Wait not want not

It's not just a theory either. Hill works for Wilson James, a security and logistics company, and when the firm first applied this method on a project called Mid City Place in Holborn, London, there were some impressive results. The project finished 11 weeks early, achieving a build rate of 8,000 sq ft per week compared to industry norms of 5,000 sq ft. Waste was reduced by 35% and a pair of hoists removed from site because the efficiency of the full-time materials handlers meant they weren't needed.

"We know it works"
Since then developer Stanhope (which built Mid City Place with Bovis Lend Lease) has employed this method on all its sites, according to director Andy Butler. Some projects were with Wilson James, others with rival logistics contractor Clipfine. "We've done it often enough now that we know it works. It makes the sites safer, cleaner and better organised."

Convinced? Well, apparently not. "Nobody wants to hear the story," says Hill, general manager for construction logistics. "The industry is steeped in traditional methods. To try and change the way people look at construction logistics is extremely difficult."

That's why Wilson James employed management consultancy Lloydmasters to conduct some research into how much time trade contractors spend on various activities. Using information from five projects Lloydmasters calculated that 2% of the value of a trade contractor's package went on cleaning up, 18% on handling materials, 7% waiting and 73% on construction activity.

That doesn't sound too bad, you might think. Ian Lister, who joined Wilson James from IT and management consultancy as senior manager – special projects three years ago doesn't agree. "Any other industry could not go forward with this level of inefficiency. You have skilled people waiting for 7% of their time. It's madness."

The cost hurdle
Bringing someone in to organise materials deliveries and get it to the workface will reduce considerably, although not totally, the time spent handling and waiting. So the trade contractors should be able to lay more bricks or fix more drylining each

day. And in addition they will need to employ less general labour, say one or two less per trade.

Wilson James says that this system can drastically cut materials wastage because things get less damaged or 'mislaid'. And accidents should fall since trained materials handlers are less likely to injure themselves than labourers who occasionally have to manhandle deliveries.

The firm has some impressive statistics from its work at Heathrow, where it uses a 'consolidation centre' to take all deliveries, moving them onto site a day before they will be needed by whatever trade. For example, they reduced waiting time from 17% to 3%.

This doesn't wash though. "When you talk to the main contractors in London and the surrounding areas, it's written all over their faces," says Hill. "That's BAA. They can do that sort of thing."

The main contractor doesn't like it: Why should I have to pay to do part of the trade contractors' work? The trade contractor doesn't like it: you just want to cut down my workforce and pay me less.

The crunch is this. A 'traditional' logistics package, that is cleaning, welfare, movements, traffic management, and limited materials handling comes in at 2% to 4% of the project value. What Wilson James has calls 'modern logistics' which additionally includes getting all materials to the right work faces at the right time costs 4% to 5%.

Does it really pay back? Absolutely, says Butler, adding that some of the additional cost of the logistics is covered by the trade contractors lowering their price to take into account the fact they need less labourers.

They lower their price? Stanhope works with the same contractors over and over, some for as long as 15 years, says Butler, so there's trust. "They are more willing to make a leap of faith with us than when it's done in a competitive market," he says.

The other point about these ongoing relationships is that they are open book. So Stanhope can see how much a trade contractor has budgeted to spend on labour to move materials. Without that, you can't begin to work out the costs and benefits. "Will you ever get the real figure out of them on what they spend on attendant labour?" asks Butler. "Unlikely."

Of course, as well as getting less money for the package of work, the trade contractors will be shouldering less risk. "The commercial manager will tell you it's suicide but you have to put that to one side," says Butler, who has worked for contractors before moving to Stanhope. "Contractually we leave ourselves wide open. If you are late with an order or mismanage materials who is to blame, but if you only look at the negative, you will never move forward."

So is anyone interested then? Hill says he is talking to "three or four key organisations" who seem up for it.

Best for the big boys?
But those people who roll their eyes at the mention of BAA do have a point. Few of you will be overseeing yearly a budget of £11bn over the next eight years. Wilson James reckons that modern logistics will work on any project of £20m or more. And it is hatching plans to set up logistics centres on the outskirts of cities, serving multiple sites and multiple clients.

Later this year Wilson James will set up a logistics centre to serve Stanhope's £90m refurbishment of Unilever House in central London. It will be based at Greenwich, 12 miles away. The centre will take deliveries of some materials, splitting them down and delivering a mixed load of say drylining, sealant and bricks as and when they are needed.

Wagons containing structural steel or concrete for example will be held at the centre until site can receive them. At the moment, says Lister, lorries are often forced to circle the site until there's a gap for their delivery.

Wilson James is presenting the research's findings and the potential financial benefits to contractors under the heading of 'Compelling Cost Argument'.

The main challenge? The doubters will need to overhaul so much more than their attitude to logistics to make it work.