Constructing Excellence in the UK – latest experiences and trends

Don Ward Chief Executive www.constructingexcellence.org.uk

@constructingexc @UK_CCG Constructing Excellence

The single organisation driving change in construction

The platform for industry improvement to deliver better value for clients, industry and users through collaborative working

“Better Together”

@constructingexc @UK_CCG The CE movement 80 national members, 9 regional Centres 35 local best practice Clubs, 670 G4C members, 8 partners in the CE International Alliance

@constructingexc @UK_CCG National corporate membership The home for intelligent informed clients who are at the heart of CE

@constructingexc @UK_CCG National members Clients Royal Mail Group Consultants BAE Systems Sandwell MBC Advance BBC SCAPE Aecom/Davis Langdon Manufacturers & Suppliers Birmingham City Council Scottish Water Capita Symonds 4Projects Crossrail Westfield Group CH2M Hill Astins East Riding of Yorks Council Worthing Homes Coaction Management Coubari EDF Energy (NNB) Yorkshire Water CWC Graphisoft Environment Agency DBD Knauf Drywall Heathrow Airport Contractors FaulknerBrowns Management Process Systems Highways Agency Balfour Beatty Invennt Polypipe Terrain Igloo Regeneration Bowmer & Kirkland LCMB Structural Timber Association Imperial College Cara Room4 Consulting Tekla Lambeth Living Dawnus Synaps Waterloo Air Products London Underground Higgins Thurlow Associates Magnox Interserve Trowers & Hamlin Associates Nationwide Building Society ITC Concepts Turner & Townsend BRE Northumbrian Water Keltbray Waterman British Property Federation NuGen Kier Wragge Chartered Institute of Building ProCure 21 Mace Glenigan Quintain McGee Institute of Collaborative Working Rochdale Boroughwide Morrison Galliford Try UK Green Building Council Skanska University of Reading Willmott Dixon

@constructingexc @UK_CCG 9 members of the CE International Alliance

Other Alliance members

Australia Denmark Hong Kong Netherlands Norway New Zealand Qatar Singapore UK CE International Alliance Project partners Other links

@constructingexc @UK_CCG UK construction improvement can be charted by a number of key reports

Latham…….Egan………………Olympics….’Crisis’…..…’2025’…

1994...... 1998...... 2006…....2010…..2013…

@constructingexc @UK_CCG London 2012 was a great showcase for us http://learninglegacy.independent.gov.uk/

@constructingexc @UK_CCG The Client Commitments

Client leadership Procurement & integration Commitment to people Sustainability Design quality Health and safety

@constructingexc @UK_CCG ‘Mix-and-match’ modular qualifications eg “Level 5 Diploma in Client Leadership”

Courses and modules from CELL- Examples of courses and accredited (UK) Centres modules from other deliverers Sus GA; Success CE NZ CWA BRE CIOB MBS Con Train; SiD (ACE)

New Final dissertation + content? best practice ‘logbook’

@constructingexc @UK_CCG Influencing the mega projects of today to improve the industry of tomorrow - and setting the bar ever higher for the next one

HS2 Nuclear Crossrail power London T5 2012 Heathrow

@constructingexc @UK_CCG Over 500 Demonstrations Projects covering all sectors, regions and sizes

@constructingexc @UK_CCG “Completed 61 weeks ahead of schedule”

“Saved over £1.4 million on whole life cost forecast “

“Vehicle movements cut dramatically - reducing carbon emissions by 85%”

“Level of recycled elements within the finished product, measured at 89%”

“Project completed £112k under budget”

“No reportable accidents”

“Reduced traffic management by around 6 months leading to huge cost/time savings”

“The project has saved 44% on actual costs compared to the target budget which equates to £500,000”

“The Bypass opened 16 weeks ahead of schedule and within budget”

“50k tonnes of waste diverted from landfill” @constructingexc @UK_CCG “99.6% of demolition waste recycled” Safety has improved significantly

69% improvement, c.5% year on year

Although only 48% of employee reportables are reported (HSE)

@constructingexc @UK_CCG Construction output in Great Britain Value of construction output in Great Britain (£M) Current prices, non seasonally adjusted - by sector BIS May 2014 £35,000

£30,000

£25,000

£20,000

£15,000

£10,000

£5,000

£0 1980 1985 1990 1995 2000 2005 2010 new repair & maintenance

@constructingexc @UK_CCG ‘Economic climate change’ means companies faced a stark choice

Collaborative Working Champions ‘Survival Guide’ , 2009 Never waste a good crisis, 2009

@constructingexc @UK_CCG Client satisfaction suffered in the recession

@constructingexc @UK_CCG Predictability remains a challenge (cost)

@constructingexc @UK_CCG Predictability remains a challenge (time)

@constructingexc @UK_CCG Waste to landfill is not yet reducing Digest of waste and resource statistics, DEFRA, 2015

@constructingexc @UK_CCG Infrastructure Cost Review savings

@constructingexc @UK_CCG Departmental cost reduction trajectories

Chart 2: Department Cost Reduction Trajectories

Source: Cabinet Office

@constructingexc @UK_CCG The National Infrastructure Plan Charter

@constructingexc @UK_CCG Improving procurement timescales

@constructingexc @UK_CCG National Infrastructure Plan drivers - roads

@constructingexc @UK_CCG National Infrastructure Pipeline by sector

Dec 2013: 646 projects or programmes, £377 Billion

@constructingexc @UK_CCG New procurement models

Integrated Project Insurance (IPI) Cost Led Procurement (CLP) Two Stage Open Book (2SOB)

Originally proposed in the Final report to Government by the Procurement/Lean Client Task Group, July 2012

@constructingexc @UK_CCG Clients’ drivers – procuring for value? Or too many constraints?

Safety – Pressure More Legislation and health to open on Growth Regulation for less & welfare time

Delivering Budget Environmental “Future BIM “Level in ‘live’ cuts sustainability proofing” 2” facilities

SMEs and Collab- Places, Funding & Capex vs social Local jobs orative quality of Finance Opex value working life

@constructingexc @UK_CCG Prioritisation of client objectives

Time Cost Performance (%) (%) (%)

Speed Price Function (%) (%) (%) Examples of value add may include: • Social value, eg local employment Certainty Certainty Design • Environmental benefit (%) (%) (%) • Future revenue from the facility

Whole Quality life (%) (%)

“Value add” (%) adapted from Walker (2002)

@constructingexc @UK_CCG ‘Social value’ in procurement

Construction means local jobs and apprenticeships

LEK report for UKCG, 2009/2012 * • £1 investment generates nearly £3 of economic impact • Construction is a local industry • Imports < 8% of total supply • Construction is a domestic industry The “economic multiplier” (£2.84) • Extra £1-£2 end value has made a compelling argument (eg better education) for investment in construction for • Just about the highest such factor growth and employment * Construction in the UK economy - The benefits of investment @constructingexc @UK_CCG ODA ‘balanced scorecard’ for procurement

MISSION To deliver venues, facilities, infrastructure and transport on time for the London 2012 Olympic and Paralympic Games that are fit for purpose and in a way that maximises the delivery of a sustainable legacy within the available budget.

Value for Money

Fit for Purpose

Sustainable Development

Safe & Equalities & Quality & Cost On Time Environment Legacy

Themes Secure Inclusion Functionality

Promoting Programme On Time Health & Safety Environmental Functionality Financial Equality & [Games and Cost for the Games Scope & Design Responsibility Viability & WLC Diversity [energy, waste etc.] legacy] Health & Safety Ethical Ownership & Sub-programme Sub-programme Community Design Construction Sourcing Management Cost Time Engagement [Materials & impact & Operation human rights] Structure Health & Safety Community Project Project Inclusive Construction Behaviour Utilisation Cost Time Design quality & Culture & Benefits Supply Promoting Contract Contract Security [Design, construction Chain excellence and Cost Time & operations] Critical Critical Success Factors/Priority Management innovation Employment [IR, skills, fair employment, wages, welfare provision]

There will be a standard set of measures

KPIs Measures will be designed for each contract based upon these and the overall Policy values. For Construction Projects the UK Construction Industry KPIs will be used with detailed sub-measures beneath as required

@constructingexc @UK_CCG “New models of construction procurement” July 2014 Early supplier engagement, transparency of cost, integrated team working and collaborative working Adoption will contribute considerably to the reductions in the cost of construction Cost certainty, providing better long-term value What projects should cost, and will cost Commended by the Government’s Chief Construction Advisor, adopted widely over the coming years

@constructingexc @UK_CCG Two-stage open-book procurement

PROJECT SAVINGS OTHER BENEFITS Cookham Wood Youth Cost and programme certainty; lean programming; Justice Board - Innovation through collaboration; reduced prospective Ministry of Justice 20% operating costs

Project Horizon Improved whole life value; improved warranties and quality 17% control; employment and skills commitments; increased (+16%) recycling/reduced landfill

Supply Chain Improved end user satisfaction; reduced defects; reduced Management Group, waste to landfill, carbon emissions; improved employment Hackney/Haringey 14% and skills

Archbishop Beck Improved programme certainty; innovations through early school, Liverpool engagement of the team; improved local employment and 20% skills commitment

@constructingexc @UK_CCG Cost-led procurement

PROJECT SAVINGS OTHER BENEFITS Rye Harbour, Streamlined up-front procurement processes; continuous Environment Agency development of the project team; innovation through ECI 6% and collaborative working; significant time savings

Upper Mole, Driving innovation through the supply chain; integration Environment Agency 15% and collaborative working; benefitting the local labour force targeted and economy savings Anchor Property Improved services for customers and efficiency; supply Delivery chain integration; continuous improvement of client skills Transformation 9% incl cost, risk & value engineering

North West New-build 6 previously unemployed local residents all achieved NVQ Housing (Procure qualifications and then supported into future employment Plus) 20%

@constructingexc @UK_CCG Integrated Project Insurance

Integrated Project Team (or Alliancing or Integrated Project Delivery) with an insurance and QA ‘wrap’ to cover financial loss

Dudley College Centre for Advanced Building Technologies and Construction Skills’ (CABTech) is the first project to trial this radical new approach

@constructingexc @UK_CCG BS 8534:2011: Construction procurement policies, strategies and procedures – code of practice

A basis for the new ISO TC59/SC18 on “Construction Procurement”

@constructingexc @UK_CCG The procurement cycle

Business need Business case Gate review process Feasibility VM study Client brief Procurement methods Work packages Market engagement Supporting processes Outline business case Terms of engagement/forms of contract Appointing the team, incl. prequalification… The award stage Notification of award… Managing performance Managing delivery

@constructingexc @UK_CCG 2.3M people work in our industry, the biggest single industry sector from design to manufacturing to installation to maintenance

@constructingexc @UK_CCG Young people’s interests include

The planet IT Social media Fairness in society Fun Money Fulfilment

A “career” with one company is NOT a priority

@constructingexc @UK_CCG We create amazing products all over the world

@constructingexc @UK_CCG We use amazing technology

@constructingexc @UK_CCG TV has a (largely positive) appetite

@constructingexc @UK_CCG Rethinking Construction, 1998

5 Key drivers for change 4 Key project processes 7 Targets for improvement

Committed leadership Capital cost -10% Partnering Product Construction time the -10% Focus on the customer development supply chain Predictability +20% Product Team Integration Defects -20% Accidents -20% Quality driven agenda Project Production of implementation components Productivity +10% Commitment to people Turnover & profits +10%

@constructingexc @UK_CCG Construction 2025, BIS, 2013

People Smart Sustainable Growth Leadership Less waste Fatalities 95% NIL Reduction in waste to landfill Zero fatal accidents on construction sites

@constructingexc @UK_CCG Exceptional performance will require new models and new skills

@constructingexc @UK_CCG Intelligent informed clients…

An intelligent client The value adder The transactional

• Thinks international, long-term, • Rewarded for the value • Commoditised service programmes not projects created • Transacted engagement • Demands detailed data about • Collaborative • Lower margins assets and performance • Innovative • Clearly defined role • Tests new procurement • Solution focused • Bought in competition methods • Integrated capability • Builds alliances and an • Strategic business integrated supply chain relationship • Incentivises teams to delivers • High levels of investment more efficiently, predictably • Data rich • Produces outcomes not • Lean outputs • Shares the rewards

@constructingexc @UK_CCG Intelligent industry

An intelligent client The value adder The transactional

• Thinks international, long-term, • Rewarded for the value • Commoditised service programmes not projects created • Transacted engagement • Demands detailed data about • Collaborative • Lower margins assets and performance • Innovative • Clearly defined role • Tests new procurement • Solution focused • Bought in competition methods • Integrated capability • Builds alliances and an • Strategic business integrated supply chain relationship • Incentivises teams to delivers • High levels of investment more efficiently, predictably • Data rich • Produces outcomes not • Lean outputs • Shares the rewards

@constructingexc @UK_CCG Achieving Vision 2025

 Respect for people  Collaborative working  BIM  Lean, Industrialisation  Value in use  Sustainability

@constructingexc @UK_CCG Three overriding principles of collaborative working

Common vision and leadership

Culture and Processes behaviours and tools

@constructingexc @UK_CCG There are 6 critical success factors for collaborative working

Early involvement Selection by value Common processes and tools => BIM Measurement of performance continuous Long-term relationships } improvement Aligned commercial arrangements

@constructingexc @UK_CCG Proposed UK study tour

Activities Sectors • Client stakeholder meetings • Offices • Site visits – “industrial tourism” • Crossrail • Workshop/teach-in • Highways Peter Hansford, UK • Conference with CE members • Olympic legacy Government Chief Construction • eg on international markets Advisor Stakeholders Subjects • Clients • Procurement • Government • BIM • Leading industry players • Collaborative working & Lean

@constructingexc @UK_CCG Above all, customers want value and we need to understand how clients and users measure it (£, happy residents, CO2, time, social value etc)

Benefit Value = ______WHOLE Cost LIFE

@constructingexc @UK_CCG The value of client outcomes far outweighs the project costs

Operation and Maintenance

Construction Business Costs Outcomes Design

“1 : 5 : 200+”

@constructingexc @UK_CCG St Francis of Assisi Academy, Liverpool - sustainability delivering value

Green values help academy top new league table “A school which offers its pupils a green-focused education has won plaudits for having the best teaching standards in the country….” The Independent, 11 Jan 2007

“The excellent GCSE results and the fact that our students finished top of the national league tables for progress can rightly be attributed to the impact the building had on their studies”

@constructingexc @UK_CCG “Constructing Excellence”

Better ideas and inspiration Better evidence and intelligence Better conversations and connections Better influence and leadership

Contact [email protected] www.constructingexcellence.org.uk

@constructingexc @UK_CCG