Partnering in the construction industry

Transcription

1 Partnering in the construction industry Introduction Very high housing costs, poor quality together with cartelization are some of the problems that the Swedish construction industry has been noticed for during the decade. The general publics demand on improvement has expressed itself through governmental investigations. In these it has been proven that new planning-, contractorand procurement forms should be initiated. In addition the technical and administrative obstacles that works counter to the lowering of the construction costs, should be removed (Byggkostnadsdelegationen, 2000). This is what partnering is about. Partnering is a concept for interaction and has been increasingly popular within the Swedish construction industry. The purpose is to develop the relations between the partners and integrate the competences that exist within a project, to make the construction process more effective. The basic idea with the concept is to make the client and the supplier work toward a common goal and thereby create a win-win situation. One of many definitions of partnering comes from the Construction Industry Board, which nowadays is dissolved. It is frequently used in literature and articles about partnering. Partnering is a structured management approach to facilitate teamworking across contractual boundaries. Its fundamental components are formalised mutual objectives, agreed problem resolution methods, and an active search for continuous measurable improvements. (Construction Industry Board 1997) Method In consultation with Swedish Construction Clients Forum and the assistant supervisor representatives for twenty-seven organizations within Swedish Construction Clients Forum were chosen. They all had carried out some sort of partnering project and were suitable as respondents. To get a certain amount of randomness the respondents were questioned on their last performed partneringproject. In order to collect data from the respondents, a questionnaire was created. The first part of the questionnaire treated the partnering process in itself and consisted almost solely of questions with fixed alternatives. The second part evaluated the result of the project through a number of statements, concentrated on both process and result. A five grade Likert-scale which reaches between completely agrees and don t agree, was used get the respondents opinions. A reference group was put together to make sure the questionnaire was right for the intended cause. The group consisted of persons with a lot of experience in applying partnering. They gave aid to the search for pertinent questions and pointed out what had to be explained further. The collected data was thereafter processed and analysed.

2 Because of deep going questions and statements with fixed alternatives, which were sent to a small number of respondents, the method basically was of a qualitative nature with a certain influence of quantitative sort. Theory Partnering as a form of interaction was developed by the US Army Corps of Engineers in the end of the 80 s. The purpose was to reduce costs in public construction projects by avoiding legal disputes, which was very common in this field (Gransberg et al, 1999). The development of partnering in Sweden hasn t come as far as, for example in the United States and Great Britain. On the other hand there are many projects that are using one or many components of partnering in Sweden today. But it s rare with projects that use all of the components that should be included in a fully carried out partnering project (Rhodin, 2002). One of the leading developers of partnering in Sweden is FIA. They work to improve the construction industry in Sweden. According to Kadefors (2002), one reason for the lack of interest in partnering in Sweden, could be that most people within the construction industry consider themselves having a history of a relatively good informal cooperation. Conflicts that occur are usually solved at the lowest possible level in the organization. Large conflicts are also most of the times solved on higher levels within the organization. This makes an introduction of a formal interaction seem bureaucratic and unnecessary. All this can lead to bigger tensions for the involved people to solve the conflict on their own level. Delays and quality flaws because of conflicts generate cost increases, that don t distinguish itself as much as lawyer s fee. Kadefors also means that many people think that the construction industry in Sweden is burden with more conflicts and is working ineffectively, compared to other industries. Jackson and Barlow (2000) mention a further fact that distinguish Sweden from many other countries and that is the strong role of the contractor. This is due to the domination of a few contractors on the market. Key components A successful partneringproject should consist of certain components, according to the literature. They vary a bit between different sources, but some of the components are constantly brought up. One of them is the important role of the facilitator. The facilitator s mission consists of various tasks. Some of the most important tasks according to FIA (2006) are Make sure the basic principal in the model is followed. Be responsible for the documentation and the process management at the workshops and follow up meetings. Identify sources for conflicts early and help the parties find a solution. Educate and inform on the interaction in the project. FIA (2006) also mentions that the facilitator should avoid being a part of the local organization. Nor should the facilitator participate in the daily decisions regarding technology and economy. Experience from partnering projects show that the need for a

3 facilitator is largest in the projects early stages (FIA, 2006). Teambuilding workshop is another key component in the partnering process. Here the participants create a project charter that shows the common goal that has been agreed. The document should then be signed by all members. This is an important step since it only can be done if all parties goals and interests are known and accepted by everyone (Hodgkinson, 2001). Something that is often recurrent in partnering literature is the importance of commitment from top management. Barlow (1997) believes that management plays a critical role by supporting the concept, handle critic s argument and promote the concept to people under and around them in the hierarchy. Top management also have to bring in sufficient resources, build enthusiasm among the coworkers and dare to give authority to people (Edelman et al, 1991). Commitment is additionally important for the interaction not to deviate in to a traditional behavior when inevitable problems occur (Scott 2001). Scott even claims that the most important component for good relations between parties is that the contractor s client top management is dedicated. Yet another key component is systematic risk management. FIA (2006) claims this component to be a part of every partnering project. Throughout the whole project all common risks should be evaluated jointly with all parties. The biggest opportunity to influence a projects design and result, lays in its earliest stages (Scott, 2001). This fact applies to many different aspects of the partnering project. Analyse Causes for partnering There are many reasons for using partnering in a construction project. The respondents were therefore asked to rank the most important reasons for choosing partnering for their projects. To be able to educe the most important reason for partnering the ranked alternatives are numbered. The distribution outcome is shown in figure 1. Points The will to improve Control cost Control Time Control quality Complex project Risk sharing Avoid legal disputes Other Fig. 1 Respondents rank of the reason for choosing partnering The will to improve is ranked as the most important reason for choosing partnering. This may indicate that many people consider the industry being in need of change. The explanation for the high rank of The will to improve, may lay in the problems that the Swedish construction industry experience today. It s also interesting to notice that the reason Avoid legal disputes was placed last but one, though partnering has it s origin in avoiding legal disputes. Sweden hasn t really had any big problems with legal disputes as in other countries, which could explain the low rank.

4 Facilitator As mentioned in the theory-chapter the facilitator plays an important role according to many researchers. Therefore the projects that used a facilitator and those who didn t, were compared to observe any differences in result. A strong tendency appears in the comparison, projects with a facilitator had considerably higher results both regarding the process and the actual result. If the group which used a facilitator are further examined, differences appear here to. The projects with a neutral hired facilitator have compared to those with one from the contractor, a generally better process and actual result. Committed top management Another key component that is interesting to look more into is the importance of committed top level management. But the only tendency that showed was that almost every project seemed to have a committed top management. This may be because it s critical to have a committed top management if the concept of partnering should be introduced to the organization. Common goals A desirable result of partnering is lesser cost increase during the project. Many factors may influence the cost increase but some plays a bigger part. The tendency that is most evident is the put up of goal-price in the earliest stages of the project. This factor seems to enhance the probability of a smaller cost increase. Amongst those respondents who putted up a goal-price in their project s earliest stages, a majority meant that there were lesser cost increases in their partnering project, compared to a similar traditional project. On the other hand among those respondents who didn t put up a goalprice, only a minority claimed having lesser cost increases. Another tendency is the importance of having a common risk run-through that handles the economical risks. A relatively large amount of the respondents that used this in their projects meant that the cost increase were lesser than in a similar traditional project. Whereas among those who didn t do this, a minority claimed having lesser cost increases. Risk management When it comes to risk management the most important thing seems to be, dealing with the risk management early on in the process. Among those respondents who early on in the process dealt with the risk management, a majority meant that they got an estimated profit that corresponded with their risk. On the contrary, among those who didn t do this, no one meant that they got an estimated profit in correspondence to their risk. Workshops where risk is brought up also play an important role for the parties to get a profit that correspond to their risk. Among those respondents that did carry through a workshop with risk management included, almost everyone meant that got an estimated profit that corresponded with their risk. On the other hand, among those who didn t this, almost no one meant that they got an estimated profit in correspondence to their risk. Another tendency that isn t that clearly is the common risk go-through. There are some differences though between those respondents who had a common

5 risk go-through and those who didn t. Among those who did, almost everyone meant that the parties took a risk that corresponded to their estimated profit. Among those who didn t, half of the respondent meant that the parties took a risk that corresponded to their estimated profit. Conclusion In the beginning partnering was developed for the purpose to avoid costly legal disputes. But avoiding legal disputes are ranked among the lowest reasons for choosing partnering. Instead is the will to change the driving force for choosing partnering. This probably has to do with the problems that the Swedish construction industry experience. If this change is going to happen it s critical to have a committed top management, which most partnering projects seems to have. Noticeable is that almost all of the projects succeeded in avoiding legal disputes. Among the factors that the respondents them self experienced as important certain patterns arise. Choosing the right persons to work with. Suitable organization. Mutual and close confidence. Continuously have follow up s on the goals. As so many other things in society one of the strongest driving forces for partnering is economical. Among the respondents the second most important reason for choosing partnering was the will to control cost. There are indications that if a goal-price is put up early on in the process it s more probable that the cost increases is controlled. In addition there are tendencies that if a mutual risk go-trough is performed it s easier to control the cost increases. To make sure that all parties get an estimated profit that corresponds with their risk, there are signs that risk should be put up early on as a condition for the project. Furthermore workshops where risk is a part of the agenda, contribute to the parties getting an estimated profit in correspondence to their risk. A key component in a partneringproject is the facilitator who seems to have a strong influence on the result. Above all the neutral hired facilitator appears to achieve the best result. Moreover another decisive component is the common risk go-trough which seems to lead to a better result. The respondents are generally very satisfied with partnering as a way to work, both concerning the process and the actual result. It s also interesting to observe that almost everyone thought that they got better quality, time control, client satisfaction and lesser cost increases in the partnering project compared to a traditional project. As a counterbalance to all of the positive trends and tendencies, it should be considered that most of the respondent experienced that the constructors client had to put in a lot of extra work compared to a traditional project. This probably has to do with the increase of the amount of meetings and workshops that is necessary for the process to function.

6 The most overwhelming impression is how positive all the respondents are to work with partnering in future projects. This shows that partnering isn t a just another new contraption but a concept that is here to stay.