It's a tough life for the Greenwich Millennium Village team: a location next to the maligned Millennium Dome, the attentions of John Prescott, and tough targets for improving construction performance. Thomas Lane finds out how well they are doing
Richard Hodkinson looks nervous as he explains what innovations have been introduced to meet the 10 benchmarks set for the Greenwich Millennium Village. After the very public fight between the village's joint developers and their architect, these have become very political. Hodkinson knows that, as the project's director of innovation, he has got to hit the targets – if he does not, his employer may not get to build the second half of the project.

There are currently 170 finished and occupied apartments on the site next to the Millennium Dome in south-east London, and another 230 are under construction. They form the first stage of a long haul for joint developers Taylor Woodrow and Countryside Properties, who started work on the site in late 1999. By 2005, there will be 1079 flats and 298 houses mixed in with commercial development. But right now, it is crunch time for Hodkinson, because the first set of figures has just been published.

The developers set the benchmarks to reflect John Prescott's vision for the project. The deputy prime minster wanted to fly the flag for the UK as a world leader in sustainable urban development and trailblazing construction techniques. As the government effectively owned the Greenwich Peninsula site through its regeneration agency, English Partnerships, the developers produced benchmarks that reflected the political agenda at the time. They included construction methods that rested heavily on prefabrication, as called for by Sir John Egan, and greater energy efficiency to help meet the Kyoto summit's call for a reduction in the world's carbon dioxide emissions.

Seven construction benchmarks were used on the project. Three cover environmental issues, looking at reducing embodied energy, water and energy consumption. The other four cover time, cost, waste and defects. As the benchmarks were introduced before the government brought in key performance indicators, or KPIs, there are no figures for comparison with industry standards.

Early criticism stemmed from the fact that the village's developers had stepped back from a commitment to hitting the headline targets they had set themselves at the time of the bid. Instead, they have to gradually improve their performance to meet standards that become more stringent as the project progresses, with four milestones en route to completion.

The construction targets
Site operatives are busily at work on the new apartments that adjoin the finished and occupied buildings put up in the first development phase. Here, a partially prefabricated metal-framed cladding system is being installed over the insitu concrete structure, which is a nod in the direction of prefabrication when compared with the site-assembled stick system used on the finished block.

Prefabrication is being employed because it can improve construction performance – although it has proved to be expensive. Initially, the use of modular volumetric units was considered for the construction of whole buildings, which it was estimated would reduce construction time by up to a half, but were found to be too costly and unsuited to buildings where indiviudal apartments vary in layout.

However, prefabricated bathroom pods were found to be more cost effective, and have been used throughout phase one to improve the quality of the finished product.

Finding solutions that improve construction performance without adding to cost is a big challenge – particularly as one of the bars the team has to limbo under is construction cost. Establishing partnerships with suppliers is seen as one way to resolve this dilemma.

The bathroom pods are a case in point. Hodkinson says: "We are in discussion with pod manufacturers and it does seem costs can be reduced. We are now looking European-wide to expand our supplier base and it's beginning to pay off." It is proving cheaper to import the units from the Continent because some European suppliers specialise in making bathroom pods, whereas UK suppliers produce them as part of their general activities.

One reason why the move towards prefabricated cladding may pay off is that getting the building watertight early is vital to speeding up construction time. "We will get the bulk of the 25% improvement [in construction time] from building the exterior envelope quicker, and then getting the internal services resolved quickly," says Hodkinson. Currently, it takes 30 weeks to get the building watertight; Hodkinson reckons that this could be cut to 15 weeks using a metal stick system to build loadbearing internal and external walls, although it will cost 10% more. Getting the building finished and on the market quicker could offset this with a quicker revenue stream.

Hodkinson is particularly upbeat about the partnership formed with cladding supplier Telling, which will supply a panellised cladding solution to replace the current stick-built system. Hodkinson says that if this is combined with the metal stick system for the structure, build time can be further reduced from 15 weeks to 10. Invisible components, for example the cladding backing panels can be standardised across the whole project to save money.

Prefabrication is not the solution to all the construction issues. For example, quality can be improved using prefabrication, as is the case with the bathroom pods, but good site practice is necessary to prevent them being damaged, and to deliver zero defects and to reduce site waste. The team has introduced a system of staged inspections to improve quality and spot defects quickly. These start at the briefing stage and continue until after the unit is occupied. The inspections are carried out at critical stages regardless of whether a subcontractor has finished that phase of work, for example, after first fix to ensure the services are going in properly. "It's quite a challenge, bringing about phased inspections, as it's a new way of working for housing developers," Hodkinson says.

The environmental targets
A combined heat and power system chugs away providing hot water and electricity to the occupied flats. This is contributing a whopping two-thirds towards the target of reducing primary energy by 65%, as waste heat is used for heating hot water and there are minimal electricity distribution losses.

Power and heat will be provided from five or six energy centres. Each incorporates a CHP engine sized to produce the base load hot water requirement for the flats, and will also produce 50% of the electricity needs of the development. The energy centre also incorporates back-up gas boilers to provide winter heat centrally to the apartments and a huge insulated hot water tank to store heat generated by the CHP engine. Each energy centre varies in capacity from 100 to 450 apartments.

Making effective use of "free" solar energy is part of the strategy to meet the primary energy targets and covers several innovation topics. Taking advantage of passive solar gain is one example, glazing is maximised on the south-facing elevations with balconies above the windows providing solar shading in the summer. Renewables are being explored, although not very seriously. Photovoltaics are being installed on one building and a wind turbine will also be tried, which will provide a mere 3 kW of electricity. Clearly Hodkinson does not see this as cost effective, citing a payback period of 120 years for the photovoltaics and 45 for the wind turbine; he says they are being installed for demonstration purposes.

The energy target will be met by more prosaic strategies, such as better heating zone controls and educating the occupiers not to waste energy.

One headline innovation topic that has bitten the dust is the greywater recycling plant.

A site was identified for the plant and detailed negotiations took place with Thames Water. Hodkinson says the decision to pull the plug was made because of capital and life-cycle costs, and for technical and marketing reasons. He admits the target for water consumption may not be achieved: "Our view is that greywater recycling is not viable – we have taken it as far as we can within the constraints of viability." He points out things could change over the lifetime of the project, however, and greywater recycling might become viable further down the line.

Hodkinson says the project team will hit all the other targets; indeed, the figures show that good progress has been made on several fronts. The tall order, though, is incorporating all these improvements and, at the same time, reducing construction costs by 30%. The current savings stand at only 5%, which is within prescribed targets for the first phase, but leaves a big challenge to meet later on in the project.

Some accounting tweaks, called "adjustments", have been incorporated to make this easier. Exceptional innovations have been taken out of the benchmark so that the costs of, say, the renewable energy devices are excluded. Even so, it is not going to be easy. Hodkinson is placing his confidence in future progress, saying: "If we can build quicker with less waste and a right-first-time mentality then, all things being equal, we should be able to reduce costs." He pauses and adds: "All I can say is we are feeling the pain."

Colin Gray, head of construction management and engineering at the University of Reading

My experience of projects in which significant improvements and innovations have been attempted is that it is not until the third time that they are tried that the initial lessons start to be incorporated. This project, in four phases, should expect most of the gains to be achieved from the third phase onwards. The project is very ambitious. There are 57 innovation targets for phase three. One could question whether so many are viable – they may even be counterproductive. The figures show that there have been significant gains in a few areas, such as CO2 production and on-site waste. They also show how difficult it is to maintain momentum over so many targets. What increases the difficulty of improving construction is the nature of the product. This is a mixed-use development, which in itself increases the complexity of the individual buildings. With so much potential variety, the normal approaches to process improvement – simplification, standardisation, repetition and learning – cannot be used to their fullest extent. The project has therefore resorted to buying overseas from the cheapest possible source rather than using the opportunity to help in the development of an indigenous supplier base.

Rodney Howes, chair of the Construction Industry Council’s innovation and research committee

The developments at Millennium Village are a serious attempt to improve the life-cycle performance of new housing when measured against predetermined benchmarks. The concept of encouraging innovation linked to continual improvement by measuring performance against key performance indicators (KPIs) is a valid approach given the complexity and difficulty of the problems to be overcome. To target cost reduction at the same time as improving performance, although very laudable, is extremely difficult to achieve for just one project. Economy of scale is a key driver to reducing cost and without this the team is really up against it. An alternative is to find a range of standard products that can be harmonised into a flexible design, but this tends to have problems with tolerances, fit and the speed of construction. A strong partnering approach involving an integrated supply chain will solve such problems. On the other hand, firms are not going to invest a great many resources without the likelihood of further projects to offset the cost of that investment. The strongest part of the project is the effort to conserve energy consumption by optimising the power heating system and improving thermal insulation, which will also lower running costs. Making use of solar gain is a long-established design philosophy, which unfortunately has not been given as much attention in housebuilding as it should have had been, so it is good that this approach has been taken.

Martyn Jones, lecturer in construction management at the University of the West of England

Little wonder Hodkinson says the developers are “feeling the pain”. Not only is the Greenwich team trying to meet the more conventional construction targets – reducing time, cost and defects – associated with the Latham and Egan agendas, but they are also experimenting with environmentally and socially sound supply-chain management. While much of the construction industry is only just beginning to grapple with supplier integration and involvement based on win–win thinking and mutual competitive advantage, the Greenwich team has gone a number of steps further by weaving social and environmental factors into their supply-chain management – and doing so without the benefit of a systematic means for mapping and analysing the economic, environmental and social impacts along their supply chains. For me, the most important outcome of the project will be a pragmatic and systematic way for supply managers to put into practice environmental and social innovations alongside other improvements to purchasing and supply chain management. It should also move our thinking forward in terms of how to address the difficulty that many aspects of sustainability are matters of public policy, not corporate responsibility. My main concerns relate to the range and scope of the “innovation topics”, the pace of their adoption and implementation, and the limited time for an evaluation of their effectiveness – and, of course, those high expectations of the project whipped up by Mr Prescott.

How to hit a moving target

The team developing the Millennium Village have got a lot to prove. After saying in its bid documents that it would meet a series of stringent technical and environmental tests, it later added the rider … “eventually”. What that means in practice is that the developers, Countryside Properties and Taylor Woodrow, are going to learn on the job. They are going to try out all kinds of innovations in the early phases, then incorporate the ones that work into the later ones. These innovations are called “topics” and spread across all seven of the construction and environmental benchmarks. They are measured by comparing them with certain milestones in the life of the project (see graphs). There were 30 innovation topics for the first milestone, ranging from combined heat and power plants to water-saving taps. Each topic is selected for inclusion on the basis of a cost–benefit evaluation. Twenty-five topics from the first stage have made the grade for subsequent phases. Some of the rejected innovations may reappear on the list of topics for later milestones if their cost comes down, or their performance improves. For example, Hodkinson would like to introduce a panellised roof to speed up construction time. Currently, the system is not economical, but it will be reconsidered at milestone three. As the targets become progressively tougher, the number of topics increases to help meet that target. There are 36 topics for milestone two, and 57 for milestone three – and these are in addition to the topics already incorporated. As a further complication, the team has to decide on which topics to incorporate into later phases when it barely has the data from the early milestones. “This is what the continuous improvement process is really about,” says Hodkinson diplomatically. “It’s a question of marshalling up these topics and making them work. It’s a very pragmatic process, very focused on achieving what we need to achieve.” The line graphs below show the targets that the Greenwich Millennium Village team has to reach at four different points in the lifetime of the project, and how they have done up to now. The row of coloured squares shows current progress, at the 180 units completed and occupied mark. The base line indicates where the next milestones fall.