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At the ACE Engineering Excellence Awards, held on 25 May at the St Pancras Renaissance Hotel, I had the honour of presenting our inaugural lifetime achievement award to Sir Michael Latham.
Sir Michael’s landmark report of 1994, “Constructing the Team”, championed the use of partnership as a means of “improving quality and timeliness of completion whilst reducing costs”. This was then reiterated in Sir John Egan’s 1998 report, “Rethinking Construction”.
Today we are still moving toward this goal. Much has changed in the construction sector since the early 1990s, but there is still work to be done to bring greater meaning to the partnership approach.
The recent Government Construction Strategy places significant emphasis on coordination, leadership and improved supply chain relationships. It makes clear that the government does not have a consensus understanding of its construction supply chain.
Furthermore, there is the view within government that supply chains are generally fragmented.
To that end, the Strategy aims to achieve greater efficiencies through the “full engagement of an integrated team” – that is, designers, other professional consultants and contractors offering an integrated proposition.
ACE has often highlighted the value of early supply chain engagement and the need for meaningful partnership throughout the asset life cycle. The government’s reinforcement of this is, therefore, extremely welcome.
So what might the integrated industry of the future look like, and what might it mean?
The drivers of integration – at least, in the minds of government – are efficiency, quality, value and decarbonisation. The industry of the future must be able to offer all of these.
The government aspires to place 25% of its work directly with SMEs, However, this will be achieved without breaking down packages of work. Some may find this disappointing; ACE has often highlighted how smaller suppliers can be placed at a disadvantage by frameworks that appear to favour larger companies.
The alternative is to re-think structures of delivery. SMEs can boost their contracting potential through collaborative bids, for example. Tier 1 suppliers, too, will need a different approach to their supply chains: more sub-contracting of work, more reliance on local presence – including SMEs - and more grouping together of suppliers from across the disciplines are the likely outcomes.
This very much reflects the trends we are seeing in the market. Contractors and consultants are converging; the distinction between the engineer and the architect is blurring; the big are getting bigger; the small are becoming more specialist.
Localism is another unknown quantity. Communities and local authorities will expect employment in their localities. For larger suppliers, this may mean more commitment to partnering with local expertise.
Is all of this necessarily a good thing? Those steeped in traditional approaches to procurement and delivery may disagree, but the market is an ever-evolving structure. New competition from developing markets will bring new dynamism; those unprepared for change may find themselves left behind.
Whatever the shape of the industry of the future, meaningful partnership is the best way of deriving the benefits of innovation and new opportunities. In my view, it is not just the best model for our future – it is our only option.
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