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Reducing Costs and Improving Results for Refurbishments Shaun Aldis Director of Property Services

Reducing Costs and Improving Results for Refurbishments Shaun Aldis Director of Property Services. Context. 3 Partners £410m over 5 Year’s (currently in year 3) Circa 24,000 occupied properties

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Reducing Costs and Improving Results for Refurbishments Shaun Aldis Director of Property Services

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  1. Reducing Costs and Improving Results for RefurbishmentsShaun Aldis Director of Property Services

  2. Context • 3 Partners • £410m over 5 Year’s (currently in year 3) • Circa 24,000 occupied properties • Scope of works: Kitchens, bathrooms, central heating, electrical rewires, external improvements including insulation and combination of the above to high rise

  3. Challenge • Shortfall in delivery £47m* • Local employment (highest in West Midlands) • High expectations: promises made • Huge mobilisation 750 employed on contract excluding supply chain • Is there comparity between the three partners on the triple bottom line? • What is the true cost of delivery? • Management of the day to day cost activity? • Would you spend your money this way?

  4. KEY PHASES OF PARTNERSHIP PHASE 3 HIGH STRATEGIC VALUE PHASE 1 DELIVERY TRUST TIME PHASE 2 ADDED VALUE

  5. What did we do?Efficiency Programme • Strategic Overview • Bottom up: Think - Plan - Do • Vision for the future ~let your imagination run away • Don’t focus too hard and predict the outcome Christopher Chabris and Daniel Simons (1999) perception test • Avoid dramatic change • Health Check • Understand your base line • Sweat the details ~succession/scenario planning • Keep it real ~ challenge • Where do you need to be?

  6. Efficiency programmeHealth CheckFindings • Reasonable cost comparators • Varying costs between each partner • Varying costs from supply chain for the same product • Component frequency replacement • Inward investment • Refusal rate • Delivery model to accommodate PRADA

  7. Courtesy of Chartered Management Institute

  8. Efficiency programmeAction • Lead from the top • Developed cash flow forecasting model • Shared outcome and cashable efficiencies • Cost/value reconciliation for each partner: OBCM, Full supply chain integration, KPI incentivisation • Review material specifications and guarantees • Consistency review, frequency replacement and quality • Introduced ‘lean’ • Improve customer satisfaction • Incentivised what matters

  9. Efficiency programmeOutcomes • 20% overall savings by each CP through lessons learned and best practice sharing across the partnership • Adoption of target cost mechanism and KPI incentivisation on gain share, led to improvements • Total TSQ’s rose from 94% to 98% • Incentivised local employment (increase from 22% to 32%) • Rigorous application of lean techniques to reduce time in property (properties completed in less than 25 days moving from 88% to 97% across partnership) • Reduced number of days in property from 25 to 15

  10. Efficiency programmeOutcomes • Equal vigilance in reviewing the in-house structure for managing the DH programme has resulted in WH commissioning costs running at 2.7% of total costs within top quartile performance of 3% • Partnership is applying the WH ‘Refusal Protocol’ robustly and refusals are currently running at 6% • Continued Director level involvement in integrating supply chain “CWC UK – keenest prices seen nationally” • Some of efficiency savings have been absorbed by introduction of enhanced improvement justified on basis of reduced whole life costings e.g. rewire versus partial rewire

  11. Efficiency programmeOutcomes • Following consistency review: improved scope of survey reliability has seen more efficient delivery being achieved with preliminaries as low as 8.8% • Materials management reviews have led to cost reductions between 20% and 35% • Reduced snagging • Improved information to tenants • Improved knowledge on stock ~no surprises

  12. What next? Ice Berg Effect

  13. Questions Shaun AldisDirector of Property ServicesWolverhampton Homesshaun.aldis@wolverhamptonhomes.org.uk

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