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Supply chain early involvement is essential for getting value in infrastructure

Following a number of years where the Olympics has supported construction through the downturn, the past 12-24 months have seen a notable drop in the project pipeline.

Coupled with the extreme weather that has damaged our ageing infrastructure and highlighted a need for greater investment, it is clear that spending has to increase if we are to maintain the core skills needed to deliver cost savings and innovation in the UK.

“In some cases we don’t need money; we just need to remove the project blocks and delays”

From a practical point-of-view, we need a two-tier approach to infrastructure spending: a cut in red tape and planning for large-scale projects to get them from design to delivery, and a release of funding for shovel-ready maintenance work to ensure cashflow through the sector. 

If we can get middle market/medium-sized works under way quickly, we can create jobs in the short and long term, helping to boost productivity. In some cases we don’t need money; we just need to remove the project blocks and delays.

If we can speed up planning, work together as an industry to improve procurement and build developer confidence, we can also unlock finance. This will in turn help generate the revenue needed to protect the talent pool and keep companies in business.

Restricted workload preventing early collaboration

Until the tap is well and truly turned on, the unsettled nature of workflow means there are fewer instances where the supply chain is engaged earlier in the design phase.

This has a detrimental impact on cost reduction and efficiency. It is far more difficult to create innovative solutions in very tight timeframes, in comparison to what can be achieved with early engagement-led projects.

When it comes to larger schemes, this early involvement can be particularly tricky for the supply chain, as the primary contractors have already secured the funding and contracts, so there is less of a risk in the design phase for them.

Typically as a supply chain we only get paid for the end result of supplying equipment, not at contract stage. This places much more risk on the front-end design work that is needed to take cost out at the early stages.

“There has to be a better way to work together as an industry in the longer term, with early involvement at the heart of the process”

The most successful projects from a cost and innovation perspective are those that use the supply chain skills base at conception stage. Two good examples of this are the Olympics Aquatics Centre roof and more recently the new Walton-on-Thames bridge.

Here early involvement with the supply chain helped to deliver innovation through modularisation of temporary works, cutting costs and speeding up project delivery. In this case the outline designs and solutions were then passed through to the subcontractor, helping them reduce their risk and therefore the cost of the scheme.

So for larger infrastructure projects, there has to be a better way to work together as an industry in the longer term, with early involvement at the heart of the process.

Therefore there has to be a greater level of understanding and funding to help to retain the skillsets needed. It is always difficult to justify investment in staff during a downturn, especially if you are having to design solutions that can then be taken out to a tender ‘free for all’, which doesn’t recognise the value already put in by the supplier.

But we have to look at the bigger supply chain involvement issue and, for larger projects, learn from successes such as the Olympics.

Roger Bafico is UK commercial director for formwork and falsework specialists at RMD Kwikform

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