Let’s face it construction gets a pretty bad press from many quarters; so why are Total Flow putting such an emphasis on the sector? What do we know about the built environment?Well, what we do know is that in this £100bn+ turnover industry there are some mammoth opportunities to improve and create wealth for organisations which want to play.
- More than a third of all construction
projects are completed late - Less than half come in on budget
- The industry as a whole makes on
average only 1% margin
On the positive side:
- Construction has an 11% forecasted annual growth rate
In the world of big numbers; it won’t take a revolution to generate significant wealth for our clients:
For a £50M housing development what bottom line impact would the following make:
- Halving the 20% of materials which are purchased but never used
- Doubling of the output of specialist trades by ensuring a steady flow of work
- Quartering of build time through micro planning and integrated supply
- Virtually eliminating snagging with a right first time approach
If that doesn’t mean more than £5M on the bottom line we really have lost the plot.
So why are Total Flow so convinced this can be done? We have heard the logic that every construction project is different and so rules of repeatability don’t apply. While broadly true at the macro level most elements are fundamentally the same:
Fitting residential doors and windows can be analogous to hanging doors on a car – if you have the right sized product for the hole, the right fixings and an agreed method you have a repeatable process.
Build up repeatable processes from this level of detail and the savings above will be achievable.
We have met some remarkable people in the industry who know the potential is there, but have not found a way to unlock the additional value. The adversarial history of contracts within the sector does not lend itself to open partnership and collaborative working. We believe we have found enough players to demonstrate what can be done through redefining the Supply System at the macro level and changing behaviour at the micro level on site.
We have found some universal truths across administrative processes, product design and manufacturing:
- At least 75% of current ‘work’ time can be eliminated as adding no value
- Leading to a doubling of productivity and
- 20% reduction in cost
Now I’m sure that staff at Corus in the 90’s were more sceptical than you are today: This couldn’t apply to their business. But they were the first steelmaker to make more with only 20% of the people. They achieved this by looking at value adding processes, not just through automation. They were in a much stronger position as leaders than those who were forced to follow.
It will happen in construction and we want to be working with the businesses who do it first.