Thinking time

BSJ invited a group of construction experts to share their thoughts on where the industry is now in terms of working together, whether Egan's vision of integrated teams can be achieved, and how these teams could be made to work effectively, perhaps with better use of IT.

The panel is a cross-section of the industry: manufacturer, consultant, contractor, client. They are typical in what they do, and largely in how they operate. However, it has to be said that the very fact they took part in such an exercise probably indicates that they're a pretty forward-looking bunch. Nevertheless, the experiences they have of how the industry works now, and how they would like it to work in future are probably common to many of those working in construction today.

One of the key issues for Egan is waste of resources and cash in the construction process. Our panel felt that one element which needs more emphasis is time – the ultimate scarce resource.

Crispin Matson, managing director of engineering consultancy Rybka says: "We are talking a lot about waste of materials and money, but the other dimension of waste is time. That's more valuable than anything else."

Peter Knight, head of procurement for contractor Haden Young, comments: "The biggest cost is time, every time. It's the risk of overrun and the potential for damages which makes it the biggest risk."

One of the biggest negative impacts on time management of projects is change – usually instigated by clients. Robert Deatker, project executive of building services for Canary Wharf Group says: "If a project goes quickly and efficiently, then that's the best project from our point of view, and they are cost-effective. Looking back at our projects, those that went quickly, and were efficient were the most cost effective. My main concern is change – if we can limit change, then they stand out as our best projects."

Deatker is clear about what makes a good, timely project: "The consultants' design is truly coordinated; the architect has driven the design; men and materials are getting to site efficiently; logistics work efficiently; our management team are experienced with high rise projects and understand the issues. And there are no changes. They are the flagship projects and they do save significant percentages."

Manufacturers also feel the negative effects of changes to design. Patrick Caiger-Smith, managing director of Armstrong Pumps, explains that many of his products are now manufactured overseas, as this enables the company to offer customers more competitive pricing. This does however have its downside. "By manufacturing abroad we are saving on costs, but there is a twelve week supply chain for goods coming in. But this means that changes made will result in a long wait for replacement products."

Chris Monson of controls specialist Trend agrees: "We are moving towards global platforms in the building management systems market, effectively allowing you to build sub-assemblies anywhere in the world. There are only a few components associated with our products, but you have to build into your design the fact that these have to be sourced from all over the world."

What could be done to cut down on the problems it causes?

Manufacturers feel that they are isolated from what's happening on a project, and that they are only called upon at the last minute, leaving them no time to plan ahead. "We would like greater visibility of projects as they are coming up. If we have visibility of a job we are working on, and we know what the cost expectations are, we can source parts in good time so we can build to a deadline – we're not just responding to the contractor on site. But if we only have a 30% chance of knowing what's coming up there is no way we can commit to buying in materials," says Caiger-Smith.

Eric Ostrowski, knowledge development manager for quantity surveyor EC Harris says that it's lack of understanding on the client side that leads to time wasting: "The concept of visibility cuts the other way. It is not always visible to the client what the effects are of decisions to go with cheaper products, or to change his mind. If it was made clearer to the client what the effect of such decisions might be he may say, 'Well I'm not that precious about time, and would rather save money sourcing products from abroad'. Or he might decide that time is the driver and he is prepared to pay for that. It is a two-way visibility."

Deatker says that well informed tenants are keen to respond to requests for early decisions: "They realise that this is a building they are going to live in for twenty years. They come from buildings where there may have been problems, due to expansion for instance, because it's the first thing on their agenda. You tell them that they are going to have to make early decisions in order to solve those problems, and they are quite happy to respond to that."

Rybka's Matson adds: "The building process is so long, that often clients really don't know what they want at the end of it. But the point is not how you fight change, but how you accommodate it." While they accept that there are obvious advantages to partnering and integrated teams, most feel that this is some way in the future. Again, the issue of time, as well as money, raises its head.

"If you want to see improvements, you have to invest and this industry is reluctant to invest to change the way it works. A major factor is that you have to take time out to build relationships with suppliers, and it is difficult to do," says Peter Knight.

Creating integrated teams is a core element of Egan's Accelerating Change programme. The most recently published document states that the vision for the construction industry of the future includes: "Integrated teams made up of existing integrated supply chains which once successfully formed are kept together and move from one project to the next taking their experience and a culture of continuous improvement with them."

The elements of experience and continuous improvement strongly imply a method of sharing knowledge, and of storing information gleaned from each project – in order that the integrated team is not reinventing the wheel with each new project. The panel recognise the value of sharing knowledge.

There is a lot of information in the construction industry, and increasing amounts of IT used to manipulate it. For example, manufacturers have software for sizing and selection of product. There are project planning and management programs, qa systems, as well as building controls and bems which link equipment on site. In the middle sits knowledge management which in theory links all those pools of information together allowing the most useful knowledge to flow to those who need it.

Many have heard of knowledge management, but few organisations are exploring its full potential. Unusually for a company in the construction industry, Armstrong Pumps is investing heavily in this area: "We have bought a software company and started a division which concentrates on knowledge management. We are looking at how you draw all the elements of information together, which creates the greatest benefit for the organisation," explains Caiger-Smith.

Eric Ostrowski agrees on the importance of knowledge management: "To me, it's the key. You use knowledge as the glue to hold together the team."

For some, the sharing of information is less dependent on use of IT. "The strategy we're following at the moment is not so much an IT framework, but a personal relationship framework. We let the knowledge come through the relationship and we encourage this with seminars where suppliers meet contractors, and our own people. They can recognise each other as individuals. If there's a problem it is easier to go to the relevant person. We are building relationships so the repeatability goes on to the next project."

Deatker feels that the strength of this method is its informality. If people communicate on a one-to-one basis then they are happier to solve problems together.

Mike Stephens, head of information systems and IT with consultant Roberts & Partners comments: "We have to recognise what can be stored in knowledge management systems, and what can't. As an IT manager, I am the biggest advocate of these kind of forums, rather than video conferencing. Relationships are definitely necessary, and it's one of the things that can't be recorded electronically."

But there are many elements of information which can be usefully stored and accessed electronically. Roberts & Partners has invested in a knowledge sharing system in-house. "There is a scalability issue, and you can't get anything bigger than the construction industry. Trying to bring that together is a big task. We did it because of the information we have internally –islands of knowledge held by people. By linking these, we are giving our people a leg-up on a new project. Unless information is captured you're always starting from behind."

Trend's Chris Monson points out that this method may be useful to individual companies but hasn't spread across the industry: "The difficulty I have is that all this is intra-organisation, it's not putting knowledge into the supply chain. We are no different. We have knowledge management mechanisms, databases and so on. But it is all in my organisation. The benefit doesn't help my clients, and I can't find help from outside that way. Sharing outside the organisation doesn't go on."

Stephens comments that some knowledge needs to be protected: "We have collaborated externally. The information is our product, whether or not you release it to the wider community is a concern. We want to control as much as possible. If we are sharing our knowledge with other organisations, it is through our engineers going out."

Like most people, those in construction do feel that another source of information is not necessarily a good thing, and that sometimes the old ways of doing things are actually more efficient. Peter Knight comments: "We are using Project Online software for the first time on one project and one of the problems with that is that you get all the drawings electronically – even those you don't need! It was easier when they were hard copies packaged up and mailed across because people were more selective in what they sent. Now all these drawings come over on a laptop and it takes so long to go through them."

One idea which is touched on in the Accelerating Change document is a central knowledge bank for construction. This idea was generally greeted by the panel as workable and useful if handled correctly and several felt that it would enable them to work quicker, particularly at the design stage of a project.

Looking to the future, it seems that there is to be no great leap forward into Egan-style construction, but some in construction are looking at new approaches and working towards more efficient ways of working.

Peter Knight says: "My aspiration is to have a pre-constructed supply chain, before we start a project. If it's an airport, we have the airport supply chain; if it's a prison the supply chain is in place. That would mean right price first time so you know you're getting the right price. That's my aspiration."

Ostrowski says he has come close to this on one project which he agrees is a successful approach: "We had a job which had to be completed quickly. We also wanted to keep the risk with the client and the consultant. So we went to market and actually declared that the design package had been closed. Most main contractors went along with it. They all came within 1% of our tender estimate because all the contractors were comfortable that the risk was clear and that there was time to design the project post-tender. It was an open book arrangement, the risk stayed with us and the net result was that time was compressed because the project started sooner."

"The key elements that made that happen were trust, transparency and appropriate allocation of risk to the right party – and a general willingness by everyone to solve problems."

But this kind of approach is still considered unusual, and there's no escaping the fact that UK construction has a long way to go before it becomes the industry that Egan envisions. Patrick Caiger-Smith agrees that the current state of play looks set to last: "We are being driven towards commodity products and price tends to rule the day – that's prime cost not life cycle costing. It's only well informed clients who ask us what the life cycle cost is. There is still high wastage, and we are operating in an old industrial model."

That said, it is clear that the industry is taking Egan's initiatives seriously. While culture change may not be widespread, the industry has realised that change is necessary and possible. Small experiments in new ways of working are happening. Accelerating Change won't create a new construction industry overnight, but Egan has planted the seed.

My aspiration is to have a pre-constructed supply chain, before we start a project

Peter Knight, head of procurement, Haden Young

By linking islands of knowledge in our organisation, we are giving our people a leg-up on a new project.

Michael Stephens, head of IS/IT, Roberts & Partners

The issue is not how you fight change, but rather how you accommodate it

Crispin Matson, managing director, Rybka

If a project goes quickly and efficiently, then that’s the best project from our point of view

Robert Deatker, project executive building services, Canary Wharf Group

We would like greater visibility of projects coming up so we are not simply responding to a contractor on site

Patrick Caiger-Smith, managing director, Armstrong Pumps

Knowledge is the key. You use knowledge as the key to hold together the team

Eric Ostrowski, knowledge management director, EC Harris

You have to build into your design that components are now sourced from all over the world

Chris Monson, Trend