
List of Speakers
Welcome & Introduction: Uma Shanker, Chair CE Midlands
Keynote Presentation: Andrew Stephenson MP, Minister of State for HS2
Andrew Stephenson was appointed Minister of State at the Department for Transport on 13 February 2020.
He was previously Minister of State at the Foreign and Commonwealth Office and the Department for International Development from 25 July 2019 to 13 February 2020. He was first elected as Conservative MP for Pendle in May 2010.
He was a Parliamentary Under Secretary of State at the Department for Business, Energy and Industrial Strategy from 4 April 2019 to 25 July 2019. He was also a Government Whip, Lord Commissioner of HM Treasury, from January 2018 to April 2019, and served as an Assistant Government Whip from June 2017 to January 2018.
As Minister of State Andrew Stephenson has responsibility for: HS2, Northern Powerhouse Rail, Transpennine route upgrade, Skills
The CLC’s Roadmap to Recovery: Simon Rawlinson, Arcadis
Back in June a task group led by the Construction Leadership Council (CLC) launched the construction sector’s recovery plan.
Simon Rawlinson, a member of the CLC Task Group, highlights how we can all get involved.
“The plan has three main aims. Firstly, it sets out to support the widest possible restart of work consistent with safety guidelines – maximising employment across the supply chain.
Secondly, it aims to reset the work pipeline – combining measures to increase demand for construction with steps to improve productivity, safety and the professionalism of the sector.
Finally, the plan must drive the reinvention of the way that we work – consistent with the priorities set out in the construction sector deal. This will involve wider adoption of the digital and manufacturing technologies, together with new practice in procurement and project management to deliver better value and whole life performance.
For businesses like Arcadis, that have been investing in a digital and product-based future, this is confirmation that our long-term planning will position us well for the other side of the pandemic.”
Nightingale Hospital, Birmingham Case Study: Vince Kesterton, Interserve
This was an emergency facility, designed to increase the capacity in the Midlands region and more specifically for the UHB Trust. The initial brief was to create a minimum of 4000 beds in 11 Halls at the NEC.
The initial Phase was to provide 500 beds in 9 days. This increased in number as the scope changed and there was a requirement for a 100 bed ICU in Hall 8. Phase 1 became 804 beds, together with X-ray rooms, ultrasound rooms, dirty utilities, staff and patient toilets, all fully pumped to the outside, fully piped medigas, back-up generators and UPS.
Phase 2a was an additional 484 beds creating a total of 1288 beds, and included similar additional facilities. This was delivered for two weeks after the delivery of phase 1 in 9 days.
In addition to the beds and all associated ancillary rooms, Interserve’s contract included an Ambulance drop off facility, a Mortuary, a drive through Covid testing centre and a Covid referral doctor’s surgery based of 36 consulting rooms and all the ancillary rooms.
Sponsors Address: Ian Griffiths, Partner at Shakespeare Martineau
Theme Group Presentations
The Clients’ Commitment Best Practice Guide: Richard Whittaker, Citizen Housing
The ‘How to Guide to Mental Health & Wellbeing’: Paul Chatwin, Cundall
The ‘How to guide to Best Practice Procurement’: Dr Amrit Sagoo
Innovation and Sustainabilty and an introduction to ‘The Grid’: Noel Street, 3D Reid
Our Future City Plan – Central Birmingham 2040: Simon Delahunty-Forrest, Birmingham City Council
The plan contains a set of principles that will guide investment in transport so that it is able to serve a future Birmingham that is home to more people and that is a better environment in which to live and work for everyone irrespective of age, disability or income.
These measures are designed to:
- Reduce transport’s damaging impact on the environment, supporting Birmingham’s commitment to becoming a carbon neutral city by 2030
- Eliminate road danger particularly in residential areas
- Connect people with new job and training opportunities
- Reconnect communities by prioritising people over cars
- Revitalise the city centre and local centres.
Closing remarks: Andrew Carpenter, Chief Executive CE Midlands
The UK Government has announced new English developments will be required to demonstrate a 10% increase in biodiversity on or near development sites from 2021.
Nottingham Trent University is working on an ERDF funded “BIM for Biodiversity Net Gains” project.
Based on the Biodiversity Metric 2.0 Beta, we are developing a Building Information Model (BIM) toolkit and case study measuring and visualising options for biodiversity losses and gains.
We would like businesses from across the construction sector to complete a short research survey – https://forms.gle/mEbquXf5STyUVu9T8.
Results of the survey will be discussed with an industry focus group.
There will be a MS TEAMS focus group meeting 10am-11am on the 26th November 2020 to discuss the survey results.
Dr Yangang Xing (Yan), BSc, MSc, PhD, MCIBSE, FHEA
Senior Lecturer (Construction Technology and Building Engineering Services)
School of Architecture, Design and the Built Environment
Suzannah Nichol MBE chats to Andrew Carpenter about the moment the idea of working in the construction came to her, setting up Build UK, her love for outdoor activities, achieving her MBE honours and how the industry has handled the Coronavirus pandemic.
CLICK HERE to listen now
In the past, KTPs have mostly been science and engineering orientated, however £25m (approx.~250 projects until 2023) has been made available nationally to support mKTPs and projects can range from: operations management, supply chain and business process improvements; organisational/behavioural psychology & cultural change; benchmarking, competitor analysis and best practice capture; alternative business models and associated profit margins; to post-COVID recovery and resilience, ‘new normal’ executive leadership skills, operations, decision making, strategy remote working, dispersed teams management, skills, innovation & wellbeing. To date, only about 40 projects have been taken up by business.
The mKTP is for businesses (up to 500 employees) who have an innovation or strategic management project that could benefit from some outside expertise (a university).
The aim of a KTP is to transfer knowledge and expertise to an organisation from experts in a University through a newly hired graduate Associate who works with the company for the period of the project.
The Associate has access to university academic expert knowledge, skills, and resources to help accelerate innovation to create strategic agility and impact. The expertise is embedded in the company, contributing to sustainable, positive change.
Questions a business needs to ask for a mKTP to be appropriate are:
- How does the project fit the strategic aims of the company?
- What is innovative about the project?
- What knowledge is to be transferred and why does the company need it?
- What is the academic challenge of the project?
Benefits to the company:
- What is the anticipated financial payback?
- What capability(ies) will be increased?
- Typically, £30k a year for an SME (@33% contribution) Companies with 250+ employees contribute 50% towards the project costs.
- Programme can be for between 1-3 years
Knowledge Transfer Partnership (KTPs), over the last 40 years, have helped around 12,000 companies innovate for growth and today around 800 organisations are involved with KTPs.
Strategic Partnership Manager (Construction & Sustainability)
Nottingham Trent University
Research and Strategic Partnership Development
Gain insights for your business with a free student consultancy project.
Challenge the Nottingham Business School (NBS) students with a research-based business question and get a free report and recommendations for your organisation.
A piece of thought leadership from Martyn Jones
At the risk of overusing the phrase, construction is facing unprecedented change. As we know Change requires Innovation and innovation requires Learning. These forces are driving us to rethink the way in which we design and deliver our projects, the tools and technologies we use, and the roles we need to play in a greener, more seamless, value-driven, customer-focused, development process.
But how do we go about nurturing more innovative organisations, project teams and value chains? Slipping into the language of football punditry, the words that keep cropping up time and time again in the meetings I attend are “we need to change our culture”.
But changing an organization’s culture is one of the most difficult leadership challenges, never mind changing the culture of a value chain or a whole industry. That’s because organisational cultures are complex, comprising an interlocking and embedded set of goals, roles, processes, values, communication practices, behaviours, beliefs, attitudes and assumptions.
That’s why single-fix changes, such as the introduction of Partnering, or Lean, or Agile, or Scrum, or Knowledge Management, or some other new approach, may appear to make progress for a while, but over time the deeply embedded and interlocking elements of the organizational and inter-organisational culture can take over and then the change is inexorably drawn back into the existing way of doing things.
Bringing about radical change in a whole industry is very challenging but back in 1998 that’s what Sir John Egan and his Task Force called for construction to do. That was the same year Google was launched. So where better to look for insights into nurturing an innovative culture during the last couple of decades than Google?
They have spent the last couple of decades or so thinking about how to maintain and improve a culture that fosters transformation and innovation, and with remarkable outcomes. Vinton G. Cerf, Vice President and Chief Internet Evangelist at Google, has shared the five lessons they have learnt in growing and sustaining their clearly successful culture of innovation.
1 Sustaining competitive advantage cannot be achieved with technology alone
Cerf argues, surprisingly perhaps, that in their experience technology on its own is not offer the complete answer. He says that every day Google needs to rethink how their people, structures, and processes interact. He says, “Our teams must have systems and processes that keep then engaged, amplify their ability to innovate and keep then consistently looking to the future”.
2. Measure, make decisions, and be transparent in that process
Measurement is at the heart of everything they do at Google. They measure everything – from how their systems are running, to how productive they are, to how people are feeling. And they collect anecdotal information as well as quantitative data as they see both as being necessary to inform change.
Once they have gathered and interpreted the data and made a decision, it’s time to actually put those changes into motion. They argue feedback systems only work when people believe changes will be made as a result of their feedback. The trick is to ask the questions and then actually do something with the result and use it to judge how well their organizational structure and processes are working.
Transparency is another important part of the Google way. Cerf says, “It’s important that we are transparent about the feedback we heard, and how we went about addressing it. Being transparent as a company increases customer trust on one hand, and employee trust on the other. It’s important that people understand why we prioritized the changes we made. That’s core to Google’s DNA.”
3. Don’t be afraid of failure
This is a difficult one for construction given the risks involved and our embedded blame culture but we need to recognise that – as in the field of science for example – more is learnt from failure than from success. If you ask why something didn’t work, you often learn more than you would have if it actually did work. Cerf again: “At Google, we try a lot of things out that don’t work – and then learn from them and refine our practices. And eventually, we hope, they get to the point where the things that we want to work actually do work.”
4. Don’t forget that culture is always a work in progress
Over time, as the scale of Google grows and the mix of people joining changes, they have to remind people about the cultural norms that they would like to maintain. As Cerf says, “You have to periodically refresh the cultural elements that matter.
For example, one of the things that Google tries to accomplish is to give people the freedom to try things out, which resulted in a policy of allowing engineers to spend 20% of their time doing things that they weren’t originally assigned to do. People use [their] 20% of time to learn outside of their assigned duties and it actually acts as a stabilizing component of employee satisfaction.”
5. Stay open
Don’t think that you have all the answers. In fact, the probability is very high that you don’t have very many of them at all. Take advantage of opportunities to share knowledge with your colleagues, your friends, even your competitors to better understand what others have learned in order to solve the same problems you have. Google “see openness as a friend”.
The same thing is true when it comes to not taking all the credit. It’s important to acknowledge other people’s contributions because it gives them the incentive to continue contributing. And so, this kind of openness of spirit is just as important as openness of ideas.
What can construction learn from Google?
Taking ideas from other sectors of the economy is problematic but there some takeaways from the Google experience that can be applied to changing construction’s culture. Technology alone does not guarantee success. We need a culture that supports and accelerates change and which nurtures innovation and learning.
People have always powered technology, and today that’s especially true as teams must harness new technologies and collaborate to solve the big problems we face and make the most of the opportunities too. Openness of spirit is just as important as openness of ideas.
The cultural elements that matter have to be periodically refreshed. Transparency increases trust, within the organisation but also upstream to clients and downstream to suppliers. Nurturing a culture of innovation helps lead to the identification of new opportunities and actions to create new ideas to tackle the unprecedented challenges we face and exploit the emerging opportunities.
Listen Now https://spoti.fi/30fjJls
Graham Watts, chief executive of the Construction Industry Council joins Andrew Carpenter as he deconstructs the construction industry. Graham was manager of Great Britain’s fencing team at the 2008 Summer Olympics and Chairman of the National Dance Awards.