Bccec Cwc Slides July 2010

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Reducing Costs and Improving

Results for Refurbishments

Shaun Aldis Director of Property Services



Context 3 Partners

£410m over 5 Year¶s (currently in year 3)

Circa 24,000 occupied properties

Scope of works: Kitchens, bathrooms,

central heating, electrical rewires, external

improvements including insulation andcombination of the above to high rise



Challenge Shortfall in delivery £47m*

Local employment (highest in West Midlands)

High expectations: promises made

Huge mobilisation 750 employed on contractexcluding supply chain

Is there comparity between the three partners onthe triple bottom line?

What is the true cost of delivery?

Management of the day to day cost activity?

Would you spend your money this way?



KEY PHASES OF PARTNERSHIP

PHASE 3

HIGH STRATEGIC

VALUE

PHASE 1

DELIVERY

PHASE 2

ADDED VALUE

TRUST

TIME



What did we do?Efficiency Programme

Strategic Overview Bottom up: Think - Plan - Do

Vision for the future ~let your imagination run away

Don¶t focus too hard and predict the outcomeChristopher Chabris and Daniel Simons (1999) perception test

Avoid dramatic change

Health CheckUnderstand your base line

Sweat the details ~succession/scenario planning

Keep it real ~ challenge

Where do you need to be?



Efficiency programme

Health Check Findings

Reasonable cost comparators

Varying costs between each partner

Varying costs from supply chain for thesame product

Component frequency replacement

Inward investment Refusal rate

Delivery model to accommodate PRADA



Courtesy of Chartered Management Institute



Lead from the top

Developed cash flow forecasting model

Shared outcome and cashable efficiencies

Cost/value reconciliation for each partner: OBCM, Fullsupply chain integration, KPI incentivisation

Review material specifications and guarantees

Consistency review, frequency replacement and quality

Introduced µlean¶ Improve customer satisfaction

Incentivised what matters

Efficiency programme Action



Efficiency programmeOutcomes 20% overall savings by each CP through lessons learned

and best practice sharing across the partnership

Adoption of target cost mechanism and KPI incentivisation

on gain share, led to improvements Total TSQ¶s rose from 94% to 98%

Incentivised local employment (increase from 22% to 32%)

Rigorous application of lean techniques to reduce time inproperty (properties completed in less than 25 days moving

from 88% to 97% across partnership) Reduced number of days in property from 25 to 15



Efficiency programmeOutcomes

Equal vigilance in reviewing the in-house structure for managing the DH programme has resulted in WHcommissioning costs running at 2.7% of total costs

within top quartile performance of 3% Partnership is applying the WH µRefusal Protocol¶

robustly and refusals are currently running at 6%

Continued Director level involvement in integratingsupply chain ³CWC UK ± keenest prices seen

nationally´ Some of efficiency savings have been absorbed by

introduction of enhanced improvement justified onbasis of reduced whole life costings e.g. rewire versuspartial rewire



Efficiency programmeOutcomes

Following consistency review: improved scope of

survey reliability has seen more efficient delivery

being achieved with preliminaries as low as 8.8%

Materials management reviews have led to cost

reductions between 20% and 35%

Reduced snagging Improved information to tenants

Improved knowledge on stock ~no surprises



What next?

Ice Berg Effect



Questions

Shaun Aldis

Director of Property Services

Wolverhampton Homes

[email protected]

Documents

Bccec Cwc Slides July 2010