The project to build the seventh baggage reclaim extension at Heathrow Terminal 4 was completed for £225 000 less than the original cost plan. When agreed client variations are added, this represents a saving of 9.7%. The project was also completed in 30 weeks – six weeks ahead of schedule – and with only 41 agreed defects at handover.

Construction manager Mace puts the savings down to the use of Activity Based Planning. This is a system for planning and monitoring the work of subcontractors by drawing up detailed plans for each trade on a weekly basis.

At the beginning of each week, trade contractors' foremen fill out a proforma detailing the work they plan to complete during the week. The detailed plan includes a breakdown of the activities to be completed, an estimate of when the work will take place, who will be working on each task and what preparatory work is needed. This is discussed with the construction manager at the beginning of the week and, at the end, the contractor notes down whether it has managed to meet the targets. If not, a reason for the delay is entered. This performance is then discussed with the construction manager.

For instance, in the week beginning 16 November 1998, contractor Simons planned to fit all the laminated panels to the toilets. It completed only 80% of this task by the end of the week because materials were late. This close monitoring helped Mace understand Simons' plight and reschedule work on and around the toilets for the next week.

A five-week look-ahead plan is also updated in the weekly meeting. This is less detailed than the weekly plan and is intended to help the construction manager co-ordinate trade contractors' work. The results of the weekly plan are fed into the five-week plan for the trade contractor, and the five-week plans of other firms that may be affected.

Nigel Cole, Mace project manager at Terminal 4, says that one big advantage of the system is that the trade contractors start talking to each other more often and in greater detail – especially before the weekly look-ahead meetings. He adds: "It's a great way of extracting the expertise contained in their minds on to paper."

Mace also found the method useful for heading off claims. Cole explains that one contractor was having some trouble on the contract and started to prepare a claim. But, when the potential claim was raised with Mace, the construction manager was able to refer back to the weekly look-ahead sheets and show that the problems were caused by the contractor rather than the consultants.

The cost of implementing the process is not high, claims Mace. Cole says that developing and implementing Activity Based Planning on six projects has cost £600 a month in management time, compared with £1000 a week spent implementing Calibre – the Building Research Establishment's monitoring system – on BAA's Genesis car park project.

BAA is impressed with Activity Based Planning, says Cole, and the client expects the system to be used on all projects at Heathrow costing between £2m and £12m.

Mace plans to extend the system's use to larger projects and has used it on the 500 000 m² headquarters scheme it is managing for Merrill Lynch.

Five key benefits of Activity Based Planning

  • Activities are planned in greater detail. Forces trade contractor to think in detail about resources and timing of work
  • Prerequisite activities are scheduled. Requires trade contractor to interact with one another to ensure preparatory work is completed
  • Helps with co-ordination of materials deliveries and storage
  • Contractor performance is analysed in greater detail. Helps identify areas where biggest improvements can be made and allows quick reaction to problems
  • Detailed records are kept. Documents assist with quality assessment and with settling claims