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Partnering in Area 21

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					PRODUCT
 development




                                  6
PROJECT
 implementation




                                12
PARTNERING
 the supply chain
PRODUCTION




                                       T
 of components




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 M AY 2 0 0 0



 Partnering in Area 21                                                                     CASE HISTORY
 Highways Agency, Mouchel and
 Accord Jarvis take Latham seriously
 A dedicated team drawn from traditionally opposing camps has rewritten the
 rules on how to maintain and operate a highway network. “It’s barely five years
 since consulting engineers like us got actively involved in highway managing
 agent work,” says Mick Priest of Mouchel. “Anyone with delusions of being The
 Engineer will not succeed in this business. I think we are witnessing the first
 steps in the ultimate merger of engineer and contractor functions into one
 company,” he predicts.

 “We were initially sceptical about the results we might achieve in partnering,”
 admits Nick Atkinson of the Highways Agency (HA). “But the team made a
                                                                                               we felt convinced we were on
 charter promise to work together for the benefit of our customers. I truly believe
                                                                                               the right road from day one
 that we are making near optimum use of our resources to spend public funds
 as wisely as possible.”
                                                                                                        Barrie Groves, Accord Jarvis
 Partnering in Area 21 arose after the Latham Report challenged
 the deep-rooted adversarial nature of the UK construction
 industry. Accord Jarvis’s Barrie Groves emphasises the
 importance of leadership in responding to Latham’s vision. “Our
 first partnering workshop included two chief executives and
 directors of the three organisations. They were enthusiastic and
 we felt convinced we were on the right road from day one,” he
 adds.

 Accord Jarvis and Mouchel have saved the Highways Agency in
 excess of £500k by converting garages into modern joint offices.
 This also provides a long-term asset for the Highways Agency.

 Benefits of partnering in Highways
 Agency Area 21
 Budget certainty – “We’re now delivering measured
 performance of the client’s requirements within 21/2 % of budget,”
 claims Groves. “Variations up to 15% were not uncommon in this           Area 21 leaders – Mick Priest, Nick Atkinson and Barrie Groves
 area.”
                                                                              Overheads are substantially reduced
 One stop shop – Prior to Area 21, HA dealt with 14 agents and                because the organisations share office
 contractors. Forming the Area reduced that to two and partnering             buildings, facilities and support staff. Accord
 cut it down to only one. “This has radically cut our administration          Jarvis estimate savings of about 5% in
 costs,” says Priest.                                                         preliminaries and HA and Mouchel gain a
                                                                              similar advantage. “That’s more money we
 Improved cash flow has been a major benefit to Accord Jarvis.
                                                                              can invest in the network itself,” says a
 Groves notes, “Previously highway maintenance work was afflicted
                                                                              pleased Atkinson.
 by big peaks and troughs. Partnering with HA and Mouchel has
 enabled much improved financial and resource planning.”

                                                                                           CREDITS
                                                                                           Term Maintenance Contractor –
                                                                                           Accord Jarvis
                                                                                           Client – Highways Agency
                                                                                           Managing Agent – Mouchel
CLIENT                        CLIENT                    PRODUCT                      PROCUREMENT
   INDUSTRY                      SECTOR                      TYPE                            ROUTE
Transport                     Public                    Road                         Main Contract – bespoke


Partnering in Area 21                                                                          How to make this
                                                                                               radical change in your
The Challenge
In his 1994 report “Constructing the Team”, Sir Michael Latham criticised                      business
government construction procurement policies, arguing that the industry’s                      Adopt these goals of a
behaviour was in part a reaction to that of the client. Industry change would                  successful road operating
require leadership from government clients. In 1995/96 the Highways Agency                     company:
terminated existing Agency arrangements with some 90+ Local Authorities, in
favour of 24 larger “super-agent” contracts. North London was created as Area                  s Budget certainty
21. Mouchel was appointed as Managing Agent and Accord Jarvis as Term
Maintenance Contractor under separate contracts to begin in April 1998. Initially              s Measured service delivery
sceptical, Highways Agency had made low key suggestions about partnering and                   s A fair price
a director level meeting was convened in January 1998 to ‘test the water’.
                                                                                               Abandon the traditional
Solving problems                                                                               ‘client-engineer-contractor’
As reported by other partnering ventures, the first and most important action to               mindset that sustains
address was leadership, with principles and attitude changes to cascade quickly                adversarial thinking.
down the ranks. This was achieved with frequent director-led workshops for key
people, with somewhat fewer whole team sessions. There is no avoiding the
communication and leadership issue - it was and remains the top priority.
                                                                                               Contact the innovator
Essential Key performance indicators (KPI) were jointly developed in workshops.
                                                                                               Mr Barrie Groves
                                                                                               Contracts Manager
What went wrong                                                                                Accord Jarvis
Some individuals came into the contract with ‘baggage’ that coloured their
                                                                                               Telephone: 020 8906 9222
judgement. It took hard work to show them the advantages or partnering. This
also applies to companies. Accord Jarvis has terminated a sub-contractor for                   E-mail: barrie.groves@mouchel.com
this reason. Accord Jarvis and Mouchel were too accommodating to each other
                                                                                               Links
and their customer by saying, “we can do that,” when they should have been
                                                                                               Mouchel: www.mouchel.com
more realistic and said, “no more.”
                                                                                               Highways Agency:
                                                                                               www.highways.gov.uk
Future development
Having successfully delivered the partnering concept with strong anecdotal                     Related Topics
evidence of success, further development will focus on measuring existing KPIs                 Visit the Construction Best Practice
and developing long term measures that address road network user satisfaction.
                                                                                               Programme: www.cbpp.org.uk/cbpp/
Mouchel and Accord Jarvis are exploring whether the joint venture is a suitable                themes/theme_list.html
business model for further contracts.


Innovation case history
This case history is a snapshot of just one innovation making construction in the
UK more profitable for the supply chain and the Client. Further details will be
found in the Knowledge Exchange or you should contact the Innovator
directly or M4I.


                                                                    The M4I Strategy Model applied to this innovation
                                                                      Drivers for Change          Improving the Project Process    Targets for Improvement
                                                                     Committed Leadership                                              Capital Cost
                                                                                                   Product        Partnering the     Construction Time
                                                                     Focus on the Customer       Development      Supply Chain
                                                                                                                                       Predictability
                                                                    Product Team Integration                                             Defects
                       M4I, Building 3, BRE, Garston,
                                                                                                                                         Accident
                       Watford WD2 7JR,                              Quality Driven Agenda          Project        Production of
                                                                                                Implementation     Components           Productivity
                       Telephone: 01923 664820;
                       E-mail: support@m4i.org.uk; www.m4i.org.uk    Commitment to People                                            Turnover & Profit

				
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posted:3/11/2011
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