Productivity Partnership Newsletter July 2012

FEATURE

EYE ON CHRISTCHURCH

The Christchurch rebuild provides the Partnership with the opportunity to learn and share key information on what drives productivity.

The Partnership’s "Christchurch Indicators" project is following a number of rebuild projects to identify useful productivity key performance indicators (KPIs). In conjunction with Constructing Excellence, the University of Auckland and BRANZ, our Evidence Workstream is exploring whether people are choosing new ways of working in Christchurch, given the constraints that exist there, and if these are resulting in any productivity gains. It’s collecting information on a range of KPIs in four key areas: smarter procurement, increased standardisation, skill levels and streamlined regulation. These include such things as delivery time, defect rates, use of prefab components, type of project management and procurement practices. Results will be compared with those from building projects outside Christchurch. This should highlight if Cantabrian approaches could be applied more widely for the benefit of New Zealand’s building and construction sector.

Resource availability

Our involvement with the Christchurch rebuild also extends to the "Canterbury Rebuild Resourcing Project" being led by Evidence Workstream member Suzanne Wilkinson from Auckland University’s School of Engineering. It currently consists of quarterly surveys on the availability of resources for the Canterbury rebuild, and tracking trends evident in the surveys. The latest survey in May mostly confirmed the results of two surveys earlier this year. The researchers report that:

The project will continue for the rest of the year. More information is available at www.recres.org.nz

Procurement planning

The Partnership hopes to make a practical contribution to the rebuild of our garden city by establishing a Christchurch Procurement Programme. This would provide a forward view of upcoming construction projects to enable better planning and resource management, especially for those in the supply chain. Partnership Secretariat Manager Chris Kane is in talks with CERA about how the Programme could be set up to maximise the benefit to Christchurch.

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FEATURE

INTRODUCING GEOBUILD
- AN INTEROPERABLE APPROACH

Smarter use of technology is one of the key levers for raising productivity. The Partnership is providing valuable input to the GeoBuild Strategy which is making real progress towards a paperless building system.

The GeoBuild Strategy aims to create a system-wide, interoperable framework providing shared access to as much as possible of the data-rich information affecting the built environment. The GeoBuild Strategy is comprised of three technology programmes:

Each of these programmes is expected to generate significant benefits in its own right, but ensuring interoperability with each other and future technology affecting the built environment allows even greater benefits to be realised.

"There are absolutely huge benefits if we implement GeoBuild," says Alison Geddes, DBH Deputy Chief Executive Sector Capability, who has been leading the GeoBuild Strategy. "An example is BIM data could be uploaded into consenting systems in a seamless way and, over time, the development of integrated databases will provide ready access to project specifications and product information. It paves the way for a paperless operating model. It’s possible. I’ve seen it working in the UK." Outcomes are likely to be better building quality, reduced rework, improved timeliness, lower construction costs, better supply chain management, fit-for-purpose buildings and a more sustainable built environment.

The project team is currently putting together a high-level paper for the Government’s consideration. "We’ve got a lot of buy-in because people can see the logic, including from our Australian neighbours who can see that this could be a prototype for Australasia", Alison says. She hopes to continue working on GeoBuild following her next career move to Australia in October (see Appointments and farewells).

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GUEST COMMENTARY

VALUE BUILDER – SHANE BREALEY

FOUNDER AND MANAGING DIRECTOR OF NZ STRONG CONSTRUCTION, DIRECTOR OF REGISTERED MASTER BUILDERS FEDERATION AND MEMBER OF BRANZ LEVY ALLOCATION GUIDANCE COMMITTEE AND PRODUCTIVITY PARTNERSHIP RAP STEERING GROUP

Is 20% really there?

20% by 2020, $3 billion saved on $15 billion annually. Let’s do the maths. Assuming a straight line improvement, in 2014 construction will be 5% cheaper, better and faster. By 2016 - 10%. By 2018 - 15%. And by 2020 all construction across New Zealand will be 20% cheaper, better and faster than it is today. Ask 100 people across our industry from quantity surveyors, project managers, contractors, designers, clients and suppliers and 99 of them will probably suggest it would make a good Tui’s advert – 20% by 2020, yeah right!

Ask the same 100 people to recall any project they had just completed and ask if they believe it would be possible to build that same project again for 20% less. Identical – same client, same team, same design, same subcontractors/ suppliers and same site. There would be no waiting for consents or design information, no surprises, no changes, fewer mistakes, planning would be fine-tuned and each project participant would know exactly what was required of them. I believe 95 out of 100 people would say the very same project could be delivered 20% cheaper, better and faster second time around.

I have no doubt the 20% gain is really there. By assimilating this scenario through the quality of teamwork, documentation and planning so that each project runs as smoothly as if it were a project we were building for the second time. The only question is whether we have the boldness to overcome the politics and patch protection? Tinkering with the current industry structure won’t get us the desired 20%.

I believe it will take the formation of integrated project delivery teams that work together repeatedlyand are responsible from concept design to consents, documentation and construction. A proven, high-performing team of professional consultants and constructors will not want to repeat the same mistakes, they won’t delay each other and they won’t have wasted resources man-marking as is the norm in our current fragmented industry.

Let's get on with it

An initiative such as the Productivity Partnership has a shelf life with the pragmatic people in our industry. If it does not get traction very soon with tangible benefits flowing through it will become irrelevant. The industry recession gives us an ideal opportunity to drive home new initiatives now. If we go into boom times again by say 2015/6 and there is little progress we will have missed the chance and by 2020 it will be no better.

Let’s start with at least three simple things for 2012 and earn the confidence of our industry:

1. Electronic consent applications and tracking
2. Consultants able to undertake most inspections in place of Councils
3. Procurement guide released to assist clients to make choices based on best value.

While we have to submit mountains of repetitive paper for building consents, require 14 Council inspections for a simple building and have a dozen builders (11 will lose) bidding on an open tender for a $400,000 Auckland Council project we are stalled. The waste is all around us. Let’s get on with it!

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PEOPLE MOVES

APPOINTMENTS
AND FAREWELLS

The Productivity Partnership welcomes Nigel Bickle and David Kelly as Governance Group members.

Nigel is Acting Deputy Chief Executive (DCE) Building and Housing with MBIE. As an active participant in the two Build Sector Days and the Productivity and Urban Intensification Taskforces, and a former DCE Sector Capability, Nigel brings unparalleled experience to the Group.

David’s appointment recognises a broad range of capabilities. In MBIE he holds the position of Deputy Chief Executive Building Quality, with overall responsibility for matters relating to the Christchurch rebuild. With so much construction activity and many Partnership projects focused on Christchurch, his direct involvement with the Partnership is a great asset.

The Partnership farewells former DBH Chief Executive Katrina Bach who has been a member of the Governance Group since its inception. We recognise Katrina’s vision in getting the Productivity Partnership started and acknowledge her immense contribution since that time. We also farewell and thank Building and Housing DCE Sector Capability Alison Geddes who is moving to Sydney to take up the position of Manager of Development Traffic with Parramatta City Council. Alison was the DCE responsible for establishing the Partnership and its Secretariat and led the development of the GeoBuild Strategy (see Introducing GeoBuild). We wish Katrina and Alison the very best for their future.

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PARTNERSHIP PEOPLE

PETER GOMM

PRODUCTIVITY PARTNERSHIP
GOVERNANCE GROUP MEMBER

"The cost of cheap" is a topic near to Peter Gomm’s heart. He joined the Productivity Partnership from day one because of his desire to refocus New Zealand’s construction sector on value, not cost.

"We absolutely have to move to a value-driven industry," says Peter, "and that starts with the client. The client has to define value so the industry can provide it. Consumers know how to look for value …Why would you want the cheapest house – the upshot of that is evident for everyone to see? The real shift in thinking is not to focus on what it costs today, but the cost for the whole life of the building. That shift changes all the procurement drivers."

"Construction is not a commodity, it’s a bespoke value-driven delivery service," says Peter.

After a lifetime in the construction sector, Peter knows what he is talking about. He trained in England and worked for many years with Trollope and Colls. "City builder by appointment," quipps Peter. "The eminent firm celebrated its bicentenary in 1978 and has since been sold." Peter moved to New Zealand in 1982 and gained international experience on numerous design and construction projects before being appointed Chief Executive of Mainzeal in 2007.

"The global financial crisis means we need to improve past practices for a new world," says Peter. "What is taken as the right thing to do in other parts of the world is not embraced here, for instance, the respective roles of design and construction and the need for people involved in those different roles to work together earlier in a project."

"The value of construction is not widely understood," says Peter. "As an industry, we have a poor reputation and that’s a shame because we can do some fantastic work, given the right entry point." Off-site, Peter is a snow skier and keen traveller who enjoys visiting different places for different experiences. Travel also involves catching up with family in the UK, Hong Kong and Australia. Two of his three children are now working fulltime and the youngest has just completed the first semester at uni. After 20 years of playing rugby he tries to keep some semblance of fitness by going to the gym!

Back at the Partnership Peter is keen to continue his mission to get our construction sector into better shape by building value and highlighting "the cost of cheap".

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