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Meeting the productivity challenge through the Productivity Partnership BETA Skills Forum, 9 March 2011. Purpose of the Productivity Partnership. Partnership of industry and government (multi-party team approach) Raise productivity in the build sector

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Meeting the productivity challenge through the Productivity PartnershipBETA Skills Forum, 9 March 2011

purpose of the productivity partnership
Purpose of the Productivity Partnership
  • Partnership of industry and government (multi-party team approach)
  • Raise productivity in the build sector
  • Contribute to increased economic development
  • Goal: 20% increase in productivity by 2020
  • 20%/2020 ≈ 2% GDP ≈ $2.6 billion p.a.

Status as at 9 March 2011

aims of the productivity partnership
Aims of the Productivity Partnership
  • Identify and address barriers to improved productivity (through team work)
  • Promote client confidence
  • Promote co-operation and collaboration (shift from silo approach)
  • Energise industry leadership and support
  • Support DBH and other government agencies

Status as at 9 March 2011

the productivity challenge
The productivity challenge

Source: Statistics NZ

the productivity challenge5
The productivity challenge

Source: Productivity Taskforce

the productivity challenge6
The productivity challenge

Source: Statistics NZ

the productivity challenge7
The productivity challenge

Source: Statistics NZ

importance to nz inc
Importance to NZ Inc
  • 90% of NZ household wealth is held in housing
  • 31% of building work ($50k+) results in disagreements or disputes (DBH Research, 2010)
  • Leaky building syndrome has damaged the reputation of the sector
    • PwC estimate ≈$11.3 billion cost to repair
  • The collapse of 50 finance companies since 2006 ≈$6 billion

Status as at 9 March 2011

importance of culture
Importance of culture
  • Sector leaders seen as taking ownership of the productivity challenge
  • Employees empowered and enabled to challenge the status quo
  • Training for a changing culture
  • Openness with the value v cost dichotomy (lowest cost should not be the sole driver)
  • Outcomes are clear, well defined and understood
  • Across the board acceptance that industry culture must change for real progress
  • “Coopertition” v silo’d competition
  • Sharing performance information and being open to sharing innovation and learning from others

Status as at 9 March 2011

what can be achieved
What can be achieved?
  • Greater client confidence and satisfaction
  • Lower cost of service
  • Less waste and less downtime
  • Less need for rework
  • Higher quality buildings and houses (that meet client needs)
  • Higher productivity and profitability
  • Improved comparability with trading partners
  • Reduced work-related fatalities and injuries
  • Less need for regulatory oversight

Status as at 9 March 2011

creation of the productivity partnership
Creation of the Productivity Partnership
  • The Building and Construction Sector Productivity Taskforce 2009 [http://www.dbh.govt.nz/sector-productivity-taskforce]
  • Sector meetings in May and June 2010
  • The initial sponsors – DBH, BRANZ and BCITO/BETA

Status as at 9 March 2011

productivity partnership establishment board
Productivity Partnership Establishment Board
  • Bill Smith (Chair)
  • Peter Gomm (Mainzeal)
  • Brent Mettrick (Stonewood Homes)
  • Gordon Moller (Moller Architects)
  • Ian Elliot (BETA and Plumbing etc ITO)
  • Pieter Burghout (BRANZ)
  • Katrina Bach (DBH)

Status as at 9 March 2011

skills working group
Skills Working Group
  • Chair: Ruma Karaitiana
  • Purpose: Look at how to improve labour productivity and skills in the sector
  • Progress: BETA has been taking the lead on skills which precedes the establishment of the Productivity Partnership
  • Funding: BETA (supported by the Tertiary Education Commission)

Status as at 9 March 2011

skills working group16
Skills Working Group

Ruma Karaitiana (chair) –BCITO

Victoria Troake – Troake Wall & Ceiling Services

David Nummy –UNITEC

Derek Baxter – Certified Builders Association of NZ

Doug Gorman – Department of Labour

Jeremy Baker – ITF

David Fabish – David Fabish Ltd

Tom Ellis – Fletcher Construction Ltd

Status as at 9 March 2011

skills working group17
Skills Working Group

Status as at 9 March 2011

research working group
Research Working Group
  • Chair: Helen Anderson
  • Purpose: Determine how research can be used to improve productivity
  • Progress: Two projects underway
    • measurement of KPIs
    • research action plan
  • Funding: BRANZ

Status as at 9 March 2011

research working group19
Research Working Group
  • Tony Lanigan – AUT
  • Anthony Leighs –Leighs Construction
  • Derek (Bax) Baxter – Certified builders
  • Kevin Golding – Winstone Wallboards
  • Pam Bell – Prefab Consortium
  • Ruth Berry – Research Consultant
  • Wayne Sharman – BRANZ
  • Adrian Bennett – DBH
  • Jeff Seadon – Scion

Status as at 9 March 2011

indicators progress so far
Indicators – Progress so far

Meeting the 20% by 2020 will need some inspirational targets that make sense for firms and for projects

Draft only

Status as at 9 March 2011

research action plan
Research action plan
  • Stocktake of research has shown
    • Existing research is mostly about national (economic) measures of productivity
    • There’s quite a lot of knowledge about the makeup and skills of the sector
    • There are gaps in our knowledge of what makes the biggest difference at a firm and project level
  • We now need to identify gaps and priorities for future research

Status as at 9 March 2011

research workstream likely outcomes
Research workstream – likely outcomes
  • A set of KPIs most likely to improve performance of firms and the construction sector
  • Possible proposal for on-line tools to help firms collect and use the data
  • A research action plan with projects and likely funding needed. Govt and industry co-funding of projects likely.

Status as at 9 March 2011

procurement working group
Procurement Working Group

Chair: To be determined because of withdrawal

Purpose: Look into how the approach to procurement can improve productivity

Progress: Working Group has considered

the Taskforce recommendations; and

what determines good procurement practice

Development of a project plan and work programme to deliver on change – establishment of clients/constructors forum one likely step

Status as at 9 March 2011

procurement working group24
Procurement Working Group

Chair(had been MED Procurement – will keep rep. on WG)

Don Stock – Naylor Love

Amanda Warren – Constructing Excellence NZ

Warren Warfield – RPC Ltd

Jerome Sheppard – Ministry of Education

Richard Quinn – NZTA

Kerry Hollingsworth – National Infrastructure Unit (Treasury)

Ian Wheeler/Kevin Doherty – Auckland CCOs

Mike Blanchard – Transpower

Richard May – PMMS Consulting

Status as at 9 March 2011

design and production working group
Design and Production Working Group

Chair: To be determined

Purpose: Determine how design and production systems can operate more productively

Progress: Working through the terms of reference for the project, including Chair and membership of workstream

Key issues

Supply chains are long and complex

Techniques and technologies that make processes transparent and integrated are available but not widely used

Lean production, prefabrication and modularisation, BIM/IPD and GIS

SMEs - diffusion of techniques/technologies

Status as at 9 March 2011

how it all comes together wellington indoor community sports centre
How it all comes together – Wellington Indoor Community Sports Centre

Great – Procurement, Practice, People (client and providers)

Objectives included sustainability and whole-of-life performance

Clients and providers worked as a team, and with the community

“Value Management and Engineering” approach led to innovations to stay in budget but deliver objectives

Design and build will save $200K a year in operating costs

Use of Building Information Model (BIM) allowed for better team work and client relations, and real time project management

Status as at 9 March 2011

questions to consider today
Questions to consider today
  • What skills mix might be needed in 2020?
  • What are the implications of technological and other change?
  • To what extent is there a skill shortage/skill utilisation problem?
  • What are the causes of these skill problems and how can they be addressed?
  • What are the most important areas to address?

Status as at 9 March 2011

more questions
More questions
  • How can the industry address skill issues that are also symptomatic of problems in the wider economy/education system?
  • What would reduce health and safety problems?
  • Does the labour only contracting arrangement undermine quality?
  • Is the industry becoming more specialised? if so what is the role of the generalist?
  • Effect of boom-bust?
  • Does the industry value chain impede productivity?

Status as at 9 March 2011

final comments
Final Comments
  • Plenty of scope for the sector to lift its game
  • Skills is a vitally important area
  • The Productivity Partnership offers a chance to achieve public/private ‘win-wins’
  • The Productivity Partnership won’t have all the answers
  • We need the involvement and contribution of all parts of the sector
  • What can you do to help?
  • Any Questions?

Status as at 9 March 2011