LOS ELEMENTOS BÁSICOS DEL CURÍCULO

D. Bower

Introduction

As early as 1964, the Banwell Report (Banwell, 1964) noted that the UK construction industry was performing poorly compared with other countries. This state of affairs had not improved by the early 1990s, when the industry was perceived as being in decline. One of the contributors to this was the fragmentation of services, leading to a high proportion of contractual relationships and an increasing reliance by the industry on litigation procedures as disputes on site between clients, contractors and subcontractors were dragged into the courts. The increasing number of contractual disputes has had the knock-on effect of more and more projects being delayed, and the overall efficiency of the industry being reduced. There has also been the problem that the industry has lacked a focus on customer satisfaction – a trait that seems to be almost unique to the construc-tion industry.

Since the Banwell Report, there have been a series of government and industry reports that have attempted to find solutions to this problem of fragmentation and efficiency. Partnering is the latest initiative to have come out of this. Partnering, which involves clients and contractors developing a closer, possibly longer-term working relationship, has been implemented as a way of increasing efficiency within the industry, as well as a way of sharing risk.

This chapter examines partnering from its foundation in the concept of total quality. It then goes on to outline its key features and the benefits that can be accrued from its adoption. Finally, a framework for best practice is described.

Total quality management

The concept and application of total quality management (TQM) has been successfully integrated into manufacturing and service industries worldwide. It entails a company-wide effort that involves everyone in the organisation in the effort to improve performance

and customer satisfaction. It focuses on process improvement, customer and supplier involvement, teamwork, and training and education in an effort to achieve customer satisfaction, cost-effec-tiveness and defect-free work. Continuous improvement is attained through the application and integration of both human resources and quantitative methods. There are six basic concepts that are required for TQM:

1. A commitment by management to provide long-term top-to-bottom organisational support.

2. An unwavering focus on the customer, both internally and externally.

3. Effective involvement and utilisation of the entire workforce.

4. Continuous improvement of the business and production process.

5. Treating supplies as partners.

6. Establishing performance measures for the processes.

The concept of TQM has been embraced and worked successfully in the manufacturing and service industries for various reasons.

Manufacturing-based quality programmes tend to be product oriented, focusing on changes that improve the manufacturer’s completed product. Service quality programmes are more process and personnel oriented because process improvements that result in better service to customers are the main goal of service quality management programmes.

The construction industry incorporates elements of both manu-facturing and service processes, which makes it difficult to stand-ardise one format or the other for the entire industry. Another reason for the difficulties in using TQM in construction is that projects are mostly one-off and unique, meeting a specific time-frame, and so it is difficult to engender continuous improvement.

The projects are also realised in uncontrolled environments and involve enormous resources over a relatively short span of time. In spite of the difficulty in achieving total quality, most construction organisations have achieved certification. This has been gained without regard to delays in project delivery, cost overruns and the frequent low quality of products.

This rush to certification can be explained by the fear of many construction organisations that without the standard they risk losing work. The certification has turned out to be a means of guaran-teeing continuous work rather than providing quality to the client.

An important aspect of the overall change brought about by a TQM approach is a changed relationship with suppliers. The traditional approach of construction, which typically organises projects by hier-archically linked parties (clients, consultants, general contractors,

subcontractors, suppliers, etc.) possessing different skills and knowl-edge, results in complex and adversarial relationships, which affect performance.

It is therefore in the desire to deliver projects within budget, on time and to acceptable quality (which TQM has not been able to offer) that project partnering finds its roots. Increased international competitiveness, enhanced legal concerns, the introduction of new technologies, and the desired response time to delivery have also necessitated the need to change the traditional approach to project delivery and have resulted in the evolution of partnering.

Partnering

Partnering has been widely advocated for the industry in the UK to rectify the adversarial contractual relationships that have jeopar-dised the success of many projects (Latham, 1994; Baden Hellard, 1995; Construction Industry Board, 1997; Bennett and Jayes, 1998).

Features of partnering relationships have been seen in various industries for many years. The partnering style of relationships with contractors was a feature of some construction projects in Britain early in the Industrial Revolution (Barnes, 2000). As applied today, it originates in the philosophies of the Japanese-influenced automo-bile industry. The defence, aerospace and construction industries have followed. Its essence is alignment of values and working practices by all members of the supply chain in order to meet the customer’s real needs and objectives, though this has been pursued with different degrees of success and sustaining it is a ques-tionable objective (Green, 1999). Continuous improvement has been an important objective, with emphasis not only on cost but also on quality, lead time, customer service, and health and safety at work. Incentivising the partnering companies by sharing cost savings has been a feature of continuous improvement, perfor-mance -based partnering in many industries, but in construction this has often been less significant than the primary objective of avoiding disputes.

The idea of alignment is significantly at odds with traditional practice in many industries. Procurement in most of the public sector has historically been based on accepting the lowest-price bid. Much private construction also traditionally operated on this basis. It has led to conflicts about paying the actual costs of work, which revolve around risks and financial self-interest, between the various stakeholders – such as the clients, design team, consultants, main contractors, subcontractors and suppliers – throughout the construction process. As a consequence, the final cost of the project usually exceeds the contract price and the result is confrontation.

MANAGEMENT OF PROCUREMENT

Partnering represents a philosophy of dispute prevention, con-flict resolution and equitable risk allocation rather than a legalistic and confrontational approach. Partnering is an addition to other good project management practices, long-standing relationships, negotiated contracts, preferred supplier arrangements and other forms of team-based supply chain arrangements. Partnering is an addition to the techniques for dispute management. As shown by the Movement for Innovation projects, partnering can be applied to all types of contract arrangements and with any of the indus-try’s model terms of construction contract, and it can extend to subcontractors.

The objective is to create a ‘win–win’ culture so that projects are completed successfully and so recover the confidence of clients in the industry. Partnering is a process to establish good relationships at all the interfaces between stakeholders, and their commitment to the job and each other. Partnering should create trust, teamwork and cooperation to give early warning of potential problems and establish effective authority to agree decisions on them. It is critical throughout a project to remove traditional barriers and perceptions of unfairness between the parties involved. By changing to a ‘win–

win’ style the parties can reap benefits of cost saving, profit sharing, quality enhancement and time management. Unifying all the parties into one team for a project, it also reduces transaction costs.

The intention of partnering is to change the commercial style in which contracts are managed. It demands a shift from concentra-tion on ‘hard issues’, such as price and the scope of work, towards

‘softer issues’ that revolve around attitude, culture, commitment and capability. ‘Successful partnerships manage the relationships, not just the deal’ (Kanter, 1994). The culture and attitude of its participants have to be changed to develop a single social network.

Ellison and Millar (1995) defined a four-level approach. From ‘arms-length adversaries’, the parties move to an environment of trust and communication, advancing to a ‘partnering/integrated team’

arrangement. The last step in this evolutionary chain is the most theoretical and difficult to achieve, a ‘synergistic strategic partner-ship’. Trust is the essential ingredient.

Partnering has been defined in a variety of ways:

Partnering includes the concepts of teamwork between supplier and client, and of total continuous improvement. It requires openness between the parties, ready acceptance of new ideas, trust and per-ceived mutual benefit …. We are confident that partnering can bring significant benefit by improving quality and timeliness of completion whilst reducing costs.

(Sir Michael Latham, Constructing the Team (Latham, 1994), quoting the Chartered Institute of Purchasing and Supply.)

Partnering is a long-term commitment between two or more organi-zations for the purpose of achieving specific business objectives by maximizing the effectiveness of each participant’s resources. This requires changing traditional relationships to a shared culture with-out regard to organizational boundaries. The relationship is based upon trust, dedication to common goals, and an understanding of each other’s individual expectations and values.

(Construction Industry Institute, 1991.)

The above definitions depict partnering as a generic term and emphasise that the relationship will cause all to seek win–win solu-tions, place value in long-term relationships and encourage trust and openness to be the norms, and that an environment for profit exists.

It is also a view that neither partner should benefit from exploitation of the other, innovation is encouraged, and each partner is aware of the other’s needs, concerns and objectives and is interested in helping its partner achieve them. It creates a team environment to accomplish a set of goals in much the same way that a sports team works together to achieve its goals. But perhaps the definition that provides explicit meaning, which is adopted for this chapter, is that by the Reading Construction Forum, in Trusting the Team (Bennett and Jayes, 1995):

Partnering is a managerial approach used by two or more organisa-tions to achieve specific business objectives by maximising the effec-tiveness of each participant’s resources. The approach is based on mutual objectives, an agreed method of problem resolution, and an active search for continuous measurable improvements.

This definition focuses on the key elements that feature promi-nently in partnering, irrespective of the form it takes, namely mutual objectives, an agreed method of problem resolution and continuous measurable improvements. Over the years the tradi-tional construction relationship has lacked any degree of objective alignment, and provides for no improvement in work processes.

Parties enter the project focused on achieving their objectives and maximising their profit margins, with little or no regard for the impacts on others. This mindset leads to conflict, litigation and often a disastrous project. The characteristics of such a competitive environment includes objectives which lack commonality and actu-ally conflict, success coming at the expense of others (a win or lose mentality), and have a short-term focus.

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The partnering process

The key to partnering is that it starts at the outset of a project (Matthews, 1996). The process is formally established in ‘workshop’

(or ‘kick-off’) sessions between the partnering members so that everyone has a clear understanding of what the process is and agrees to use it. As in any collaborative venture, all parties have to get together pre-construction and invest time into agreeing and under-standing the objectives, form and operation of a partnering agree-ment (Wearne and Wright, 1998).

A competitive relationship is maintained by a coercive environ-ment with little or no continuous improveenviron-ment. Points of contact between organisations are mostly single, which does not encourage good interaction, and culminates in little trust, with no shared risk;

this is primarily a defensive position. Thus a partnering relationship involves the essential elements of mutual objectiveness, problem resolution and continuous measured improvement. The Construc-tion Industry Board (1997), in Partnering in the Team, details these as being:

• Establishment of agreed and understood mutual objectives: the objec-tives are agreed and committed to at the outset of the project, and kept under review through meetings and effective commu-nications. They require long-term goals – sustained reasonable profitability rather than a quick killing. They benefit from ‘open book’ relationships (which also reduce the risk of corruption), treated with mutual confidentiality, resulting in the partners working for each others’ success. It works best between busi-nesses with similar cultures and styles.

• Methodology for quick and cooperative problem resolution: partnering sets up a systematic approach to problem resolution, seeking solutions rather than parties to blame; more and better discus-sion with less paperwork; more constructive correspondence, based on ‘win–win’ solutions; and equality of rights between parties. It requires mutual acceptance of the principle that adversarial attitudes waste time and money.

• Culture of continuous, measured improvement: partnering recom-mends that there should be specific quantified targets, mea-sured progress and periodically reviewed performance. It allows that competition is not the only way to achieve best value for money but is customer focused, adding value, eliminating waste, and identifying and aiming for best practice.

It is important to note that partnering by itself does not produce any value for the client, but requires the full participation and effort

of all parties involved in achieving the desired goal. It must there-fore not be misconstrued as:

• A new form of construction contract – it is a procedure for making relationships work better.

• An excuse for not working hard to get the best from suppliers and customers.

• A soft option.

• A quick fix for a weak business – strong players make each other stronger, weak ones destroy each other.

• Only about systems and methods – it is about people, enabling them to operate more effectively and efficiently.

• A panacea. Partnering will not prevent all problems in every contract. There may be some issues that must be litigated.

• Mandatory. Partnering is not a contractual requirement. It is a working relationship and if commitment is not present, it will not work.

Advantages of partnering

Partnering relationships offer advantages and opportunities specific to the individual members of the project team as well as the opportu-nities and advantages shared by each.

Benefits for client

Effective utilisation of personnel resources may be the most impor-tant benefit to the owner, in terms of both staffing requirements and available expertise. The client may also benefit from increased flexi-bility and responsiveness in terms of added skills and resources avail-able from other parties, from the presence of a diversity of talent not usually found in a single company, which will improve on delivery, and from reduced costs associated with contractor or consultant selection, contract administration, mobilisation, and the learning curve associated with beginning a project with a new contractor or consultant.

Other benefits to the client will be the reduced dependence on legal counsel, the development of a team for future projects and more control over possible cost overruns.

Benefits for design team

Partnering provides the design team with the opportunity to refine and develop new skills in a controlled and low-risk way. This occurs because new methods or approaches may be required to meet owner project requirements. Through partnering, the design team MANAGEMENT OF PROCUREMENT

will benefit from the involvement of contractors during budgeting, development of the team for future projects and optimal use of the design team’s time.

Benefit for contractor

Although a partnering relationship will not make a specific guar-antee of workload, partnering implies a clear intent to maintain an active functional organisation. The long-term, non-adversarial aspects of partnering mean that revenues may be more stable and the potential for the claims or litigation process is significantly reduced. The contractor may also benefit from increased opportu-nity for value-engineering involvement to provide value for money, faster decision-making processes, and more effective time and cost control.

Other benefits will include formation of teams for future projects, increased opportunity for financially successful projects, reduced dependence on legal counsel and the possibility of faster payments.

Benefits for the manufacturers and suppliers

As with the other team members, the benefits that manufacturers and suppliers stand to gain through partnering include approval of their product recommendation, a voice in the design intent, involve-ment in the coordination with other project trades and the possi-bility of repeat business. Other benefits are a better chance for quality in product installation and increased opportunity for finan-cially successful projects.

Mutual benefits

Of all the potential benefits resulting from partnering relationships, perhaps the one that will have the most impact on the construct-ion industry is improved project quality. An effective partnering agreement will improve project quality by replacing the potential adversarial atmosphere of a traditional owner–contractor–consultant relationship with an atmosphere that will foster a team approach to achieve a set of common goals.

Within this atmosphere of cooperation and mutual trust, the compa-nies can jointly determine and evaluate approaches to designing, engineering and constructing the project. By becoming partners in the project, team members can work together to achieve the highest level of quality and safety. The close, team-working relationship between the parties can provide an environment that encourages finding new and better ways of doing business. An effective part-nering relationship will encourage partners to evaluate technology for its applicability to quality improvement for the project.

The partnering relationship also encourages the companies to identify major obstacles to the successful completion of the project and to develop preventive action plans to overcome those obstacles before they impact schedule or cost.

Forms of partnering

Partnering can be categorised into the following forms: project partnering, strategic/full partnering, post-award project part-nering, preselection arrangement, coordination arrangement and semi-project partnering. These are shown in Table 7.1, and the key differences relate to relationship duration, basis of selection and the most appropriate conditions for application.

Post-award project specific partnering

This type of partnering is used for contracts that undergo the normal competitive processes but for which the intention to adopt a MANAGEMENT OF PROCUREMENT

Table 7.1. Different forms of partnering Forms of

Post-award One-off Competition Public projects,

including series of small projects Preselection One-off/long-term Negotiation Any project.

Advanced selection

Source: Institution of Civil Engineering Surveyors (1997)

partnering approach throughout the project is declared during the tendering process. Here the concept of partnering is applied under the main contract for a particular project. The partnering applica-tion is detailed as part of the project contract document and both parties agree to overlay their formal contract with a partnering

partnering approach throughout the project is declared during the tendering process. Here the concept of partnering is applied under the main contract for a particular project. The partnering applica-tion is detailed as part of the project contract document and both parties agree to overlay their formal contract with a partnering