1

A Member of the Team Focus Group

Integrated Management SystemsIndustry View 2

Michael Thompson BSc (Eng), FFICE, MCIWEM

Roe Thompson Limited

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What is Integrated Management?

The intents of Integrated Management are– to improve delivery of the specified product to the

customer– to improve communication to the man at the sharp end– to remove duplication of paperwork arising from

operating separate management systems which actually have a lot in common.

We cannot ignore the close affiliation of these intents with those of the Partnering approach.

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What is Integrated Management?

These intents can be achieved in a Project through the Partnering or Team approach by setting up, to all intents and purposes, a Single Organisation which can draw from the several organisations involved

Better control of the Project and the finished product can be attained

Some of the annual performance targets, suggested by Sir John Egan in “Rethinking Construction” (July 1998), can be approached

We will get ever closer to the concepts of “Best Practice”

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“Rethinking Construction”

Indicator Improvement each year

Capital costAll costs excluding land and finance.

Reduce by 10%

Construction timeTime from client approval to practical completion.

Reduce by 10%

PredictabilityNumber of projects completed on time and within budget.

Increase by 20%

DefectsReduction in number of defects on handover.

Reduce by 20%

AccidentsReduction in the number of reportable accidents.

Reduce by 20%

ProductivityIncrease in value added per head.

Increase by 10%

Turnover and profitsTurnover and profits of construction firms.

Increase by10%

ANNUAL PERFORMANCE TARGETS

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What is Best Practice?

There is no single definition for Best Practice. One definition:

– It is the achievement of all the goals laid down by a Project Team (including the Client) for the final product, by consideration of the best techniques of procurement, contract strategy, quality assurance and good supply management.

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Can we do things better?

When we look back, could we have done better with our projects?

Even with the Partnering / Team approach could we have done better?

Should we not strive for 100% in “Excellent”?

Would not then Best Practice be achieved?

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Case History: Pennington WwTW

Four organisations, working together without walls between them:– Client:- Southern Water– Project Manager:-

Montgomery Watson– Designer:- McDowells– Contractor:- Birse

Construction

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The Challenge

Build a brand new sewage treatment works from outline design on a “green field” site within 21 months and within budget

Undertake the earthworks during the worst period of the year!.

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A Quick Start

The Project started on 24 July 1995 The Team Building Workshop took place on 31

July 1995 and a Charter agreed and signed The Value Management Workshop commenced

on 2 August 1995 A firm outline design was in place within 10

days.

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Alliance Charter

The Charter

Mission Statement“Our project objectives are to deliver the scheme to the desired quality and levels of service at the lowest life-cycle cost and highest value, on time and with no surprises to the satisfaction of all Partnering Team Organisations”

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The Pennington Organisation

Sou th ern W ater Mon tg om ery W atson McDowells B irse Con stru ction

Prin cip als ' G rou p

Civil Desig nMcDowells

M&E Desig nMcDowells

G eotech n icalMcDowells

P rocess Desig nMcDowells

S tru ctu res Desig nMcDowells

Ad m in istration Assistan t

Desig n Man ag erMcDowells

S ite Ag en tB irse Con stru ction

M&E P roject Man ag erB irse W ater

P roject Su rveyorB irse Con stru ction

Safety Man ag erB irse Con stru ction

Q A Man ag erB irse Con stru ction

P lan n in g En g in eerB irse Con stru ction

Con stru ction Man ag erB irse Con stru ction

Area Man ag er O p eration sSou th ern W ater

NRA LiaisonSou th ern W ater

P lan n in gAd am s Hen d ry

Lan d Issu esMon k Rawlin g

C lien t Man ag erSou th ern W ater

Valu e Man ag erMon tg om ery W atson

P lan n in g Su p ervisorMon tg om ery W atson

Q u ality Man ag erMon tg om ery W atson

Project Man ag erMon tg om ery W atson

In vestm en t Man ag erSou th ern W ater

Independent of the Pennington Team was a firm of Quantity Surveyors auditing expenditure, using the Contractor’s cost files.

Independent of the Pennington Team was a firm of Quantity Surveyors auditing expenditure, using the Contractor’s cost files.

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Value Management

The Team underwent an intensive VM workshop phase within the first three weeks of scheme commencement

This developed an optimum outline design

The Client’s Operations personnel signed up to the Team’s outline design on completion of the VM workshop

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V M Cost Comparisons

VMAlternatives

Base10

Scenario

1aScenario

2aScenario

3aScenario

4aScenario

5Scenario

6aAsbaselinebutadjustedfor 10yearsadequacy

1200l/s,60gm/hd/d,4 PSTs,FBDA, 4FSTs, 6%sludgethickening

1200l/s,60gm/hd/d,rect PSTs,surfaceaeration, 3FSTs, 25%sludgedewatering

1200l/s,60gm/hd/d,Jetta, 3PSTs,surfaceaeration, 3FSTs, 25%sludgedewatering

1200l/s,60gm/hd/d,aerationditch, 3FSTs, 6%sludgethick, 25%sludgedewatering

1600 l/s,60gm/hd/d,Jetta, 3PSTs,FBDA, 3FSTs, 6%sludgethickening

1200 l/s,60gm/hd/d,Jetta, 4PSTs,surfaceaeration,3FSTs, 6%sludgedewatering

CAPEX 12,000,000 12,193,000 11,815,000 11,825,000 11,900,000 11,880,000 11,675,000

OPEX 60 yrs 11,795,760 11,795,760 17,743,020 19,463,280 14,118,019 11,916,720 18,600,000

NPV @ 7.5% 13,873,003 14,028,360 14,830,530 15,158,622 14,224,543 13,798,911 14,933,084

Difference 0 +155,357 +957,527 +1,285,619 +351,540 -74,092 +1,060,081

VMAlternatives

Base10

Scenario

1aScenario

2aScenario

3aScenario

4aScenario

5Scenario

6aAsbaselinebutadjustedfor 10yearsadequacy

1200l/s,60gm/hd/d,4 PSTs,FBDA, 4FSTs, 6%sludgethickening

1200l/s,60gm/hd/d,rect PSTs,surfaceaeration, 3FSTs, 25%sludgedewatering

1200l/s,60gm/hd/d,Jetta, 3PSTs,surfaceaeration, 3FSTs, 25%sludgedewatering

1200l/s,60gm/hd/d,aerationditch, 3FSTs, 6%sludgethick, 25%sludgedewatering

1600 l/s,60gm/hd/d,Jetta, 3PSTs,FBDA, 3FSTs, 6%sludgethickening

1200 l/s,60gm/hd/d,Jetta, 4PSTs,surfaceaeration,3FSTs, 6%sludgedewatering

CAPEX 12,000,000 12,193,000 11,815,000 11,825,000 11,900,000 11,880,000 11,675,000

OPEX 60 yrs 11,795,760 11,795,760 17,743,020 19,463,280 14,118,019 11,916,720 18,600,000

NPV @ 7.5% 13,873,003 14,028,360 14,830,530 15,158,622 14,224,543 13,798,911 14,933,084

Difference 0 +155,357 +957,527 +1,285,619 +351,540 -74,092 +1,060,081

Preferred option - Scenario 5

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The Programme Advantage

Typical comparison: Partnering (Integrated

Management) - 21 months D&C - 26 months Conventional - 30 months

Savings in time Savings in cost

Task Name

Design & Construction

Start

Outline Design

Tendering & Appointment

Detail Design

Earthworks

Civil Works

M&E Works

Completion Tests

Handover Tests

Defects Liability

End DLP

21/07

03/08

JF A J J A S NDJ F A J JA SONDJ F A J J S NDJ FM MJ J S ND J FM MJ J S1995 1996 1997 1998 1999Task Name

Design & Construction

Start

Outline Design

Tendering & Appointment

Detail Design

Earthworks

Civil Works

M&E Works

Completion Tests

Handover Tests

Defects Liability

End DLP

21/07

03/08

JF A J J A S NDJ F A J JA SONDJ F A J J S NDJ FM MJ J S ND J FM MJ J S1995 1996 1997 1998 1999

Task Name

Conventional

Start

Outline Design

Detail Design

Tendering & Appointment

Earthworks

Civil Works

M&E Works

Completion Tests

Handover Tests

Defects Liability

End DLP

21/07

23/11

J F A J J A S NDJ F A J J A SONDJ F A J J S NDJ FM MJ J S ND J FM MJ J S1995 1996 1997 1998 1999Task Name

Conventional

Start

Outline Design

Detail Design

Tendering & Appointment

Earthworks

Civil Works

M&E Works

Completion Tests

Handover Tests

Defects Liability

End DLP

21/07

23/11

J F A J J A S NDJ F A J J A SONDJ F A J J S NDJ FM MJ J S ND J FM MJ J S1995 1996 1997 1998 1999

Design and Construct

Design and Construct

ConventionalConventional

Task Name

Partnering

Start

Outline Design

Detail Design

Earthworks

Civil Works

M&E Works

Completion Tests

Handover Tests

Defects Liability

End DLP

24/07

05/03

DJ FM MJ J SOND JFM MJ J S ND JFM MJ JA SOND J FM J J A SOND JF A J JA S1995 1996 1997 1998 1999Task Name

Partnering

Start

Outline Design

Detail Design

Earthworks

Civil Works

M&E Works

Completion Tests

Handover Tests

Defects Liability

End DLP

24/07

05/03

DJ FM MJ J SOND JFM MJ J S ND JFM MJ JA SOND J FM J J A SOND JF A J JA S1995 1996 1997 1998 1999

PartneringPartnering

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The foundation of the Integrated Management System, the Control Plan (Project Management Plan) addressed all aspects of the Scheme

It linked to the Plans of all four parties in the Partnership

The Pennington Contol Plan

S ou th ern W ater S ervicesP ro jec t C on tro l P lan

(In te rn a l P roced u res )

M cD ow ellsP ro jec t Q u a lity P lan

(IS O 9 0 0 1 )

B irse C on s tru c tionS ite Q u a lity P lan

(IS O 9 0 0 2 )

M on tg om ery W atsonW ork P lan(IS O 9 0 0 1 )

P E N N IN G TO N W wTw S C H E M EP ro jec t M an ag em en t C on tro l P lan

(P ro jec t M an ag er)

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Principal Issues Addressed The Partnership and its

“Arrangement” Contracts Quality Systems and

Procedures Safety (incl. CDM) Environment Programme Variation orders Reporting

Design Procurement Manufacture Construction Installation Commissioning Performance Testing H&S File (inc. O&M) Successes & Lessons

Learnt

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The Filing System

A Single Filing System for all to use.

No letters between partners, but confirmation memos

Other files between Contractor and Sub-contractors also accessible

Everything auditable.

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Some Pennington Successes

Rapid establishment of the design with confidence through Value Management processes

Effective Risk Management relating to Planning Permission and Discharge Consent

Design and construction taking place concurrently

Rapid appointment of sub-contractors

Self supervision of construction works (TQM approach)

Joint planning with Operations the testing and commissioning of the Plant

Fast resolution of earthworks problems

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Pennington - Conclusion

Completed and commissioned 2 weeks early

Completed £700,000 within budget

Self-supervised - quality excellent!

Good Health & Safety record

Environmental constraints observed

But in retrospect, we are sure that we could have done

better!

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Where to next?

Hundreds of Project Teams are being formed annually, adopting the Partnering Approach with Integrated Management

Many of these are producing successful projects But remarkably the approach is still very new for a

good many in the construction industry More and more need to understand the benefits that

can be achieved through the approach, particularly at a senior level.