During the 1990s the Latham and Egan reports ÐÇ¿Õ´«Ã½ the team and Rethinking construction identified the inefficiencies of the adversarial construction industry. In particular, Rethinking construction set the challenge for change. In taking up that challenge new business relationships have been developed adopting partnering principles and creating alliances. Partnering promotes a business relationship based on trust, openness and co-operation. At least that is the theory. The ECA conference examined the reality.
The scene was set by a video message from Christopher Leslie MP, parliamentary under secretary of state, Office of the Deputy Prime Minister. He said: "There are developments taking place within the electrical contracting industry, many of which demonstrate effective partnership. Partnership, whether between government and industry, between industry sectors or between the members of a project team, is the way forward for all concerned. This has been underlined by the progress made on the proposals to include electrical safety into the ÐÇ¿Õ´«Ã½ Regulations and in the collaborative industry efforts to develop the Electrotechnical Assessment Scheme, which would form a necessary basis for the technical competence standard in a new Part P."
The newly inaugurated ECA president, Charles McKinnon, chaired the first session. He underlined the fact that partnering is not 'rocket science' and in fact many firms are already doing it in one form or another. However, its effectiveness cannot be taken for granted. He asked: "Is partnering working? What lessons can be learnt? Do we know what the success factors are and what does a successful partnership look like?" A lot of questions, which, during the course of the conference, were duly answered.
David Pollock, ECA director, explained how the principle of co-operation extended beyond project teams. "A number of collaborative achievements demonstrates the importance of co-operation between industry institutions in the electrical and mechanical sectors," said Pollock. "These include the development of the Electrotechnical Assessment Scheme; SummitSkills, the sector skills council that is in development, embracing electrical, mechanical and plumbing; the Electrical and Mechanical Major Projects Agreement and the Specialist Engineering Contractors' Group, which in the past year has developed to be a powerful lobbying voice." Pollock emphasised his conviction that the trade bodies must work closer together if they are to provide best value to their members.
The project must be right first time. Partnering makes this happen
Dennis Bate, Lend Lease Health Care
The client's perspective of partnering was examined by Dennis Bate, chief executive officer with Lend Lease Health Care, and Grahame Ludlow, managing director of AMEC ÐÇ¿Õ´«Ã½ and Facilities Services. Both firmly believed in the benefits of partnership for positive long-term business and individual project benefits. They have found that the approach has helped to eliminate the damaging adversarial culture and so improve construction efficiency. "To involve all concerned from design to delivery is essential if the right product is to be achieved," said Bate. "For the client, PFI projects make this approach especially important. Here you have 30-year life cycle cost factors and responsibilities, plus of course a reputation risk. Therefore, the project must be right first time. Partnering makes this happen." His view was echoed by Ludlow, whose presentation to the conference underlined the potential benefits. "Partnering is a very practical philosophy that allows all to benefit. It encourages greater trust, involvement and continuous improvement," said Ludlow. He warned that a critical factor to the success of long term relationships is continuous improvement where "you do for 90p what you did for £1 last year". Partnering allows the increased efficiency necessary for this to happen.
The employee perspective of the benefits of partnering was succinctly put by Paul Corby, national officer of Amicus-AEEU. He highlighted the 'win-win' benefits to be gained from working together as demonstrated by the development of the Major Projects Agreement (MPA).
The MPA has been designed to change the culture of large m&e projects and so improve performance and productivity, enhance industrial relations stability and introduce integrated teamworking. "The MPA is a major step forward for the m&e industry and underlines the benefits of everyone working together for a common goal. For the employee we now have a 21st Century employment framework that provides enhanced earnings and benefits. Client and contractors, meanwhile, will benefit from improved productivity and performance. The lessons and principles learnt in the MPA are just as valid for small and medium-sized firms as for the majors."
The supply chain is crucial to the success of partnering. As Mike Peasland, managing director of Balfour Kilpatrick, explained, for the supply chain to work it must have the full commitment of all concerned: "All too often the potential benefits of the supply chain are lost due to the customer not really being engaged and contractors using it as a marketing tool only. To these are added unrealistic framework agreements, inappropriate risk transfers and no commitment to the process." Despite these potential pitfalls, Peasland believes that "partnering the supply chain" is the way forward, with PFI and PPP projects accelerating the change in construction culture.
What does a successful partnership look like?
Charles McKinnon, ECA president
"Partnering, quite simply, is a better way of doing business," stated David Harrison of Harrison Management Consulting. It is the way forward away from high abortive tender costs, adversarial relationships, high number of claims, payment problems, fragmented processes and low productivity. For the contractor, benefits include higher profit, repeat business, good working relationships and good publicity.
The significant cost benefits of partnering were underlined by Viv Sullivan, business development director of Crestahead. "Partnering can avoid the £750 million currently wasted on litigation every year in the UK construction industry. As for specific contracts, partnering has the potential to reduce costs by 30%."
The reality of partnering was demonstrated by Geoffrey Hall, managing director of Abacus Lighting. He used his company's long term partnering relationship with Tesco as an example of what is involved in a successful arrangement and what are the rewards. "The successful management of the relationship is essentially down to open communications, established and agreed working practices and a dedicated account manager who provides a one-to-one relationship and a good understanding of both partners' requirements," explained Hall. "The rewards go beyond financial terms to include the learning experience gained and its positive effect on the company." These benefits, Hall warned, are long term. You must see beyond the short and medium term and their high resource requirements.
Nigel Power, president of the Electrical Distributors Association then took the stage to put the distributor's role in partnering agreements. The advantages include assured stock control, product training sessions and an environment of business stability. However, he warned: "There is a danger that such a stable atmosphere can mean that commercial development on a broader front can stagnate."
Lessons learnt from the MPA agreement are just as valid for smaller firms
Paul Corby, Amicus-AEEU
Gary Turner, national accounts director of Whitecroft Lighting, explained how his company had changed its business structure in order to embrace partnering. As a manufacturer, working closely with customers has meant that they have the confidence and business stability to invest in product improvement. This in turn results in a better and lower cost product.
If the myriad of benefits of partnering and alliancing are to be realised then, warned Trevor Hursthouse, chairman of the Specialist Engineering Contractors' Group and managing director of Goodmarriott & Hursthouse, some fundamental principles must be adhered to. "Partnering is a win-win approach for all concerned only if all accept and abide by the fundamental principles of trust, transparency and honesty. These are prerequisite to the success of partnering," he explained.
All the benefits of partnering that were discussed during the three days of conference are available to all size and type of company. As Charles Lever, head of building services for Taylor Woodrow Construction pointed out: "The benefits of reduced programme, reduced cost, non-adversarial relationships, shared goals, improved quality and project certainty are available to all no matter what the discipline or size of company. You do not have to be a major company to gain from partnering."
David Pollock, in his second presentation, described how some of the future challenges will be met in partnership with the rest of the building services industry. Drawing on the conclusions of the Think 2010 conference held in March, he explored developments including evaluation of projects to include allowance for the cost of their ultimate occupants; cross-disciplinary understanding through training; and the effects of climate change legislation.
You do not have to be a major company to gain from partnering
Charles Lever, Taylor Woodrow Construction
The q&a session raised some further experiences of partnering, for example the need to educate the client, particularly the Government, whose initiatives have failed to be passed down the line.
Delegates felt that consultants need to be more engaged in the process and there was a reminder that there still needs to be a mechanism for action should one party misbehave. No change there.
Few can disagree with the desirable and laudable aims of partnering but will have had little practical information on implementation.
Source
Electrical and Mechanical Contractor
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