Value, not price
This is my second blog. The first was written less than 24 hours ago and read by two people: my wife and my SM adviser who suggested I write a blog in the first place. The idea was to write one and see how I get on and develop some plan for the next few blogs. All very sensible stuff, so how come I’m writing again so soon?
Well the power of social media came into play for me yesterday. Paul Weston keeps telling me “you’ve got to connect to the right people, you should join Be2camp“. He tweeted me again yesterday to ask if was going to the Be2camp event that night and here I am blogging about it.
The star attraction was Don Ward, CEO of Constructing Excellence who presented on his organisation’s report ‘Never Waste a Good Crisis’, published in Oct’09.
It’s a concise document that in part reports on the progress ten years after the Egan Report, ‘Rethinking Construction‘. It looks at the evidence so far and highlights the blockers to further progress. Don talked about some of these issues and focused on a couple, namely value not price and sustainability.
The value not price issue generated a lively Q&A session not least because we all understand the arguments for value, but the industry’s marketplace is based on lowest price. And even more so in the current econmic climate with the issue of sub-economic/suicidal bidding. This business and economic model adopted by the industry is one of the 4 blockers described in the report, but it is unclear how we change? See Building Magazine’s Comment on the report for a different (more insightful) perspective.
Don was very clear that we need to work together, to adopt collaborative ways of working that are based on an economic model whereby a target cost is set for the project and the team focus, amongst other things on reducing the waste / unnecessary cost. It’s evident to me that there is no transparency over what this ‘waste / unnecessary cost’ is and if you can’t see it, it makes it very difficult to start reducing it. But this is for another blog!
The Q&A debate queried how the industry can make these savings and reductions and I refer to the example of the reduction of dead space within a ceiling void. I was referring to Brydon Wood who have used BIM to make significant savings. One such saving resulted from the redesign of the ceiling void for a 3-storey hospital to integrate the services more effectively and minimise the dead-space. The net result is a reduction per floor of approxiately 500mm, meaning a saving overall of 1.5m. You can quickly see how this can demonstrate a savings of cost and carbon alike in the reduction of structure, cladding and all components that are affected by the height of the building.
NOTE: Be2Camp Events – Brydon Wood presenting at CIRIA on 12 May 2011.
Don referred to the importance of the construction industry and that if you spend on £1 in the industry this generates £2.84 GDP – see Building’s Charter284 for a better explanation.
Another key aspect of Don’s presentation was on the environment and sustainability. He referred to the report written by Paul Morrell on how the industry can deliver Low Cabon Construction. And for me this is where the Q&A session generated a fascinating debate and indicates I’ve still much to learn about sustainability – which is what I was alluding to in my first blog! As a little aside, getting into this blogging malarky, I had drafted my second blog on the train going into London last night, but that will have to wait and become the third blog – maybe tomorrow!
Can we achieve sustainability with the current business model?
Possibly, but unlikely. And as with the debate on value, the argument has to be broadened beyond an economic focus. Everything I’ve read about sustainability focuses on the need to consider the triple bottom line of economics, but also social and environment. The ever increasing cost of fuel – (by the way Mr Osborne, thanks for reducing the tax on my diesel by a penny, it’s only gone up 7p since the budget and seems to go up a penny a week!) Sorry focus, the ever increasing cost of fuel will force this issue, but when?
SM adviser advice: Be concise, keep your blogs brief and to the point, so I’ve probably written too much! so for now thanks for reading and let’s see what happens in the future!