Value drives Better Outcomes
In all sorts of sectors from leisure to law, there is a growing focus on value. The industry has also learnt from this. When we base decisions on value rather than price (and the minuscule margins that come with that approach), we start to solve some of the major problems our industry faces.
Innovation and technology are helping us to deliver greater value. Through technology, we are becoming more productive and more consistent in the quality we deliver. BIM and information portals such as Osborne’s iGO allow all project partners to share consistent information and work towards common goals.
Ultimately, contractors must be recognised and rewarded for the value they bring, above and beyond the delivery of a physical building or asset. After all, we are talking about investing in organisations charged with creating homes, schools, hospitals and essential infrastructure – hardly things we can manage without. We’re changing people’s lives –in a positive way – and our construction contractors, subcontractors and workers are all part of this.
In a value-based culture, contractors and supply chains are engaged early enough to make a meaningful difference. They can enhance project design and outcomes. Their input is valued and they share the risks and rewards of innovating to improve quality and building performance. That is the culture we need to build progressively together.
On one recent project, the early engagement approach delivered additional value of 3-4% of the contract sum – money that was reinvested to improve building performance.
A proactive approach to cost management throughout projects and a rigorous ‘design to cost’ methodology helps turn potential savings into real ones. Additional requirements identified during a live project can then be delivered without inflating the budget. The whole life value calculation extends beyond project delivery. The design to cost methodology allows designs, specifications and energy strategies to evolve in a controlled way. Energy efficiency and CO2 reductions can then be implemented during the live project to reduce running costs.
This, again, is where early supply chain collaboration is crucial. It creates the space to explore and cost alternative solutions using wider expertise. Potential benefits could include achieving better standards for daylighting, acoustic or thermal performance within the project budget and often at lower cost.
Early contractor involvement allows a fabric first approaches to be adopted. We can also explore the most efficient construction methodology to adopt. Different options such as offsite construction and different M&E packages can be evaluated and costed accurately. Savings in time and cost can be significant and delivered alongside improved building performance.
Moving the focus from cost to value is something that instinctively everyone would favour. Through the practical application of early engagement, innovation and ‘design to cost’ it starts to become a reality.