Demonstrating Excellence Report - Constructing Excellence
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Demonstrating Excellence Report - Constructing Excellence

Demonstrating ExcellenceAn Evolution of the Programme of DemonstrationsInnovation ■ Best Practice ■ Productivity

The National Strategy Panel(Chair) Professor David Gann, Director, Innovation Studies Centre Imperial College LondonDr Richard Baldwin, ConsultantArnold Butler, Office of Government CommerceMichael Dickson, Chairman, Buro Happold, Chair nCrispRon Edmondson, Managing Director, Waterloo Air ManagementDr Rodger Evans, Construction Sponsorship Department, DTIKeith Hilton, ConsultantDavid Mosey, Partner, Trowers and HamlinsBarry Munday, Chairman, PRP ArchitectsPaul Nicholls, Strategic Relations Manager, United HouseSandi Rhys-Jones, Director, Rhys-Jones ConsultantsAdam Turk, Sales and Marketing Director, Jeld-Wen (UK) LtdTrevor Pugh, Director of Environment, Richmond Borough CouncilJudith Harrison, Director, The Housing ForumJohn Ford, Project Manager, Constructing ExcellenceAlex Holden, Project Officer, Constructing ExcellenceKatherine Mordecai, Project Officer, Constructing ExcellenceConstructing Excellence Regional Managers – by rotationCover Images:City Hall, LondonAdditional AcknowledgmentsSteve Hindley, Chairman and Chief Executive, The Midas Group and Chair Best Practice Knowledge BoardBrian Moone, Director, Best Practice Knowledge, Constructing Excellence3 Constructing ExcellenceDemonstrating Excellence – An Evolution of the Programme of Demonstrations

ContentsDemonstrating ExcellenceAn Evolution of the Programme of DemonstrationsBackground 2Introduction 3Traditional Construction Procurement 3Early Collaboration – Design and Build 4St Quintin Park Estate, North Kensington 4Project Partnering – A more integrated team 5Tonbridge Police Station 5Waterside Foot and Cycle Bridge, Coleraine, Northern Ireland 7Longbarrow Allotments, Bournemouth 7Christchurch Junior School Replacement 7Greater London Authority Headquarters 8Physical & Learning Disabilities Project, Trowbridge 8Woolgate Exchange 8Strategic Partnering Alliances 9Tanfield Comprehensive School 10Mill House, Surrey Place 11Portsmouth City Council Gas Central Heating Partnership 11Imperial Wharf, Fulham 11Walsall Housing Group: Sustainable Training for Sustainable Communities 12Drumglass High School, County Tyrone 12Great Western Earthwork & Structures Partnering Arrangement (GWESPA) 13Conclusions 13Looking to the Future 14Demonstrating Excellence – The way forward 18Appendix 1: Key Events 1994 - 2004 19Appendix 2: Corresponding Toolkits 23Appendix 3: Previous Demonstration Reports 241 Constructing Excellence – The Housing Forum Manufacturing Excellence Innovation ■ Best Practice ■ Productivity

Demonstrating ExcellenceAn Evolution of the Programme of DemonstrationsThe Rethinking Construction demonstrations programme was originally set up in 1998 (initially as an M4I, theMovement for Innovation programme, then followed by The Housing Forum in 1999 and LGTF, the LocalGovernment Task Force in 2000), following a call in the ‘Rethinking Construction‘ report for demonstrationprojects representing £500 million in construction costs to lead a movement for radical change in theconstruction industry.By March 2004, 414 projects representing a total construction value of eight billion pounds had been part ofthis programme across the whole of the UK and there was a total of 151 active projects. All demonstrations arerequired to use the industry headline Key Performance Indicators (KPIs) in order to evaluate their progressagainst the performance of the industry as a whole.This report provides a synopsis of the evolution of the demonstrations programme. It highlights the successes todate of demonstrating the future for the rest of the industry and, through the eyes of the industry leaders, itprovides a glimpse of the future direction for this programme. (A number of progress reports on thedemonstrations programme have been published during the five year period, see page 24.)2004 KPI ResultsDemonstrations compared to the industryDistribution of Demonstrations by Region, March 2004NB Over 100 is a positive scoreNorthern Ireland 6%Scotland 4%London 15%350300Demonstrations 2004 Industry 2004North West 10%North East 5%South East 14%250200150100Yorkshire &Humber 8%East Midlands 4%West Midlands 8%East of England 10%South West 12%Wales 4%500Client Satisfaction – ProductClient Satisfaction – ServiceDefectsSafety Average AIRPredictability Cost – DesignPredictability Cost – ConstructionPredictability Time – DesignPredictability Time – ConstructionProfitabilityProductivityConstruction CostConstruction TimeEnvironmental Impact – ProcessEnvironmental Impact – ProductStaff TurnoverEmployee SatisfactionQualifications & SkillsDistribution of Demonstrations by Sector, March 2004Non Housing47%Non Housing/Local Govt 22%Housing 25%Housing/Local Govt 6%2 Constructing ExcellenceDemonstrating Excellence – An Evolution of the Programme of Demonstrations

There is nothing in the world that some man cannotmake a little worse and sell a little cheaper, and hewho considers price only is that man‘s lawful prey.John Ruskin, 1819-1900IntroductionThrough the programme of demonstrations,Constructing Excellence is proving that constructionprojects procured and carried out through integratedtechniques achieve:Better qualityFewer accidentsIncreased productivityA staff turnover that is three times better thanthe industryA more qualified and highly satisfied work forceCompletion in less timethan the rest of the industry which is stilldominated by those using traditional techniques.In spite of this evidence many construction clientscontinue to favour the traditional method ofsegregated teams. This is an inefficient way of working.Although profitability on demonstrations hasremained consistent, there still remains a challenge tothe industry to turn competitive advantage intoimproved profitability. However it is clear from thefigures that many organisations are investing in thelong-term and also many are involved in the earlystages of frame-work agreements, which requires upfrontinvestment.Construction, by its very nature is reliant uponteamwork – many different talents and skillscoming together to provide a service.Traditionally these teams of experts have operatedin segregated silos and have only receivedessential project information shortly before theyare required at the ‘coal face‘.Teamwork requires every member to understandtheir objective and where they fit into the overallstrategy.Greater collaboration also encourages innovation.The evolution of the demonstration programme hasbeen one of continually increased and developedteam integration further down the supply chain andover longer periods of time.Traditional Construction ProcurementTraditional construction procurement is the process bywhich the majority of projects have been delivered inthe past. The process involves a client approaching adesigner to draw up project plans. These plans arethen passed to individual consultants, contractors,suppliers and sub-contractors to gain cost separateestimates. The lowest estimates are then usuallyaccepted. This results in the following:Minimal integration of the project team;activities are segregated and this makes theprocess disjointed.Solely price-based tendering establishes anadversarial relationship with both client andcontractor defending their respective positions,which leads to a neglect of focus on the quality ofthe end product.In turn, this poor communication between theteam and defensive protection of respectivepositions can lead to increased costs and time,and as a result very low client expectations.In today‘s construction environment the client who isadvised to accept the lowest price tender is beinggiven poor guidance, and often pays more in the end.Innovation ■ Best Practice ■ Productivity 3

Early Collaboration – Design and BuildDesign and Build contracts evolved to overcome some of the problems of traditional procurement. This involvedcollaboration between the construction team along part of the supply chain (for example the architect, costconsultant and contractor). In this scenario, one party (usually the principal contractor) will manage the designand cost consultants on behalf of the client, thus integrating the cost, design and construction processes. Earlyintegration demonstrations saw benefits from the design and build process as follows:1026St Quintin Park Estate,North KensingtonOctober 1999 – December 2002Team: William Sutton Trust, Durkan LtdKey success factors:The construction phase of theproject completed 9% sooner thanoriginally predictedNo reportable accidentsHow they did it:A decision was taken to partner with thecontractor who had just successfully completedthe latest phase of modernisation, Durkan LtdA design and build solution was selected sothat all the existing consultants would beemployed through the contractor to engineersavings with the exception of the quantitysurveyor who was retained as a cost advisorThe Clerk of Works role was omitted andDurkan carried out a self-certifying roleThe contract was executed under an unamendedJCT Design and Build contract butwith no retention held. The zero retention waspassed on to sub-contractors and the teamreported that this generated some real savingsThe rejection of lowest price tendering and therecognition of the need to address quality at thetender stage allowed contractors to work withdesigners at the design stage and were thereforeable to contribute their expertise and commenton the practicality of the construction of thedesign team‘s design.This approach reduced the chance of anadversarial relationship generated by increasingcosts and over running timetables, often theresult of late design changes.Better communication and understandingbetween client, contractor and consultantimproved the quality of the end-product and theclients‘ satisfaction – the result of the teamworking towards the same aim rather thandefending their own positions.In addition the collaboration between designerand contractor at design stage facilitated thework of the Planning Supervisor in co-ordinatingthe health and safety aspects of design andconstruction. Design and build demonstrationssaw improvements in safety standards.The first demonstration KPI results in 2000from Movement for Innovation demonstrations(i.e. non housing) showed that demonstrationswere twice as safe as the industry average.This achievement has been maintained.4 Constructing ExcellenceDemonstrating Excellence – An Evolution of the Programme of Demonstrations

Project Partnering – A more integrated teamProject partnering is the term given to therelationship of two or more members of the principalteam coming together on a single project. This goesbeyond design and build by getting more membersof the project team together, including client,contractor, sub-contractors and consultants, to workas a team at design stage. Partnering agreements areoften entered into with collaborators agreeing toshare associated risks as well as the benefits of costsavings. This results in the following:Demonstrations of project partnering found thatincreased collaboration of the supply chainprovided more benefits than those resulting fromthe design and build processImproved communication between the teamresulted in identifying difficulties earlier than withtraditional procurement and in design and buildcontracts.Predictability of both cost and time improved aslate design changes became less likely withspecialist sub-contractors adding to the expertiseof the main contractor at design stage.The 2001 KPI results showed that in 2000,demonstrations outperformed the industry in:predictability in the time and cost of designpredictability in the time and cost of constructionTonbridge Police Station, demonstration no. 94, page 594Tonbridge Police StationNovember 1996 – January 1998Team: Gallaher, Kent County Constabulary, KentProperty Services, Denne Mechanical, Kingfisher,Swift Roofing Contracts, R&H Decorators, Vortec,Gilbert & Stamper, Denne Building Services, KentCounty CouncilKey success factors:Successfully procured within the£5.7million budgetDelivered in 62 weeks – 12 weeksfewer than the original programmeWinner of the ‘Built in Quality‘award made by Tonbridge andMalling Borough Building ControlHow they did it:Initial partnering between Kent PropertyServices and Kent Police for design andprocurementMain contractor, Wates, selected by the twopartners after proposals, interviewing andshort-listingSub-contractors Denne Building Services andGilbert and Stamper (electrical sub-contractor)became the fourth and fifth partners, whichenabled much of the commissioning ofspecialist Police systems to be done duringconstructionAt the time, Bill Wallis of Wates Constructioncommented that, “partnering is getting a quality jobquicker, safer, cheaper and right first time.”Demonstration teams signed up to partneringcharters and held regular partnering meetingsthat helped to solve issues as and when theyarose on the project, so reducing the delays andassociated costs of problem solving in the past.Waterside Bridge, demonstration no. 311, page 7Innovation ■ Best Practice ■ Productivity 5

Partnering teams began to benchmark their ownperformance, for example the client rating thecontractor‘s performance and vice versa; thishighlighted any problems in the team early on inthe project process.Longbarrow Allotments, demonstration no. 1034, page 7This tenant/end-user involvement also led to abetter quality end-product. Some projectpartnered demonstrations focused onbenchmarking this increase in customersatisfaction.Trowbridge, demonstration no. 1094, page 8Partnering agreements began to includeprovision for sharing risk/reward, thusincentivising the team to resolve problemstogether, therefore moving even further awayfrom the traditional adversarial relationship.Christchurch School, demonstration no. 165, page 7This also encouraged innovation with financialbenefits being awarded to the partner whosuggested it. Ideas such as using an alternativeconstruction system, e.g. off-site components, ornew technology systems came to the drawingboard where they may not have otherwise.GLA Headquarters, demonstration no. 219, page 8Likewise, the safety improvements seen from theearly design and build projects were enhancedon project partnering demonstrations with thewhole team working together and pooling theirexpertise to make sites safer.The combination of expertise and generalcommitment from the whole team to making theproject successful led to an increase in clientsatisfaction and a better quality product.This culture change and team collaboration alsoextended beyond client satisfaction to the enduserwith, for example, tenants on housingprojects being involved in the partnering teamand in contractor appointments.The growing skills shortage also highlighted theimportance of a ‘respect for people‘ focus,particularly in on-site conditions, and anincreasing focus on the recruitment and retentionof staff.The ethos of partnering brought with it theneed to embrace fundamental culture change.In some cases individual team members havehad to be moved off the project because theywere not able to change and commit to thepartnering process.Whereas the majority of team members onpartnering projects have commented that theyfound work on partnering projects moreenjoyable than other projects they had workedon in the past.In a survey of The Housing Forum demonstrationsconducted by the Science and Technology PolicyResearch Unit at the University of Sussex (2001),when asked ‘How did this project differ from otherprojects you have worked on?‘ 81% of respondentssaid that it was ‘More Fun‘.Woolgate Exchange, demonstration no. 141, page 86 Constructing ExcellenceDemonstrating Excellence – An Evolution of the Programme of Demonstrations

Waterside Foot and Cycle Bridge, Coleraine, Northern IrelandNovember 2000 – December 2001Team: Department for Regional Development Roads Service, Graham Construction, Doran Consulting,Central GovernmentKey success factor:Bridge was completed six weeks ahead of programme311How they did it:Project nearly failed at tender stage because of the complex risks in financing and building itThe project was tendered through the ICE 5th edition contract and initially the client, Department for Regional Development RoadsService, wanted to rescind clause 12 that shifts all risk for conditions that the contractor, Graham Construction, could not reasonablyforesee onto the clientAfter the contract had been signed, the client, contractor and consultant (Doran Consulting) decided that a partnering ethos was theonly way to manage the risks involved on the project, and got the steel work and river works contractors onto the core teamThe partners identified 38 issues and three teams to manage these risksIssues were reviewed weekly by the site agent and resident engineer and they monitored how works packages would be affected165Christchurch Junior SchoolReplacementJune 2000 – July 2001Team: Dorset County Council, Christchurch JuniorSchool, Building ManagementKey success factors:School was on average £85.50cheaper per square metre thancomparable schoolsWas delivered on time and withinbudgetHow they did it:A partnering framework delivered through atwo stage tendering process with contractorselection based on: quality and price;guaranteed maximum price; incentivisationbased around target cost and valueengineeringSub-contractor appointment was agreed by thewhole teamThe team shared offices, email and a singleproject databaseLongbarrow Allotments, BournemouthApril 2000 – January 2001Team: Western Challenge Housing Association,Bournemouth Borough Council, Mansell, Trowersand Hamlins, McNaughts, Anthony WardPartnership, PH Warr and Partners, Tenant GroupKey success factor:Architect and contractor changed process and teamreporting structures, which were highlighted asweaknesses during the appraisal processHow they did it:Western Challenge Housing Associationwanted to measure their satisfaction as aclient and included themselves in theappraisal processKey members of the team were asked toself appraise, with agreement from the teamon how they had performed, in monthlymeetings on a one to ten scaleMeasuring in this way identified poorperformers and highlighted areas forimprovement on subsequent projects1034Innovation ■ Best Practice ■ Productivity 7

Greater London AuthorityHeadquartersJune 2000 – April 2002219 1094Physical & Learning DisabilitiesProject, TrowbridgeOctober 2000 – June 2001Eight-bedroom home for people with physicalTeam: Greater London Authority, Ove Arup, CIT,Mace, Foster and Partners, Warner Land SurveyorsKey success factors:The innovative structure is a series of tubularsteel columns that change direction at everyfloor levelAssembled at the same rate as a conventionalrectangular frameNo cost increases or delays caused bydimensional errorsHow they did it:Warner Land Surveyors used a high-order 3Dspatial instrument system known as Monmosthat was originally developed by Japaneseinstrument maker Sokkia to control geometricalaccuracy in supertanker productionand learning disabilities.Team: West Wiltshire Housing Society, RussellConstruction, Milbury Care ServicesKey success factors:Excellent client satisfactionZero defectsHow they did it:Focus on the end-userThe partnering team included a representativefrom Milbury Care Services who were aware ofthe actual needs of the people who wouldoccupy the home and could therefore adviseand give constructive solutions to the team ona number of issues. For example some of thespecialist services that were to be provided athigh cost were omitted because the occupantswould not have used themWoolgate ExchangeJuly 1998 – July 2000141Team: West London Borough, Scotts of Thrapston, SBFI, Phoenix Interiors, Interior Plc, GenslerInternational, PMI, Hotchkiss, E PooleKey success factor:A recorded 40% fewer worker inductions than a similar sized projectHow they did it:The use of portacabins was abandoned for fit-out team offices – after pre-planning theneeds of all suppliers, they designed and set up a fully serviced, bespoke office where theconsultants and contractors could work as an integrated teamA canteen, run to high street restaurant standards and office-quality toilet, changing andshower facilities were established in a central location that was accessible to everyone,regardless of their role and statusInterior design of the offices encouraged an open-door policy, and equality amongst teammembers8 Constructing ExcellenceDemonstrating Excellence – An Evolution of the Programme of Demonstrations

Strategic Partnering AlliancesStrategic Partnering Alliances take project partnering further by involving the same partnering team on a numberor series of projects, or for a specified period of time for repeat works (e.g. in the case of a rolling programme ofmaintenance). This provides a framework for continuous improvement. Strategic Partnering embeds thepartnering ethos as the normal working practice rather than a cutting-edge innovation; in fact it is seen as theprecursor to achieving such innovation. The characteristics and benefits of this form of partnering are:It encourages a “long-term” philosophy andperspective in the industry.It increases the benefits already gained bythe demonstrators of project partnering.Further cost reductions are seen in strategicpartnering alliances through the additionalinvestment from value management over alonger period, leading to the increasedpotential for savings.Tanfield School, demonstration no. 246, page 10Having the same team and recordinglessons learnt from previous projects hasled to company policies on, as well asmeasures to promote, lean construction,health and safety and the reduction of allforms of waste.The drive for continuous improvement bythe same partnering team has beenachieved by the demonstrators largelythrough an increased use of toolkits suchas Design Quality Indicators (DQIs). Ifthese are used from project concept to theeventual use of the product, they highlightwhat each stakeholder needs from thebuilding and then how effectively the endresult has addressed those specific needs.Mill House, demonstration no. 388, page 11Post occupancy evaluations have also beenused to assess the effectiveness of thewhole project through the quality of theend-product.The benefit of increased innovation fromthat seen in project partnering has led tothe increased use of IT in strategicpartnering projects. Teams are using theInternet to access design plans, sharedfiles, databases, etc.Long-term partnering arrangements providea continuity of work that allowsorganisations to further invest in training,drawing labour from the local community,and in other respect for people issues.Portsmouth City Council Gas Central HeatingPartnership, demonstration no. 1116, page 11Teams are working as “virtualorganisations”, sharing offices and facilitieswhich reduces administration costs andincreases efficiency.Demonstrations of sustainability arefocusing on protecting the naturalenvironment and minimising theirconsumption of energy in embodiedconstruction costs and in costs-in-usethereafter.Innovation ■ Best Practice ■ Productivity 9

246Tanfield Comprehensive SchoolJanuary 2001 – July 2001Team: Durham County Council, ShepherdConstruction, DTA, Ian Carewell AssociatesKey success factor:Value engineering led to 20% being cut offthe target cost and as a result another fourclassrooms, a staff room and a library wererenovated and the heating system wasimproved.How they did it:In value engineering workshops with keydesign personnel, the construction partnersand specialist trade contractors identifiedpotential savings which led to the following:- £15k saved by repairing window surroundswith stainless steel anchors instead ofremoving and renewing damaged stone- £10k saved by use of a two-pack epoxystone repair technique instead of newsandstone- £27k saved by reusing some existingequipment that would achieve thespecification over the desired life, such asluminaires, distribution systems and mainpipe runsIn the 2003 KPI results, demonstrations achievedover twice the industry average for EnvironmentalImpact on the Product, which measures howsatisfied the client was that environmental impactswere taken into account in the finished product; andone and a half times the industry average forEnvironmental Impact on the Process, whichmeasures how satisfied the client was that theenvironmental impacts were controlled during theconstruction phase.More recent demonstrators are using masterplanning to achieve community sustainability bycreating environments where people can live andwork, thereby generating wealth for thecommunities regenerated or created.Imperial Wharf, demonstration no. 1109, page 11Large inner city regeneration projects of existinghousing stock are a current challenge for localauthorities, Arms Length ManagementOrganisations, Large Scale Voluntary StockTransfers and housing PFIs. Strategic partnering isenabling them to train the local community toregenerate their own communities.Walsall Housing Group, demonstration no. 1195, page 12PFI projects, because of their long-termperspective and the responsibility of thecontractor for their maintenance over a30 year period, provide an ideal opportunity forthe industry to benefit from strategicpartnerships, once the contractor has beenselected by the client.GW Earthwork and Structures, demonstration no. 1172, page13, Drumglass School, demonstration no. 150, page 1210 Constructing ExcellenceDemonstrating Excellence – An Evolution of the Programme of Demonstrations

Mill House, Surrey PlaceJune 2002 – November 2003388Team: Geoffrey A Barnett & Associates, Clarke Nicholls Marcel, Snashall Steel Fabrication, Co-ordinated ServicesLtd, Alumet Systems Ltd, Business Engineering Group, Howard George Associates, MarchgaleKey success factor:Mill House was used as a trailblazing project for the DQI‘s. A dedicated researcher has used the data from the DQI process, KPIs andother analytical tools to develop a more informed profile of the project team and its output.How they did it:The Focus Group of the Mill House team (the Client, Consultants and Contractor) used a process called Selecting the Team (STT)to procure Specialists to the Project Team. STT is a tender evaluation tool developed by the Business Engineering Group at theUniversity of Southampton. STT identifies the objectives of its user and attempts to find a best fit for those criteriaWorking in collaboration with the CIC it has been suggested to them that the DQI‘s lend themselves well to the STT process as aquick and simple method of eliciting a client‘s or core group‘s opinion of several design issues at the start of the job1116Portsmouth City CouncilGas Central Heating PartnershipongoingTeam: Portsmouth City Council, United House,Key success factor:Long-term refurbishment contract betweenUnited House and Portsmouth City Councilprovided United House with continuity ofworkLocal community members were recruitedfor permanent work.How they did it:An alliance with a local training provider wasset up drawing people from the localcommunityPortsmouth City Council provided an emptyproperty for training and United House supportthe costs of trainingThe training approach was also recognised forgovernment supportTwo trainees now work full-time for United House.1109Imperial Wharf, Fulham, Stage 1May 2000 – May 2006Team: St George, Family Housing Association, Acton HousingAssociation, Ujima Housing Association, William Sutton TrustKey success factors:Approximately 5000 people are estimated to live in Imperial Wharfand the development is creating more than 1000 permanent jobsthrough the new businesses, offices, leisure, shopping, restaurant,café life and community usesThe development will make a significant contribution to resolvingthe skills shortage in the area.How they did it:St George has set up training programmes to meet the future needsof the industry to ensure maximum access to long-termemploymentThey are providing a number of subsidised business units andare committed to ensuring that long-term jobs from this mixeduse development are delivered beyond the physical constructionof the projectTherefore the social and economic benefits will be maximised anddeliver long-term prospects to the local communityInnovation ■ Best Practice ■ Productivity 11

Drumglass High School, County TyroneOctober 1997– August 2000150Team: Building Design Partnership, Mason Solicitors, Southern Education Library Board, H&J Martin, Equity Bank,Martin Facilities ManagementKey success factor:Completed one year ahead of the other PFI projects launched in 1997This project is a showcase for what can be achieved when design drives the resultHow they did it:Materials, finishes, plant and equipment were value engineered to give optimum low-maintenance – long-lifeBuildings were pre-wired for the next generation of IT facilities to be installed under the Classroom 2000 initiative.Principal teacher Derek Wilson said: “It was design-led. That‘s why we‘re a year ahead of the other schools.”Walsall Housing Group - Sustainable Trainingfor Sustainable CommunitiesOngoing1195Team: Walsall Housing Group, Gavin Purchase Construction, SelectWindows, Nationwide Windows, Graham Holmes Astraseal, Wates,Frank Haslam Milan, Superior Plumbing Installations, OctopusElectricalKey success factors:Co-ordinated approach to training and the employment oflocal people.The ability to deliver bespoke training to meet contractingpartners‘ specific needs related to Walsall Housing Group‘smajor works programme and Contractors‘ wider contractualobligations.How they did it:Walsall Housing Group (WHG) have established partnershipswith eight Major Contractors working within the refurbishmentprogrammeAll partners are contracted to ensure they employ local labourand are committed to working with WHG Skills Centre TrainingAgency to recruit and train local people, including non-traditionalentrants to the construction industryContractors all co-ordinate their training and apprenticerecruitment requirements through the Agency12 Constructing ExcellenceDemonstrating Excellence – An Evolution of the Programme of Demonstrations

ConclusionsOrganisations involved in the exemplars of thedemonstration programme are taking the lessonslearnt through project and process demonstrationsand implementing them throughout their entirebusiness to improve its performance, productivityand profitability.In 2002, the demonstrations programme recognisedthe incremental learning from projects to themeswithin whole organisations with the production ofthe Waterloo Air Management study on Supply ChainIntegration – The Why, What and How of partneringthe supply chain, Waterloo Air Management,November 2001. Four further detailed case studiesof themed changes within organisations have sincebeen produced and are now published alongsidethis report, as follows:Costain, Building Awareness, The EducationalSupply ChainLovell, Investing for the FutureTaylor Woodrow, Supply Chain Partnering, a casestudy demonstrating the why, what and how ofstrategic partnering in the supply chainWestern Challenge, Partnering in Practice, a casestudy demonstrating the why, what and how ofpartneringThe organisations actively involved in thedemonstrations programme, initially on a projectbasis and then through pan-organisational changeare setting the standard for the rest of the industry toaspire to.1172Great Western Earthwork &Structures Partnering Arrangement(GWESPA)April 2002 – March 2012Team: Network Rail, Alfred McAlpine, TGPKey success factors:Accident frequency rate of zeroTarget efficiencies over 10%How they did it:Ten year partnering arrangement betweenNetwork Rail and Alfred McAlpineA dedicated integrated management team wasset up comprising staff from both organisationson a ‘best person for the job basis‘There was commitment from bothorganisations to operate in a totally open bookmanner, setting up joint systems to shareinformation and best practiceThe avoidance of man markingPlanned works were undertaken on the basisof target costs with appropriate risk registeragreed at design signoff stage (Form B)Actual costs were paid, and all pain or gainmeasured against the target costs are sharedon a 50/50 basisAnnual work banks were instructed from theprogramme office two years in advance toallow the development of designsPerformance was measured againstbenchmarks and KPIs, the success of whichdetermined the value of future work banksInnovation ■ Best Practice ■ Productivity 13

Looking to the FutureThe following quotes from industry leaders illustrate their visions for the future:Constructing Excellence uses the successful demonstration programme as thecatalyst for the implementation of innovative processes, strategic businessimprovement, advanced systems and state of the art technologies. We aim todemonstrate excellence by capturing knowledge that can be used to improvethe long-term effectiveness, competitiveness and dynamics of a viable UKconstruction industry. Our vision is:To identify best practice demonstration projects focused on the sustainable useof the constructed product over its whole life and in the context of communitywealth creation.Dennis Lenard, Chief Executive, Constructing ExcellenceThe programme of demonstrations has shown that integrating teams and managingthe supply chain effectively can provide excellent results in raising productivity anddriving down costs. Whilst frequent customers to the industry become familiar withconstruction practice and process – ‘one-off‘ clients often find it difficult to acclimatisethemselves given the sharp learning curve. It is for this reason that we need commonpan-industry integration.Pioneering companies are adopting the integration toolkit developed by the StrategicForum for Construction and through the Constructing Excellence DemonstrationProgramme are showing real business benefits.The demonstration programme will continue to promote integration and advanceindustry progress accordingly.Peter Rogers, Chairman, Strategic Forum for Construction14 Constructing ExcellenceDemonstrating Excellence – An Evolution of the Programme of Demonstrations

Accelerating Change commits the industry to major improvements, not least on ‘PeopleIssues‘ so that we have an industry that respects its workers and provides decent workingconditions. The best Demonstration Projects show the way forward to others. Forinstance, Skanska (Project 52) changed behaviour and reduced injuries by 50%. Theydeveloped a Site Safety Performance System applying the outcomes of some HSEbehavioural research. Through an M4I cluster, another major contractor further developedthis approach thus widening the application of best practice. This is ConstructingExcellence at its best.Kevin Myers, Chief Executive of Construction, The Health & Safety ExecutiveThe Constructing Excellence Programme of demonstrations is providing evidence of adirect correlation between quality of design, increased performance and more efficientbuildings. But this relationship requires significant investment in the workforce.Two significant challenges that face the public sector are whole-life costing andsustainability. Both of these are challenging to deliver as they inevitably involveadditional capital costs to secure long-term benefits and much current funding isbased on historical lowest price tenders. This additional cost must be recognised andabsorbed into the overall budget build-up if we are to build long-term efficientstructures.The future aspiration of the industry must be to encourage more young people toconsider construction as a career. This can only be done if the industry is willing toaddress its poor image and safety record.Tim Byles, Chairman, Local Government Task ForceConstructionSkills is committed toworking with ConstructingExcellence to further spread thislearning process and to developpeople with the skills to make thisbest practice the mainstream ofthe future.Peter Lobban, Chief Executive, CITBConstructionSkillsInnovation ■ Best Practice ■ Productivity 15

The Constructing Excellence Demonstration programme has shown that the industrycan deliver better. The theory has been put into practice. We have moved on from justhaving an intuitive feeling that we can deliver better whole-life-value, to the reality ofactually having the evidence.Demonstration projects have shown that the industry can deliver on time, withinbudget, to quality and with fewer defects, and all of this within a framework ofimproved health and safety performance. This fits totally with OGC‘s own AchievingExcellence in Construction Future Strategy agenda – which is delivering the bestbalance of quality and whole-life cost to meet user requirements.John Oughton, Chief Executive, Office of Government CommerceThe Demonstration Programme has been a brilliant initiative for bottom-up innovation in theprocess of construction to provide for the industry‘s client a better quality of product alongsideimproved profitability and safe and healthy practice. It has clearly demonstrated that firms orteams engaged in the programme of best practice also do better and are more profitable.This process needs greater regional emphasis to bring more small and medium-sizedcontractors and design professionals into the process.As Chairman of the Construction Research and Innovation Strategy Panel (nCRISP) I seeConstructing Excellence driving the immediate needs for business, process and productimprovement especially at regional and national level. nCRISPcan then work with ConstructingExcellence in stimulating medium and long-term opportunities for industry collaborative RD&Iand engage in learning from other industries and from overseas practice.Michael Dickson, Chair, nCRISPThe success of the demonstration programme shows how proud people are of theirsuccesses, and how willing they are to share the lessons from these with others. Sadly,too few manufacturers and suppliers initially recognised the important role they had toplay in these projects.How things have changed. The recent publication – Building Success – Lessons fromManufacturers and Suppliers who got it right – highlights ten demonstration projectsfrom across the industry, and there were many more that were only omitted throughlack of space. Not long ago we would have struggled to have three examples submittedfor inclusion in such a publication. The demonstration concept really does work.Michael Ankers, Chief Executive, The Construction Products Association16 Constructing ExcellenceDemonstrating Excellence – An Evolution of the Programme of Demonstrations

The Demonstrations programme has not only show-cased how the construction industryis innovating and improving; it has provided case studies for more companies to learnfrom best practice in rethinking construction.Stephen Lidgate, Chairman, The Housing ForumThe construction industry is awakening to the concept of value and how it delivers thatvalue to customers and society. In this awakening it needs to see that value lies in thebeneficial use of buildings over their lifetime to facilitate function, performance andsustainable impact on the environment. Better whole-life building value, delivered bymore effective processes, are the keys to both the economic success of the country andits quality of life. The built environment sector is over 20% of GDPand provides over75% of our fixed assets. The industry‘s contribution will be crucial.Richard Saxon, Chairman, Be - Collaborating for the Built Environment, Making a differenceTo be successful, the construction industry needs to do more than streamline workingpractice, drive out waste and exploit new technology. The labour intensive constructionindustry needs to provide a better working environment in order to recruit and retain theright men and women.Constructing Excellence, in collaboration with ConstructionSkills and others, is committedto helping the industry bring about positive change. The programme of demonstrationprojects highlights the benefits of a culture of respect for the workforce. The programmealso shows the wide range of skills and competencies needed to deliver successfulprojects, highlighting the tremendous range of career opportunities in the industry.The challenge is to promote these opportunities more effectively and to provide aworkplace that welcomes diversity. Construction faces strong competition from othersectors in recruiting the most competent. The industry also faces an increasingly diverse,demanding and informed customer base. For example, women represent 45% of theworking population in the UK, yet only 3.5% of construction professionals and a mere1% of crafts and trades are female. By respecting people, regardless of sex, race orreligious belief, construction can make a real difference in our changing world.Sandi Rhys-Jones OBE, RhysJones ConsultantsInnovation ■ Best Practice ■ Productivity 17

Demonstrating Excellence – The way forwardKey Objective: promoting the exchange of knowledge through demonstrations toincrease productivity and generate national wealthAs the Constructing Excellence Board member responsible for DemonstratingExcellence I am pleased to confirm that Demonstrations will remain a key part ofthe Constructing Excellence agenda.This report confirms that the demonstrations programme has achieved substantialsuccess over the past five years in providing knowledge on best practice, influencingchange, providing feedback to the government and the industry and by encouragingbest practice and cutting-edge innovation. I am committed to ensuring thatConstructing Excellence will continue to build on this success and expand theprogramme to reflect changes that are already becoming evident. There will, forexample, be more demonstration organisations – examples of culture change andthe spread of best practice within organisations.An emphasis of the demonstrations programme will be illustrating the importanceof framework agreements and the need for improved partnerships between thepublic and private sectors. Also the regional network of demonstrations will continueto be a key focus of the programme to build upon the already thriving exchange ofinformation at a regional level.Constructing Excellence will also be celebrating the success of its demonstrationsthrough high profile visits to sites and organisations and through showcasingexemplars at exhibitions both nationally and regionally.The Best Practice Knowledge Board, chaired by myself, will build on the work of theNational Strategy Panel and I would like to thank them on behalf of the organisationfor their commitment over the past two years culminating in this excellent report.Steve HindleyChairman and Chief Executive, The Midas GroupChair Best Practice Knowledge BoardApril 200418 Constructing ExcellenceDemonstrating Excellence – An Evolution of the Programme of Demonstrations

Appendix 1: Key Events 1994 - 2004‘Constructing the Team‘, The Latham Report 1994The final report of the Government/Industry Review ofprocurement and contractual arrangements in the UKconstruction industry.Identified limitations and current inefficiencies.The report indicated partnering as a way forward toimprove efficiency and profitability in the UKConstruction Industry and suggested that 30% savingscould be achieved through this method ofprocurement.Construction (Design and Management)Regulations, 1994The CDM Regulations are aimed at improving theoverall management and co-ordination of health, safetyand welfare throughout all stages of a constructionproject to reduce the large number of serious and fatalaccidents.CRISP, December 1995CRISPwas formed as a joint industry and Governmentpanel to implement the Whole Industry ResearchStrategy (WIRS).CRISPwas established with two main objectives:- To encourage competitiveness through theappropriate use of research and innovation- To identify the construction community‘s researchand innovation priorities, and to promote these to themajor funders‘Rethinking Construction‘, 1998The report of the Construction Task Force chaired bySir John Egan advised the Deputy Prime Minister onthe opportunities to improve the efficiency and qualityof delivery of UK construction, to reinforce the impetusfor change and to make the industry more responsiveto customer needs.Identified five key drivers for change: committedleadership; a focus on the customer; integratedprocesses and teams; a quality driven agenda; andcommitment to people.Set out annual targets for the industry to be achievedand proposed the creation of a ‘movement for change‘that would be driven by industry leaders to inspire theneed for change.Movement for Innovation, 1998Formed in November 1998 to implement therecommendations of ‘Rethinking Construction‘.Aimed to lead radical improvement in construction invalue for money, profitability, reliability and respect forpeople, through demonstration of best practice andinnovation.Established demonstration projects programme seekingto facilitate performance efficiencies, to achievesustained annual improvements set out in ‘RethinkingConstruction‘ as follows:- 10% reduction in cost and construction time- 20% reduction in defects and accidents- 10% increase in productivity and profitability- 20% increase in predictability of project performance.The Drivers, Process and Targets that came out of the Rethinking Construction report, known as the “5-4-7”Drivers for Change Improving the Project Process Targets for ImprovementCommitted LeadershipFocus on the CustomerProduct Team IntegrationProductDevelopmentPartnering theSupply ChainCapital Cost -10%Construction Time -10%Predictability +20%Defects -20%Quality driven AgendaCommitment to PeopleProjectImplementationProduction ofComponentsAccidents -20%Productivity +10%Turnover & Profits +10%Innovation ■ Best Practice ■ Productivity 19

Construction Best Practice, 1998Set up in 1998 to provide support to individuals,companies, organisations and supply chains in theconstruction industry seeking to improve the way theydo business.Offered a range of services tailored for users atdifferent stages of knowledge and experience.- Workplace diversity- Site facilities and the site working environment- Health- Safety- Career development and lifelong learning- The off-site working environment- Behavioural issuesA suite of toolkits was released for trial.KPIs, 1998Launched to benchmark the performance of theconstruction industry based around ten headlineindicators.First set of demonstration project KPI data published in2000 charting the performance of the projectsthroughout 1999, as compared with national industrydata.Achieving Excellence, March 1999An initiative launched to improve the performance ofcentral government departments, their executiveagencies and non-departmental public bodies as clientsof the construction industry.Through the initiative central government clientscommit to maximise, by continuous improvement, theefficiency, effectiveness and value for money of theirprocurement of new works, maintenance andrefurbishment.The Housing Forum, 1999Formed to become the network for radical change andinnovation within the house building sector.Aimed to bring together all parties in the housebuilding supply chain that were interested in, or alreadycommitted to, improving the performance of theindustry.Local Government Task Force, 2000Formed in March 2000 to implement therecommendations of ‘Rethinking Construction‘ withinLocal Authority clients.The Clients‘ Charter, 2000July 2000 Deputy Prime Minister challenged the clientcommunity to draw up a charter that would set out theminimum standards they expected in constructionprocurement, their aspirations for the future and aprogramme of steadily more demanding targets todrive up standards. The Clients‘ Charter was designedto meet this challenge.By signing up to the Charter, construction industryclients make a clear statement of their commitment toimprove their own performance.In February 2004 the strategic management of theClients‘ Charter was passed to Constructing Excellence.PPC 2000The first partnering contract was published in 2000.Key features include:- Guaranteed maximum price before start on site.- Ring fenced profits and overheads.- Incentives built in to promote savings and valueengineering.- A detailed joint problem-solving procedure.‘Modernising Construction‘ The National Audit OfficeReport, January 2001Report on how the procurement and delivery ofconstruction projects in the UK could be modernisedwith benefits for the whole construction industry.Key recommendations to the industry included makinggreater use of innovation to improve public sectorconstruction.Respect for People, 2000In November the report ‘A Commitment to People, OurBiggest Asset‘ was published by the Respect for Peopleworking groupThe report identified seven priorities for action:Construction Skills Certification Scheme, June 2001The aim of the Construction Skills Certification Scheme(CSCS) is to raise standards of both workmanship andhealth and safety within the construction industry.The scheme ensures a consistent standard is applied20 Constructing ExcellenceDemonstrating Excellence – An Evolution of the Programme of Demonstrations

across the industry and gives employers and domesticconsumers an effective way of identifying skilled andexperienced professionals.For individuals, the CSCS card brings recognition ofprofessional abilities and skills and is aimed atimproving employment prospects.Rethinking Construction, 2002March 2002, the Movement for Innovation, HousingForum and Local Government Task Force cametogether as one organisation under the umbrella title,Rethinking Construction, to improve efficiency.Demonstrations programme devolved to become moreregionally focused.National Strategy Panel working group formed tostimulate improvement through tangible change withinthe construction industry by extending the relationshipbetween Rethinking Construction and industryrepresentatives at all levels in exploiting the lessonsarising from the Demonstration Process, and howthese can be embedded within the industry.A guide to project team partnering, April 2002The second edition of the Guide published by CICThis document is aimed at providing vital guidance foreveryone who sees the potential of partnering but isunsure of his or her ground.Beyond advice this document also provides a templatefor multi-party partnering contract.Design Quality Indicators, 2002July 2002, the trailblazing scheme was launchedpiloting a new method for assessing the design qualityof buildings.Developed by Construction Industry Council in order toenable all stakeholders involved in the builtenvironment to gain more value from the design ofbuildings.Launched as on online toolkit in October 2003.Accelerating Change, 2002Report launched at the end of the first year of theStrategic Forum for Construction chaired by PeterRogers of Stanhope Plc.It identified a number of strategic targets:- By the end of 2004, 20% of construction projectsshould be undertaken by integrated teams and supplychains.- 20% of client activity by value should embrace theprinciples of the Clients‘ Charter.- By the end of 2007 both figures should rise to 50%.Respect for People Toolkits, 2002Toolkits were formally launched in July 2002.The toolkits take the form of checklists and scoringsystems as a measuring tool for benchmarkingperformance and address the following themes:- Diversity in the workplace- On-site welfare- HealthAn updated version of the 5-4-7Targets known as the “5-6-10”Drivers for Change Improving the Project Process Targets for Improvement(Headline KPIs)Committed LeadershipProductDevelopmentPartnering theSupply ChainClient Satisfaction – Product +10%Client Satisfaction – Service +10%Defects -20%Focus on the CustomerPredictability – Cost +20%Product Team IntegrationProjectImplementationProduction ofComponentsPredictability – Time +20%Profitability +10%Quality driven AgendaCommitment to PeopleSustainabilityRespect for PeopleProductivity +10%Safety -20%Construction Cost -10%Construction Time -10%Innovation ■ Best Practice ■ Productivity 21

- Site safety- Career development and lifelong learning- Worker satisfaction questionnaire- Work in occupied premises- Health and safety in procurement and design- Off-site working environmentIn excess of 8,000 toolkits have been distributed andin addition it is downloadable from the website.Beacon Council Scheme, 2003The Beacon Council Scheme was set up in 1999 todisseminate best practice in service delivery acrosslocal government.Each year, the government selects themes for thebeacon scheme.In 2003 Rethinking Construction was selected as oneof the themes, there were 27 applicants and sixsuccessful councils were awarded Beacon Councilstatus for Rethinking Construction for 2003-2004.The Councils are:- Barnsley Metropolitan Borough Council- Stockton on Tees Borough Council- Middlesbrough Borough Council- St Helen‘s Borough Council- Norfolk County Council- Mid Devon District CouncilODPM Sustainable Communities Plan: building for thefuture, February 2003Launched by the Deputy Prime MinisterThe Plan sets out a long-term programme of action fordelivering sustainable communities in both urban andrural areas. It aims to tackle housing supply issues inthe South East, low demand in other parts of thecountry, and the quality of our public spaces.The Plan includes not just a significant increase inresources and major reforms of housing and planning,but a new approach to how we build and what webuild.This £22 billion programme of action aims to focus theattention and co-ordinate the efforts of all levels ofGovernment and stakeholders in bringing aboutdevelopment that meets the economic, social andenvironmental needs of future generations as well assucceeding now.Building on Success, The Future Strategy for AchievingExcellence in Construction, February 2003Building on the success of Achieving Excellence theOffice of Government Commerce strategy forestablishing a continuing programme to embed bestpractice principles.Identified targets to improve the successful delivery ofconstruction projects and to accelerate project progressat the critical procurement stage.Construction Industry Training Board – Sector SkillsCouncil, September 2003CITB Great Britain working in partnership with theConstruction Industry Council and CITB NorthernIreland became ConstructionSkills, the Sector SkillsCouncil for construction.ConstructionSkills is part of a UK wide network ofSector Skills Councils recognised by and representingthe employers‘ interests.Strategic Forum Integration Toolkit, December 2003Toolkit focuses on the behaviours that need to beadopted, identifies the critical elements that need to beconsidered and offers some tools and techniques thatcan engender the appropriate culture in whichcollaborative working can thrive.Constructing Excellence, 2003Rethinking Construction and Construction Best Practicehave merged to form Constructing Excellence aiming todeliver individual, corporate and industry excellence inconstruction.Its vision is for the UK construction industry to realisemaximum value to all clients, end-users andstakeholders and exceed their expectation through theconsistent delivery of world-class products and services.22 Constructing ExcellenceDemonstrating Excellence – An Evolution of the Programme of Demonstrations

Appendix 2: Corresponding ToolkitsEnvironmental Performance Environmental Assessment Method (BREAM) Project Appraisal Routine (SPeAR) Quality Forum Integration for People Performance Indicator‘ ■ Best Practice ■ Productivity 23

Appendix 3: Previous Demonstration ReportsCostain, Building Awareness, The Educational Supply Chain, April, Investing for the Future, April Woodrow, Supply Chain Partnering, a case study demonstrating the why, what and how of strategic partneringin the supply chain, April Challenge, Partnering in Practice, a case study demonstrating the why, what and how of partnering,April Success through Rethinking Construction, Rethinking Construction Demonstrations Report, July of Sustainability, May for People Case Studies, October Housing Forum Demonstration Project Report: The Challenges Ahead, February Why, What and How of partnering the supply chain, Waterloo Air Management, November Innovation, October Housing Forum Demonstration Project Report: Emerging Issues and Lessons, May Better Business, Vision Shared: The Movement for Innovation Second Anniversary Report, November Housing Forum Demonstration Project Report: Improving through Measurement, October Constructing ExcellenceDemonstrating Excellence – An Evolution of the Programme of Demonstrations

Innovation ■ Best Practice ■ Productivity 25

Constructing Excellence25 Buckingham Palace RoadLondonSW1W 0PPT 020 7592 1100E EastDesigned by Lillington Green 0118 9272474North WestNorthern IrelandSouth WestWalesYorkshire & HumberEast MidlandsWest MidlandsEast of EnglandLondonSouth EastGreater London Authority Headquarters images courtesy of Adam Hinton and Hayley MaddenCE-LG-O604-v.1Innovation ■ Best ■ Best Practice ■ Productivity■

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