Michael ThompsonMichael ThompsonMichael ThompsonMichael Thompson

PUTTING PUTTING PARTNERING PARTNERING

INTO PRACTICEINTO PRACTICE

PUTTING PUTTING PARTNERING PARTNERING

INTO PRACTICEINTO PRACTICE

T E A M F O C U ST E A M F O C U ST E A M F O C U ST E A M F O C U S Establishing Establishing the Team. - Is the Team. - Is

It Ever Too Early or It Ever Too Early or Ever Too Late?Ever Too Late?

Establishing Establishing the Team. - Is the Team. - Is

It Ever Too Early or It Ever Too Early or Ever Too Late?Ever Too Late?

Construction Construction Productivity NetworkProductivity NetworkGranada StudiosGranada StudiosManchesterManchester16 September 199916 September 1999

Construction Construction Productivity NetworkProductivity NetworkGranada StudiosGranada StudiosManchesterManchester16 September 199916 September 1999

www.teamfocus.org

www.teamfocus.org

CONTENTSCONTENTS

• Value Management• Setting up for Disaster!• “Constructing the Team” and “Rethinking

Construction”• Best Practice• Partnering Culture• Case Histories• Lessons Learned• The Future?

Establishing the Team - Is it Ever Too Early or Ever Too Late?

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DESIGNDESIGNMANAGEMENTMANAGEMENT

CONCEPT CONCEPT MANAGEMENTMANAGEMENT

CONSTRUCTIONCONSTRUCTIONMANAGEMENTMANAGEMENT

OPERATIONOPERATIONMANAGEMENTMANAGEMENT

QualityQualityManagementManagement

ValueValueEngineeringEngineering

RiskRiskManagementManagement

MoneyMoneyManagementManagement

TimeTimeManagementManagement

EnvironmentEnvironmentManagementManagement

SafetySafetyManagementManagement

Team CultureTeam Culture

VALUE MANAGEMENTVALUE MANAGEMENTProject Project ManagementManagement

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2 + 2 = 3!

SETTING UP FOR DISASTER!SETTING UP FOR DISASTER!

• The Client sets the bidding rules• He may be bound to use competitive bidding

processes (public sector)• Invariably he chooses the lowest bid when he

should try to determine the likely lowest out-turn cost

• With intense competition, the lowest bid is probably under-priced

• DISASTER!

2 + 2 = 3!

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“CONSTRUCTING THE TEAM”“CONSTRUCTING THE TEAM”

• Sir Michael Latham, at the request of the Government, reviewed the UK Construction Industry in 1994

• Amongst other things, he recommended a different way of working which would be less confrontational - such as Partnering

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“RETHINKING CONSTRUCTION”

“RETHINKING CONSTRUCTION”

• Sir John Egan published his report in July 1998 as a sequel to Sir Michael Latham’s report

• Most significant to Partnering were the annual performance targets he suggested………

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“RETHINKING CONSTRUCTION”

“RETHINKING CONSTRUCTION”

Indicator Improvement / year

Capital cost All costs excluding land and finance.

Reduce by 10%

Construction time Time from client approval to practical completion.

Reduce by 10%

Predictability Number of projects completed on time and within budget.

Increase by 20%

Defects Reduction in number of defects on handover.

Reduce by 20%

Accidents Reduction in the number of reportable accidents.

Reduce by 20%

Productivity Increase in value added per head.

Increase by 10%

Turnover and profits Turnover and profits of construction firms.

Increase by10%

ANNUAL PERFORMANCE TARGETSANNUAL PERFORMANCE TARGETS

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EFFECTIVE PARTNERSHIPSEFFECTIVE PARTNERSHIPS

• Set up multi-organisational project teams as a “single organisation”

• Make them lean and efficient!• Avoid duplication of roles, and gaps

between roles• Introduce the Partnering culture, including

effective communication, trust and common objectives

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BEST PRACTICEBEST PRACTICE

• There is no single definition for Best Practice.

• One definition:– It is the achievement of all the goals laid down

by a Project Team (including the Client) for the final product, by consideration of the best techniques of procurement, contract strategy, quality assurance and good supply management

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BEST PRACTICEBEST PRACTICE

• Pre-partnering, could we have done better?

• Even with the Partnering culture can we do better?

• Should we not strive for 100% in “Excellent”?

• Would not then Best Practice be achieved?

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PARTNERING CULTUREPARTNERING CULTURE

• Probably less than 10% of all projects in the UK adopting the Partnering culture in the last two or three years have had true Partnering contracts in place

• For many, the culture has been adopted after contract award

• However, to obtain maximum benefit, a Partnering “cost plus” contract is preferable.

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PARTNERING CULTUREPARTNERING CULTURE

• Of over 120 projects that the Presenter has been involved in, all had clear objectives and the majority were successful to a degree in achieving them

• Less than 5% did not succeed

• One that did not succeed required a court judgement.

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PARTNERING CULTUREPARTNERING CULTURE

• But when should the culture be introduced

?

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CASE HISTORIESCASE HISTORIES

• Three case histories:– Sewage Treatment Works in Southern England

• Project Partnering from Outline Design Stage

– Motorway Bridges Refurbishment• Partnering culture from Bidding Stage

– High School in Southern Scotland• Partnering culture for last 20% of Construction Stage

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SEWAGE TREATMENT WORKS

SEWAGE TREATMENT WORKS

• Four organisations, Four organisations, working together working together without walls without walls between thembetween them

• Partnering Partnering compatible contract compatible contract in placein place

• £12 million contract£12 million contract

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THE CHALLENGETHE CHALLENGE

• Build a brand new Build a brand new sewage treatment sewage treatment works from outline works from outline design on a “green design on a “green field” site within 21 field” site within 21 months and within months and within budgetbudget

• Undertake the Undertake the earthworks during the earthworks during the worst period of the year!worst period of the year!

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A QUICK STARTA QUICK START

• The Project Team started work on 24 July The Project Team started work on 24 July 19951995

• The Team Building Workshop took place on The Team Building Workshop took place on 31 July 1995 and a Charter agreed and 31 July 1995 and a Charter agreed and signedsigned

• The Value Management Workshop The Value Management Workshop commenced on 2 August 1995commenced on 2 August 1995

• A firm, agreed, outline design was in place A firm, agreed, outline design was in place within 10 - 14 days.within 10 - 14 days.

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SOME SUCCESSESSOME SUCCESSES

• Rapid establishment of Rapid establishment of the design with confidence the design with confidence through Value through Value Management processesManagement processes

• Effective Risk Effective Risk Management relating to Management relating to Planning Permission and Planning Permission and Discharge ConsentDischarge Consent

• Design and construction Design and construction taking place concurrentlytaking place concurrently

• Rapid appointment of sub-Rapid appointment of sub-contractorscontractors

• Self supervision of Self supervision of construction works (TQM construction works (TQM approach)approach)

• Joint planning with Joint planning with Operations the testing and Operations the testing and commissioning of the commissioning of the PlantPlant

• Fast resolution of Fast resolution of earthworks problemsearthworks problems

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CONCLUSIONCONCLUSION

• Completed and commissioned 2 Completed and commissioned 2 weeks earlyweeks early

• Handed over the plant £700,000 Handed over the plant £700,000 within budgetwithin budget

• Self-supervised - quality excellent!Self-supervised - quality excellent!• Good Health & Safety recordGood Health & Safety record• Environmental constraints observedEnvironmental constraints observed

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MOTORWAY BRIDGES REFURBISHMENT

MOTORWAY BRIDGES REFURBISHMENT

• Team approach introduced after Team approach introduced after contractor appointedcontractor appointed

• In their Charter, the Team undertook In their Charter, the Team undertook to promote excellent working to promote excellent working relationship in an environment of total relationship in an environment of total trust, openness, honesty and good trust, openness, honesty and good humour.humour.

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THE PROBLEMTHE PROBLEM

• Relationships deteriorated on site Relationships deteriorated on site between the Contractor and Resident between the Contractor and Resident Engineer staffEngineer staff

• They were working in separate They were working in separate buildings on the same site and had set buildings on the same site and had set up “opposing camps”up “opposing camps”

• Team performance was declining Team performance was declining rapidlyrapidly

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ACTION TAKENACTION TAKEN

• Senior Management decided the Senior Management decided the team would not failteam would not fail

• They insisted on a single office on They insisted on a single office on site, and changed some staffsite, and changed some staff

• There were significant There were significant improvements in relationships and improvements in relationships and the Project was a success!the Project was a success!

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HIGH SCHOOL, SCOTLANDHIGH SCHOOL, SCOTLAND

• £4 million contract£4 million contract• 30 month construction schedule30 month construction schedule• Due to finish August 1998Due to finish August 1998• Only 50% spent by month 24 (80% Only 50% spent by month 24 (80%

through schedule)through schedule)• Main problems Main problems

– inadequate information flowinadequate information flow–quality problemsquality problems

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ACTION TAKENACTION TAKEN

• Partnering culture introduced during a Partnering culture introduced during a Team and Management Workshop Team and Management Workshop with only 5 months to gowith only 5 months to go

• Major issues identified and actions Major issues identified and actions agreedagreed

• Contractor provided the Client with Contractor provided the Client with assistance to progressassistance to progress

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OUTCOMEOUTCOME

• The School was completed on time, The School was completed on time, but with some additional costbut with some additional cost

• Additional cost more than Additional cost more than compensated for cost of housing compensated for cost of housing children temporarilychildren temporarily

• Satisfied ClientSatisfied Client• Reasonable return for ContractorReasonable return for Contractor

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LESSONS LEARNEDLESSONS LEARNED

• It is never too late…...

• But introduce the Partnering culture as early as possible, ideally as early as Outline Design Stage

• And introduce an appropriate form of contract if you can for maximum benefit, including the sharing of gain

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THE FUTURE?THE FUTURE?

• Continue the Partnering culture• Apply more formal performance monitoring

and measurement procedures, such as Key Performance Indicators through such processes as Project Alignment

• Continue to strive towards Best Practice by aiming for the best finished product every time.