time to re-read rethink construction…again

Following my post yesterday and having had chance to read the transcript of Egans speech on 10 years of rethinking, I am convinced that this is a must read for all in the construction, and indeed in the built environment, to understand What the report set out to do?; What’s going wrong?; and how do we fix it?.

I am sure Egans comments will be picked up and discussed by many in the UK built environment blogging fraternity,  giving a wider view – for example take look at Mel’s comments over at Elemental

Egan cites the successes within the demonstration projects, producing some 20-30% cost savings.  In addition I am aware of and work with projects that have achieved similar benefits that are not demonstration projects. Yet for many the understanding of Egan, the Rethinking Construction report and targets just isn’t there. KPI’s derived from the Egan Report are seen as a nusaince, something to get through for bidding, rather than used or real improvement.  At mosts events and training sessions I lead I have to distribute copies of Rethinking Construction.  (A copy can be downloaded through the documents link on the left hand side panel on this page)

Egan’s recommendation for the future is to … go back and read Rethinking Construction and try and get it right second time around.  The key for me, ever since first reading back in 1998 (although I must admit to providing some input, albeit remotely) was in the title Rethinking Construction.  And I think ever since I have used the Einstein quotation of not being able to solve todays problems with the pattern of thought that created them. Those that have embraced new patterns of thought with in the industry are those who see benefits in winning work, in profit and in working conditions generally.  Those who haven’t still fight for work in competion on lowest cost, (ie on lowest profit) struggle to make margins and profits and generally have a hard time of it.

Egan on productivity:

The activity rate on a building site is still probably I guess no better than 30-odd per cent, and yet 60-odd per cent is quite easily attainable with good pre-planning and having everything available when you want it on the site.

Egan on lowest cost

I think lowest cost tendering (and I think the government is absolutely the culprit here, they were very bad as the main buyer of projects, still buying the education department with lower cost tendering) is absolutely ridiculous.

Egan on collaboartive working:

And the point to remember is that it’s a team that does it – a designer, a construction team a supply chain and so on. Working hard together they can produce a good cost. But they can’t do it if they work separately. And lowest cost tendering starts them off as separate groups.

And on how to fix it:

So, I think if anybody wants to know how to reduce the cost of what they do a lot, they could read the ‘Rethinking Construction’ report all over again. Any of the steps you miss out will cost you. I think if you don’t do all of the steps you’ll fail. But in the mean time, I think there should be the concept of two teams of target costs with plus or minus 15% gained or pained between the client and the industry, and perhaps then we might start seeing some real improvements.

3 thoughts on “time to re-read rethink construction…again

  1. Henry Loo

    Egan didn’t emphasis one important pre-requisit to his message: to deliver the kind of vision he is talking about require a massive system change.
    When we went to Japan last November, we saw how Takeneka, Shimizu and Kajima successfully translated the efficiencies that Egan was talking about in Rethinking Construction from manufacturing into construction. It was just like the book.
    Their critical success factor was the ability to combine Design and Construction operation as seamlessly as possible.
    In UK, we can’t possibly deliver that level of success because of the steep Consultancy/Contracting divide, and until such time that we can successfully come up with a breed of people under one organisation that can do both successfully together, we would never be able to deliver Egan. This goes straight to the heart of Lean Thinking because no matter how hard to try to squeeze out waste, the inherent system is not design to be efficient in the first instance (type 1 Muda is inhibiting efficiency!)
    The car industry is efficient because it is output driven. The construction industry is still inherently input driven – note when a client needs a building, rarely can he go directly to a prime contractor and gets everything under one roof; whereas that is exactly what you do in buying a car! note when a Japanese manufacturer needs a new plant, they go straight to Takenaka and Takeneka can wheel out in chapter and verse what a modern manufacturing plant would look like and reasonably accurately forecast productivity based on their research activities gathered worldwide. Kajima spend over £200million on R&D last year, 4.5% of its annual turnover. They see R&D as their USP & innovation is where the future of their business lies. No innovation=no future. Little wonder why Egan’s vision is still less than half way?


  2. Pingback: rethinking construction still requires massive system change … « isite

  3. Pingback: Egan: 10 years on (again) | Extranet Evolution

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