Technology, modernisation and skills are vast challenges facing the industry today - but productivity is a problem too
Ask a CEO in construction to name the biggest challenges facing the industry. Technology and modernisation? Skills? Margins? And just possibly Brexit? All are likely to make the list.
But would productivity? It’s an issue that encompasses all of these challenges and has long frustrated policymakers and industry leaders. The shortcomings of the construction sector are well known, but so too is the fact that productivity is too great a problem for individual organisations or governments to address alone. As always, collective action is needed but difficult to achieve.
However, a new generation of UK infrastructure programmes could provide the momentum for change. Programmes and projects of greater scale, complexity and public profile – Heathrow Expansion, HS2, HPC, Network Rail’s CP6 and Highways England’s RIS 2 – offer opportunities to make collective efforts towards realising greater productivity.
To do this, we must get these programmes set up in the right way. The early stages are critical and I believe that there are five key steps that these programmes should follow as part of a plan to get them – and our industry – set up for success.
Programmes and projects of greater scale, complexity and public profile offer opportunities to make collective efforts towards realising greater productivity
First, the client should entrench a high-performance environment and culture into programme operating models. This is not a lofty, intangible goal – it means embedding a performance baseline into delivery. Clients must be clear and consistent with the external market so that the supply chain is aware of the value they must bring to a major programme and how they need to invest and adapt their own business models.
Second, we should be technology enabled and data obsessed. Again, it’s important to get this right early – programmes require a common data environment that connects and spans the supply chain, with technology used to simplify and speed up communication and decision making. Focusing on the lead performance indicators enables proactive investment and intervention to support high performance.
Third, it is vital to take a proactive, informed approach to understanding the supply chain’s capability and capacity, and making required investments to align and capture innovation. Clients need to show leadership through progressive procurement and management models that enable high performance. These are unlikely to be formed overnight and, therefore, they must look to build complementary strategies that seek to invest collectively in the market. This is a key theme of the ICE’s Project 13, which is looking to create a ‘community’ of infrastructure owners and suppliers. Clients must be informed of the supply chain’s capability but also prepared to develop industrial strategies that may shape the market in a way that will provide best value.
Heathrow is already taking a hands-on approach, in particular through its plan for regional logistics hub strategy in areas across the UK with a strong SME and manufacturing skills base.
Fourth, we need to focus on flawless execution and speed up the transition to a manufacturing mentality. Offsite manufacture is frequently discussed as a key means of addressing the productivity conundrum and we need to push ahead with the adoption of repeatable, component-led design in infrastructure.
The manufacturing mentality is about more than embracing technology – it will lead to a different industry structure providing new opportunities for supply chain partners who embrace lean principles, understand what true value means, and can identify the ways in which the industry can work together to reach it.
We need to focus on flawless execution and speed up the transition to a manufacturing mentality
Fifth – and finally – we must out-perform programme baselines. We need to go ‘above and beyond’ as standard. That’s a significant cultural and behavioural shift for a construction industry that has a habit of accepting mediocre performance, often because the data hasn’t been assembled to prove it. Clients need to be informed and have the ability to set challenging but deliverable baselines. They need to measure performance over a sustained period that is likely to be way beyond the lifecycle of a single project. Such change requires clear vision. Crossrail’s mantra – “are we safe? are we on time? are we on budget? are we world class?” – summed up expectations perfectly and really resonated.
The importance of infrastructure in driving UK productivity as a whole is widely acknowledged. It’s a key objective of programmes from Crossrail and HS2 to potential Northern Powerhouse Rail. But we should also look towards the next phase of infrastructure investment to lead the way on creating a sustainable step change in productivity within the construction industry. By following the five steps above, we can harness the scale and long-term commitment that major programmes provide. In doing so, we can drive better working practices, advance technology, and develop new thinking and operating models which can may forge a truly world class sector.