family housing association (wales) ltd collaboratively working with local sme’s

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Family Housing Association (Wales) Ltd Collaboratively Working with Local SME’s

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Page 1: Family Housing Association (Wales) Ltd Collaboratively Working with Local SME’s

Family Housing Association (Wales) Ltd

Collaboratively Working with Local SME’s

Page 2: Family Housing Association (Wales) Ltd Collaboratively Working with Local SME’s

Phil Dennis

Director of Operations

Page 3: Family Housing Association (Wales) Ltd Collaboratively Working with Local SME’s

Family Housing Association (Wales) Ltd

Partnering and Supply Chains

Opportunity to legitimise

Internal collaboration – capital and revenue

Incremental or wholesale change

Leadership

Pain and gain

Moving forward

Page 4: Family Housing Association (Wales) Ltd Collaboratively Working with Local SME’s

Darrin Davies

Head of Property Services

Page 5: Family Housing Association (Wales) Ltd Collaboratively Working with Local SME’s

Historically

We knew what we were doing.

Delivering construction projects competitively.

Partnering with Local SME’s.

Numerous procurement methods from Design & Build to Schedules of

Rates.

Long term relationships with Local SME’s.

Page 6: Family Housing Association (Wales) Ltd Collaboratively Working with Local SME’s

The Motivation to Collaborate

Need to ‘Capture the Best’

Limited number of ‘excellent’ contractors.

The shortfall in skilled and good quality trades operatives.

The increased work resulting from the investment in achieving the

WHQS’s, the related stock transfer potential and the added pressure

that would place on the Association’s ability to secure the services of

Excellent Contractors.

Page 7: Family Housing Association (Wales) Ltd Collaboratively Working with Local SME’s

Challenges and what FHA have done.

Challenges

Open Book Accounting.

The cultural change required by all parties.

Data analysis, and so on.

What we Have done.

The Re-organisation of our Property Services and Development teams.

Developed our ICT systems to cater for the open book accounting and data requirements.

Added to the roles of Officers within other Departments e.g. Finance, to assist with the Open Book Accounting processes.

Page 8: Family Housing Association (Wales) Ltd Collaboratively Working with Local SME’s

Some Pros and Cons

CONS

A huge – and disproportionate – amount of staff time involved in the change process.

The financial cost of the works, consultancy, training and development etc.

The financial costs as listed will be incurred to a greater or lesser degree into the future.

PROS

Secured the services of 10 good quality LOCAL SME’s.

The development of a Steering Group.

The improved knowledge we have gained on the actual costs of construction activities.

The improvements – gained with the assistance of both the Construct Wales and Evolution-IP teams.

Page 9: Family Housing Association (Wales) Ltd Collaboratively Working with Local SME’s

Time Line

Pre July 2004 - FHA demonstrated a thorough approach to partnering its construction processes in both

Maintenance and Development schemes.

July 2004 - WAG Consultation paper on the distribution and delivery of Social Housing Grant.

October 2004 - First Ministers “Making the Connections: Delivering Better Services for Wales”.

January / February 2005 - Selection of Contractors for Hazel Court through and EU Notice. Contractors

selected on quality NOT price.

March 2005 - WAG issue “Developing Partnerships. A new Approach to the Social Housing Grant

Programme Distribution and Delivery”.

April 2005 - FHA met with its then contractors supply chain to explain the proposed changes to its

construction services procurement.

July 2005 - FHA issue its EU Notice.

Sept – Dec 2005 - Selection process for contractors based upon quality NOT price.

April 2006 - Reorganisation of the Associations Property Services and Development Departments.

June 2006 - Signing of the Framework Agreements.

June 2006 - Commencement of the first year Contracts.

July 2007 – 1 Page Action Plan of Improvements

Page 10: Family Housing Association (Wales) Ltd Collaboratively Working with Local SME’s

Change?

The Need to Change?

The WAG guidance to RSL’s (draft July 2003):

Change Culture to achieve “Collaborative Working”.

Select on Value not Price.

Establish an Integrated Team.

Continuous Improvement through Performance Measurement.

Improved Outcomes through Long Term Relationships and Innovation.

Local Based Supply Chains.

Sustainable Community benefits through training & employment.

Page 11: Family Housing Association (Wales) Ltd Collaboratively Working with Local SME’s

What do FHA want?

Get Better at What we do Well.

Achieve Continuous Improvement in respect of Cost, Quality, Time and

Customer satisfaction.

Remove inefficiency and and waste.

Share knowledge and expertise.

Allocate Long term, work smoothed contracts - conducive to direct

employment.

Ensure a Non Confrontational Approach.

Protected margins .

Provide Business certainty.

Page 12: Family Housing Association (Wales) Ltd Collaboratively Working with Local SME’s

What did The Association Expect?

To be The Best

Value for Money.

Excellent Quality.

Excellent Health & Safety.

A Responsive Service.

Very Happy Customers.

Year upon Year Improvements – Continuous Improvement.

Page 13: Family Housing Association (Wales) Ltd Collaboratively Working with Local SME’s

How the Association Has Had to Change.

A massive and difficult learning curve which has

come at a price in respect of staff resources and

financial commitment.

Review Internal Processes – including Standing Orders

Review Roles and Responsibilities – Reorganisation.

Review Staff Skills – Staff Training and Development.

Review its ICT Systems.

Review its Accounting Processes.

Review its KPIs – How we measure our services .

Page 14: Family Housing Association (Wales) Ltd Collaboratively Working with Local SME’s

Why has it Been Difficult?

Contractors

Had little or no method of measuring the performance of their business.

Had little or no cost control within their business.

Had little or no process management within their business.

Had little or no continuous improvement experience or capability.

Had little or no quality control over works on site.

Had a variety of social & private clients they continue to work for.

Had committed to collaborative working to some degree. Some see it

as ‘work for the next few years’.

Had changed very little internally to satisfy the needs and requirements

of achieving continuous improvement.

Page 15: Family Housing Association (Wales) Ltd Collaboratively Working with Local SME’s

Why has it Been Difficult? (2)

Staff

There is very little experience in the ‘delivery of works on site’.

There was very little experience or understanding in the philosophies of

Continuous Improvement.

Staff are exceptionally busy on the existing operational activities and

are struggling with the workload, new objectives and training required.

There is constant changes in legislation, regulation, good practice in all

areas which staff have to comply with.

Given the difficulties in programming the new build works, it is difficult

to programme the PPM works.

There are competing calls made on all Departmental staff.

Page 16: Family Housing Association (Wales) Ltd Collaboratively Working with Local SME’s

What Skills do we need to Develop?

The new skills we need to develop within the supply chain (either within the RSL’s or the suppliers) are:

Cost management e.g. cost modelling, cost control, cost improvements.

Supplier development e.g. CLIP techniques.

Programme production & management e.g. Accurate, lean and integrated

programmes of works.

Supplier audit.

Value Engineering / Continuous Improvement.

Effective challenging.

Process management

ICT

Page 17: Family Housing Association (Wales) Ltd Collaboratively Working with Local SME’s

What Skills do we need to Develop?

Work Stream Leadership, What , Why and How:

Move away from traditional hierarchy of Department

Individuals fully responsible for the delivery of specific work packages.

To assist in the Continuous Improvement in Service Delivery.

Manage spend against budget

Monthly audits of costs and performance

Participation in Construct Wales LEAN review activities

Page 18: Family Housing Association (Wales) Ltd Collaboratively Working with Local SME’s

The Construct Wales Programme

An invaluable programme.

Has greatly assisted the Association and its contractors to get as far as they

have.

A great opportunity for both the Association and contractors to learn from the

improvements made by others both within and outside the construction industry.

A great opportunity for learning and delivery of continuous improvement.

A great opportunity for contractors to share experiences, improvements and

therefore collectively deliver improvement to the Association.

The 1-2-1’s must continue whoever they are delivered by.

What we’ve achieved so far, whilst substantial, are only the ‘tip of the iceberg.

Page 19: Family Housing Association (Wales) Ltd Collaboratively Working with Local SME’s

Added Value Opportunities

What else has the initiative made available?

• Central Materials Procurement.• Waste management – Green Dragon / Arena Network.• CITB – Training & Development Strategy• Supplier Development – CLIP Programme.

Page 20: Family Housing Association (Wales) Ltd Collaboratively Working with Local SME’s

Stephen Sutton

Commercial Director

Sutton Brothers Builders Ltd

Page 21: Family Housing Association (Wales) Ltd Collaboratively Working with Local SME’s

Collaborative Working

FHA

• A new Way? – NO - In-Words but principles are long founded• Sense of ownership • Stability• Continuity of work• Accountability• Main contractor still the project hub

Page 22: Family Housing Association (Wales) Ltd Collaboratively Working with Local SME’s

Collaborative Working

Supply Chain

• Knowledge & Experience• Iron out Risks • Challenging status quo• Involved in developing the design • Improving our processes – Construct Wales• Time & Waste Management

Page 23: Family Housing Association (Wales) Ltd Collaboratively Working with Local SME’s

Collaborative Working

Financial Stability

• “Pricing” Projects using The Open Book Process • Agreed % of OH&P• Cost Model

– Labour, Plant, Materials, Management & Supervision – Improving our processes – Construct Wales– Estimates traditionally prepared this way– Complete supply chain

• Actual Costs & confidence of recovering sustainable returns

Page 24: Family Housing Association (Wales) Ltd Collaboratively Working with Local SME’s

Collaborative Working

Improved Working Relationships

• Experienced a marked improvement in FHA relationship– Open and constructive relationship

– We feel valued by FHA

– We value their business

– We discuss projects and programmes of work very early on

Page 25: Family Housing Association (Wales) Ltd Collaboratively Working with Local SME’s

Collaborative Working

Greater Responsibilities• To the client

– to deliver the project on time, within budget and to the right quality

• To our employees– to provide continuity of work

• For our sub-contractors – to ensure that they carried out their works in accordance

with specifications• But under Collaborative Working, it is with our ‘supply chain’

contractors that the biggest culture change is happening– as they are now having to work ‘on their own initiative’

albeit with the main contractor

Page 26: Family Housing Association (Wales) Ltd Collaboratively Working with Local SME’s

Collaborative Working

Current Status

• Ann Street/Bigyn Lane - £671,000– a multi storey development offering 4 ground floor flats and 2

bungalows, 5 first floor flats and 1 second floor flat – 5% below the tender value submitted in 2005– with inflation - 13% less!!!!!!!!!

• Arthur Street - £678,000– a development of 5 ‘special needs’ bungalows, 2 of which are

specifically adapted for the needs of the impending tenants– due for completion in October

• Cwrt Waddl - £323,000– a development of 4 general needs bungalows, adjacent to the

existing Cwrt Waddl Day Centre– due for completion in November

Page 27: Family Housing Association (Wales) Ltd Collaboratively Working with Local SME’s

Collaborative Working

Future

• Year 1 of 5 – Overall very pleased with outcome• For benefit of our efficiencies we need continuity of work

– At least 12 months

– FHA to involve as in budgeting process on projects

– WAG to approve a 3 year programme

• We changed and adapted to the “New Way of Working”• We need the “Top of the Tree” to do the same

Page 28: Family Housing Association (Wales) Ltd Collaboratively Working with Local SME’s

Collaborative Working

Future-Finally

• Presented to the FHA’s Tenant Group last month

• The first time that I have ever been involved with the ‘end users’ of the developments we construct

• “End Users” need to join our Steering Group to discuss and provide valuable observations for future projects

Page 29: Family Housing Association (Wales) Ltd Collaboratively Working with Local SME’s

Paul Gibson

Steering Group Chair

&

Senior Partner of George Gibson

Page 30: Family Housing Association (Wales) Ltd Collaboratively Working with Local SME’s

Previous Working Relationships

Tenders

• 3 or 5 year cycles• Lowest Price• Second/third year profit

Page 31: Family Housing Association (Wales) Ltd Collaboratively Working with Local SME’s

Previous Working Relationships

Partnerships

• Specialist Labour shortage• Stability• Tender costs with uplift

Page 32: Family Housing Association (Wales) Ltd Collaboratively Working with Local SME’s

Previous Working Relationships

Collaborative Working

• Investment /Plan for the future• Risk Management• Proactive approach• Cost Analysis / knowledge• Continuous Improvement

Page 33: Family Housing Association (Wales) Ltd Collaboratively Working with Local SME’s

Collaborative Working

Two Positives

• New Methods of working• Understanding Costs

One Negative• Time – The Steering Group

Page 34: Family Housing Association (Wales) Ltd Collaboratively Working with Local SME’s

Workstreams

Page 35: Family Housing Association (Wales) Ltd Collaboratively Working with Local SME’s

Collaborative Working

Workstreams

• Cost Control & Monitoring• Continuous Improvement• New Work / Opportunities• Learning & Sharing

Page 36: Family Housing Association (Wales) Ltd Collaboratively Working with Local SME’s

Nigel Hawkins

Quantity Surveyor

Page 37: Family Housing Association (Wales) Ltd Collaboratively Working with Local SME’s

THE FIRST EIGHTEEN MONTHS -

THE GOOD, THE BAD AND THE UGLY

Page 38: Family Housing Association (Wales) Ltd Collaboratively Working with Local SME’s

The Good

Greatly improved communication

Better understanding of each others businesses and

working methods

Improved standards

Performance statistics - cost tracker

- weekly stats

- monthly stats

Suppliers improvement targets

Page 39: Family Housing Association (Wales) Ltd Collaboratively Working with Local SME’s

The Good

Training programme

Realisation of true costs

No blame culture

Appreciation of team effort

Improved workload for supply chain

Predictability of costs

Improved programming of works

One-to-one training

Page 40: Family Housing Association (Wales) Ltd Collaboratively Working with Local SME’s

The Bad

Cost models made to fit budgets

Lack of training on cost tracker

Cost tracker not “the finished article” – eighteen versions in

eighteen months

Cash flow affected whist trying to resolve issues

Double entry of data

Cost models initially based on unrealistic data

Page 41: Family Housing Association (Wales) Ltd Collaboratively Working with Local SME’s

The Bad

Too much time spent on Collaborative Working

Greatly increased management time

Large numbers of KPIs

Rise in number of call backs – no incentive for right first time

Change brings about inefficiencies

Ineffective work smoothing

Page 42: Family Housing Association (Wales) Ltd Collaboratively Working with Local SME’s

The Ugly

Too many meetings

Too much training

FHA had to learn too! – we didn’t know all the answers!

Natural resistance to change – “I’ve been doing it this way

for the last 30 years………..”

Lack of understanding of what was required – on both sides

Page 43: Family Housing Association (Wales) Ltd Collaboratively Working with Local SME’s

The Ugly

Payment delays – queries, audits, mistakes

“10% of my workload takes up 30% of my management

time.”