What is Best Practice?
Best practices is defined as ‘the policy, systems and procedures that, at any given time, are generally regarded by peers as the practice that delivers optimal outcome, such that they are worthy of adoption’.
Best Practice is the knowledge that underpins examples of excellence. We can take this knowledge, share it and implement it throughout the construction industry. Over the last 10 years there has been a dramatic change in the way construction activity is being undertaken. This is not only in the form of new technology, but also into way that construction projects are procured and managed. This new thinking has been very successfully applied in other industries throughout the world.
Why is it important
The construction sector is one of the largest and most important in the economy, employing over 7% of the workforce. The built environment represents a national investment valued at over $300 billion. The sector contributes 4.5% to GDP and puts in place added value assets worth over 12.5% of GDP in 2005. In the year
A study by BERL shown that a 10% efficiency gain in this sector results in a 1% increase in GDP
Key Business Practices
- Risk Management
- Value Management
- Sustainable Construction
- Supply Chain Management
- Whole Life Costing
- Health and Safety
- Lean Construction
Procurement is the process of establishing the most appropriate method of managing the construction project and selecting the best team to design, deliver and sometimes operate the required facility. Lowest price tendering and lump sum contracts are giving way to better forms of selection and contract arrangements.
Modern procurement methods emphasise the need to select those companies that can work effectively in a collaborative relationship and who understand and practice the principles of “Partnering”. New forms of contractual arrangements seek to get all key parties to work together as early as possible to ensure the effective delivery of a project.
Partnering is a management system that is based on a collaborative approach to working. It is therefore a very different style of working compared to the traditional adversarial approach that has been common in the construction industry for many years.
It has been demonstrated on numerous partnering projects that by working collaboratively it is possible to achieve far greater value for money for the client, higher profits for the companies involved, improved quality and more predictability of project completion.
A partnering project has the following characteristics:
- an agreed set of mutual objectives
- work undertaken in a spirit of trust and co-operation
- an agreed problem resolution procedure
- open book pricing
- a commitment to continuous improvement.
A risk register is a key planning tool. The register should be started at the inception of a project and actively used through to project completion. It can then be used to assess the way that risk on the project was managed so that lessons can be applied to other projects.
As well as identifying and assessing risks, the register is also used to assign appropriate actions for project team members against each risk item. The risks and associated actions should be reviewed on a regular basis throughout the pre-contract and construction phase.
It is important that financial allowance is made for all residual risk items. This ensures that it does not get ignored. Instead a decision can be taken as to the best approach in reducing the cost of this item. This could involve paying for more detailed investigation work to be undertaken and so providing better information on which the respective elements of work can be costed.
This is a method to identify the best way of meeting a client’s business needs taking into account time, cost, quality and risk constraints. The value management process involves collaboration with the team responsible for design and delivering the project, and ideally includes end-users and other stakeholders.
The first step is to clearly identify value for the client in terms of need, business benefits and priorities. Next will be the identification and evaluation of options – this forms part of the value engineering process. Selected options will then be assessed in terms of their cost, risk and extent to which they contribute to satisfying the client’s business needs.
All processes and components suggested for the project would be critically appraised to determine whether better value alternatives or solutions are available.
This process represents a systematic approach to generating and evaluating options to satisfy client requirements. It is carried out throughout the life of the project and is undertaken in parallel with the risk management process. It often features a value management workshop close to the beginning of the process once the principal parties for the project have been identified.
On completion of the project the value management process should be appraised to review how successful it was in ensuring value for the client and the other stakeholders.
Sustainable construction cohesively addresses the triple bottom line – the social, economic and environmental performance of the industry. Areas for action include:
- being more profitable and competitive. It is recognized that businesses need higher profits to intelligently invest in its people, products and processes to improve their competitiveness.
- delivering buildings and structures that provide greater satisfaction, well-being and added value to customers and users.
- respecting and fairly treating employees and the wider community. This includes improving health and safety, enhancing site and welfare conditions, and avoiding noise and dirt which would inconvenience local residents.
- enhancing and protecting the natural environment, including protecting habitats, trees, waterways and other natural features.
- minimising consumption of natural resources and energy during the construction phase and throughout the life of the facility. The buildings should be energy efficient and utilise energy from renewable resources by specifying recycled materials and renewable energy sources and considering the buildings’ future use.
- reducing waste and avoiding pollution during the construction process. 70% of landfill is reportedly generated through construction activity.
Benchmarking is a method of improving performance in a systematic and logical way, by measuring and comparing your performance against others, and then using lessons learned from the best to make targeted improvements. It means knowing the answers to the following questions “Who performs better?”, “Why are they better?”, “What actions do we need to take in order to improve our performance?”.
Benchmarking focuses a company’s improvement efforts on its ‘success-critical’ issues. It ensures that improvement targets are based on what has actually been achieved by others.
For organisations in the public sector, benchmarking provides quantifiable assurance that ‘Best Value’ is being achieved.
The national framework of Key Performance Indicators provide the basis for easy comparison:
- All Construction – client satisfaction, Time, Cost, Quality, Safety, Productivity, Profitability
- Respect for People
- Construction Consultants
- M & E Contractors
- Construction Products Industry
Supply Chain Management
Supply chain management is a relatively new term in the construction industry. It involves integrating the operations of all organizations involved with the delivery of a particular product or service. This extends from the primary producer all the way to the end-user.
In construction this will include the primary material suppliers, component suppliers, manufacturers, distributors and intermediaries, installers, trade contractors, lead contractors, designers and the client organisation.
Whole Life Costing
This is a method used to measure the costs of ownership of a building. It takes into account the initial capital cost of creating the building plus the cost of maintaining and servicing the building over its whole life.
The reason why Whole Life Costing has become such an important issue is the recognition that the cost of maintaining the building often far outweighs the initial capital cost. Studies have shown that for every £100 of capital cost there is £500 operational expenditure over the life of the building.
Health & Safety
There are two key issues with regard to health and safety in the construction industry. The first is respecting people’s rights to be protected against risks that affect their safety and long-term health. The second is that construction sites that are effectively planned and managed are more productive and profitable as well as being safe.
“Lean” is an approach to managing production activity. It first focuses on understanding what value means for the client and then seeks to systematically reduce or remove any processes that add cost but do not add value.
The five principles of Lean
- specify value from the customer’s perspective
- identify and integrate the processes that deliver value
- make value flow by eliminating bottlenecks and disruption
- produce only what is wanted when it is wanted
- pursue perfection through continuous improvement