Meeting the productivity challenge through the Productivity Partnership BETA Skills Forum, 9 March 2011

Meeting the productivity challenge through the

Productivity Partnership

BETA Skills Forum, 9 March 2011

• Partnership of industry and government (multi-party team approach)

• Raise productivity in the build sector• Contribute to increased economic

development• Goal: 20% increase in productivity by 2020• 20%/2020 ≈ 2% GDP ≈ $2.6 billion p.a.

Purpose of the Productivity Partnership

Status as at 9 March 2011

Aims of the Productivity Partnership

• Identify and address barriers to improved productivity (through team work)

• Promote client confidence

• Promote co-operation and collaboration (shift from silo approach)

• Energise industry leadership and support

• Support DBH and other government agencies


The productivity challenge

Source: Statistics NZ


Source: Productivity Taskforce






Source: OECD

Importance to NZ Inc

• 90% of NZ household wealth is held in housing• 31% of building work ($50k+) results in

disagreements or disputes (DBH Research, 2010)

• Leaky building syndrome has damaged the reputation of the sector– PwC estimate ≈ $11.3 billion cost to repair

• The collapse of 50 finance companies since 2006 ≈ $6 billion


Importance of culture• Sector leaders seen as taking ownership of the

productivity challenge• Employees empowered and enabled to challenge the

status quo• Training for a changing culture• Openness with the value v cost dichotomy (lowest cost

should not be the sole driver)• Outcomes are clear, well defined and understood• Across the board acceptance that industry culture must

change for real progress• “Coopertition” v silo’d competition • Sharing performance information and being open to

sharing innovation and learning from others


What can be achieved?

• Greater client confidence and satisfaction• Lower cost of service• Less waste and less downtime• Less need for rework• Higher quality buildings and houses (that meet

client needs)• Higher productivity and profitability• Improved comparability with trading partners• Reduced work-related fatalities and injuries• Less need for regulatory oversight


Creation of the Productivity Partnership

• The Building and Construction Sector Productivity Taskforce 2009 [http://www.dbh.govt.nz/sector-productivity-taskforce]

• Sector meetings in May and June 2010

• The initial sponsors – DBH, BRANZ and BCITO/BETA


http://www.dbh.govt.nz/sector-productivity-taskforce

http://www.dbh.govt.nz/sector-productivity-taskforce

Productivity Partnership Establishment Board

• Bill Smith (Chair)• Peter Gomm (Mainzeal)• Brent Mettrick (Stonewood Homes)• Gordon Moller (Moller Architects)• Ian Elliot (BETA and Plumbing etc ITO)• Pieter Burghout (BRANZ)• Katrina Bach (DBH)


Structure of the Productivity Partnership


Skills Working Group

• Chair: Ruma Karaitiana

• Purpose: Look at how to improve labour productivity and skills in the sector

• Progress: BETA has been taking the lead on skills which precedes the establishment of the Productivity Partnership

• Funding: BETA (supported by the Tertiary Education Commission)



• Ruma Karaitiana (chair) – BCITO

• Victoria Troake – Troake Wall & Ceiling Services

• David Nummy – UNITEC

• Derek Baxter – Certified Builders Association of NZ

• Doug Gorman – Department of Labour

• Jeremy Baker – ITF

• David Fabish – David Fabish Ltd

• Tom Ellis – Fletcher Construction Ltd




Research Working Group

• Chair: Helen Anderson

• Purpose: Determine how research can be used to improve productivity

• Progress: Two projects underway– measurement of KPIs – research action plan

• Funding: BRANZ


Research Working Group

• Tony Lanigan – AUT

• Anthony Leighs – Leighs Construction

• Derek (Bax) Baxter – Certified builders

• Kevin Golding – Winstone Wallboards

• Pam Bell – Prefab Consortium

• Ruth Berry – Research Consultant

• Wayne Sharman – BRANZ

• Adrian Bennett – DBH

• Jeff Seadon – Scion


Indicators – Progress so far

Draft only

Meeting the 20% by 2020 will need some inspirational targets that make sense for firms and for projects


Research action plan

• Stocktake of research has shown

• Existing research is mostly about national (economic) measures of productivity

• There’s quite a lot of knowledge about the makeup and skills of the sector

• There are gaps in our knowledge of what makes the biggest difference at a firm and project level

• We now need to identify gaps and priorities for future research


Research workstream – likely outcomes

• A set of KPIs most likely to improve performance of firms and the construction sector

• Possible proposal for on-line tools to help firms collect and use the data

• A research action plan with projects and likely funding needed. Govt and industry co-funding of projects likely.


Procurement Working Group

• Chair: To be determined because of withdrawal• Purpose: Look into how the approach to

procurement can improve productivity• Progress: Working Group has considered

– the Taskforce recommendations; and – what determines good procurement practice

• Development of a project plan and work programme to deliver on change – establishment of clients/constructors forum one likely step


Procurement Working Group

• Chair (had been MED Procurement – will keep rep. on WG)

• Don Stock – Naylor Love

• Amanda Warren – Constructing Excellence NZ

• Warren Warfield – RPC Ltd

• Jerome Sheppard – Ministry of Education

• Richard Quinn – NZTA

• Kerry Hollingsworth – National Infrastructure Unit (Treasury)

• Ian Wheeler/Kevin Doherty – Auckland CCOs

• Mike Blanchard – Transpower

• Richard May – PMMS Consulting


Design and Production Working Group

• Chair: To be determined• Purpose: Determine how design and production systems

can operate more productively• Progress: Working through the terms of reference for the

project, including Chair and membership of workstream• Key issues

– Supply chains are long and complex– Techniques and technologies that make processes transparent

and integrated are available but not widely used– Lean production, prefabrication and modularisation, BIM/IPD

and GIS– SMEs - diffusion of techniques/technologies


How it all comes together – Wellington Indoor Community Sports Centre

• Great – Procurement, Practice, People (client and providers)• Objectives included sustainability and whole-of-life performance• Clients and providers worked as a team, and with the community• “Value Management and Engineering” approach led to innovations

to stay in budget but deliver objectives• Design and build will save $200K a year in operating costs• Use of Building Information Model (BIM) allowed for better team

work and client relations, and real time project management


Questions to consider today

• What skills mix might be needed in 2020? • What are the implications of technological and

other change?• To what extent is there a skill shortage/skill

utilisation problem? • What are the causes of these skill problems and

how can they be addressed?• What are the most important areas to address?


More questions

• How can the industry address skill issues that are also symptomatic of problems in the wider economy/education system?

• What would reduce health and safety problems?• Does the labour only contracting arrangement

undermine quality? • Is the industry becoming more specialised? if so

what is the role of the generalist? • Effect of boom-bust?• Does the industry value chain impede

productivity?Status as at 9 March 2011

Final Comments

• Plenty of scope for the sector to lift its game• Skills is a vitally important area• The Productivity Partnership offers a chance to

achieve public/private ‘win-wins’• The Productivity Partnership won’t have all the

answers• We need the involvement and contribution of all parts

of the sector• What can you do to help?• Any Questions?


Documents

Meeting the productivity challenge through the Productivity Partnership BETA Skills Forum, 9 March 2011