If greater efficiencies are to be achieved in construction delivery, the early engagement of the supply chain is critical.
It is rather strange that the supply chain, which delivers the bulk of the value on construction projects, has no involvement in the early key decisions affecting what is delivered.
M&E systems alone can be as much as 50 per cent of the value of hospital projects or as much as 40 per cent in the case of schools.
In 2005 the National Audit Office predicted annual savings of £2.6bn if the public sector embraced collaborative working including early supply chain engagement.
While it is not always easy to quantify exactly the savings achieved through early supply chain engagement, there is emerging evidence that cost savings are being achieved.
For example, the Designed for Life hospital frameworks in Wales have data on the extent to which early supply chain engagement has helped to shorten programme times – which, in turn, cuts costs.
Early involvement enables the M&E and other key engineering trades to factor in their capabilities – such as faster construction techniques including offsite manufacturing – into the design process.
“Even where cost savings are not demonstrated, early supply chain engagement is more likely to help in achieving delivery within time and on budget”
In this way the design can represent the most optimum solutions that best meet clients’ success criteria.
Even where cost savings are not demonstrated, early supply chain engagement is more likely to help in achieving delivery within time and on budget.
You invariably achieve better value for money if much of the waste generated by variations and extras (due to problems in implementing the design) is removed.
The BIM factor
The advent of BIM is likely to drive the need for early M&E engagement. From the outset of the modelling process there will be a need to obtain input from M&E contractors to inform the model.
But progress in this direction is very much dependent upon a collaborative common data platform where information is accessed and shared among the firms involved. This, after all, is the essence of Level 2 BIM.
“The fault lies in the fact that traditional procurement processes do not allow for collaborative working”
Most M&E contractors end up checking and redesigning what they’ve inherited from consultants. Contractors are often not aware of the calculations that have underpinned the design.
This, in turn, generates more cost. But this is not to point the finger of blame at consultants, which are often not given sufficient time (or paid enough) to do what’s necessary.
The fault lies in the fact that traditional procurement processes do not allow for collaborative working.
Impact of disorganisation
Furthermore, late appointment of M&E firms results in co-ordination issues.
Contractors often struggle with the existing arrangements for the sequencing of work when endeavouring to install the services. This also severely impacts upon productivity.
This was all summed up in a report published last year by EC Harris for the government, which stated that “…aspects of the supply chain are not fully aligned to set and maintain a trajectory towards higher performance and low-cost delivery”.
This is putting it mildly.
Early M&E involvement can be best achieved through establishing integrated project teams. SEC Group has been resourcing developmental work on integrated project insurance.
IPI will help give cohesion to integrated teams, since the policy underwrites the cost plan agreed by the team. The team buys into the design solutions and the risk management process.
Projects piloting IPI are already under way under the government’s construction strategy and guidance on IPI is now available on the Cabinet Office’s website.
Rudi Klein is CEO at the Specialist Engineering Contractors’ Group