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

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 Partnership BETA Skills Forum, 9 March 2011

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

  2. 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

  3. 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

  4. The productivity challenge Source: Statistics NZ

  5. The productivity challenge Source: Productivity Taskforce

  6. The productivity challenge Source: Statistics NZ

  7. The productivity challenge Source: Statistics NZ

  8. The productivity challenge Source: OECD

  9. 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

  10. 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

  11. 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

  12. 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

  13. 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

  14. Structure of the Productivity Partnership Status as at 9 March 2011

  15. 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

  16. 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

  17. Skills Working Group Status as at 9 March 2011

  18. 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

  19. 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

  20. 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

  21. 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

  22. 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

  23. 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

  24. 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

  25. 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

  26. 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

  27. 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

  28. 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

  29. 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

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