How can we use research to deliver project success?
Can a construction company deliver major programmes and projects while also being a commercial and collaborative leader for its supply chain partners?The lack of collaboration in the industry delivering the country’s critical infrastructure has consistently led to construction delays, cost overruns and worse yet, defects in delivery. If the construction sector cannot collaborate to deliver projects on time and to the highest quality standards, it will struggle to deliver on the promise of modernisation.
Contractors must focus both on delivery methods and collaboration at the same time if they want to push boundaries in innovation, raise the quality of delivery and inspire its people and partners.
While better collaboration in construction has been shown to have a positive impact on project delivery, bringing more certainty of outcome, quality and budget, there has been little industry data out there that we can use to push collaboration forward and to consistently overcome supply chain fragmentation and adversarial relationships in the construction process.
Voices for the industry, such as BuildUK, have helped in raising awareness around the negative impact of adversarial contractual relations on a project. It is now up to contractors and other key construction delivery partners to come up with ways of collaborating consistently - adopting collaboration as an approach to delivery rather than an option.
Using the power of research, sharing data and knowledge, we now have the opportunity to work together to overcome fragmented supply chains and work collaboratively.
The power of data
The Mace Business School (MBS), Mace’s in-house supply chain training body, has been working in partnership with the Cardiff Business School since 2007 to gather our supply chain data and to find out how we can improve our service and work more productively.
In our first significant piece of work together, we analysed performance data for our suppliers between 1990-2013. We focused on understanding the impact of supplier development initiatives on key performance indicators (KPIs). Using different relationship types and supplier development initiatives, we organised and ranked suppliers into relational categories, including ‘strategic partners’, ‘preferred’ and ‘approved’ suppliers.
The findings have reported a significant difference between the volatility of performance in different groups. The more collaborative the relationship with the supply chain partner, the more consistency there will be in their performance, for a significant time interval. Our ‘strategic’ and ‘preferred’ partners delivered consistently better outcomes than the ‘approved’ suppliers.
For the first time, we had the data to prove that collaborative relationships have a real impact on a team’s performance during a project. Cardiff Business School’s research, based on our data, helped us inform our teams and our supply chain partners that collaboration is key to success and we reflected this in Mace Business School’s training modules.
Sharing the data and findings we collect with the wider industry can improve practices and attitudes. Rather than keeping data in silos, we have to collect it and share it to drive meaningful knowledge about the way we work. If we don’t know where and how can work more productively, we can’t adjust and make the necessary changes.
Sharing knowledge can strengthen sector collaboration
Building on this work, we used more detailed monthly KPI data from 2007 to 2015 available in the Mace Business School and collaborated with Cardiff Business School to analyse it, applying the time constant learning curve model to better understand the rate of learning and learning parameters for different supplier categories.
The findings indicate a ‘relational gain’ as we move towards more collaborative, long term relationships. Suppliers that have been part of the MBS for 5 years and over (which we refer to as long-term strategic partners) outperform all other less collaborative categories.
New suppliers who are not formally part of Mace’s development programme typically do not perform well at the outset of a project (starting lower down the learning curve) but can accelerate rapidly along the curve via integration and ‘soft landing’ efforts. In other words, the data showed that, through Mace’s targeted efforts and initiatives, collaboration was speeding up the learning process for a new supplier we had not worked with before, resulting in better outcomes.
Cardiff Business School helped us to understand that investment in supplier development must be tailored to the partnership categories, helping Mace to refine our approach and processes, and make more strategic use of our long-term partners. The research also contributes to a wider changing of culture, where the supply chain is no longer considered an ‘island’ or a commodity.
The analysis offers benchmarks for others in the industry to show the relative relational gains to be achieved through long-term collaboration, but also integration efforts with new suppliers.
If all construction companies across the industry used their data in the same way, we would be able to completely overhaul our practices and approaches to project and programme delivery.
Sharing knowledge is the first step in collaboration.