A closer look at an engineering enterprise
In order to deliver the certainty clients rightly demand, the construction industry must adapt – and quickly. At the same time, there are other challenges that make the case for change overwhelming: a protracted skills shortage that threatens to hinder the growth of the sector, the rising cost of labour and materials, and diminishing natural resources – all of this in the context of a growing global population in urgent need of an economically and environmentally sustainable built environment. The construction industry can – and must – devise solutions to these pressures.
The first – and most fundamental – step towards this change must be to improve the way in which clients and their delivery partners interact with one another.
This means moving away from the short-term, transactional relationships that are all too prevalent in today’s market, in favour of long-term partnerships that are founded on trust and a mutual understanding of common goals. Where, in general, the former is built by tendering late in the process and selecting on lowest price, the latter must be based on creating and delivering the greatest value, however that is achieved. When viewed through this lens, we can only conclude that traditional construction procurement models are set up for failure – on all sides – as is so often demonstrated.
If we are to address the numerous challenges we face as an industry, then surely innovation is the key. After all, we cannot keep doing the same thing over and over again while expecting a different, more successful, outcome. It is for this reason that early engagement between clients and their delivery partners is so vital as it is only really in the context of this collaboration that innovation can flourish, and a step change can be achieved.
Through this early engagement, delivery partners are better equipped to identify and develop the right solutions to their clients’ needs from the very outset, avoiding unnecessary risk, many loops of redesign, and the inefficiencies that too often emerge downstream by which time it is too late to effect decent change. Clients are becoming increasingly receptive to this approach, not just for these obvious reasons, but because it additionally allows them to keep the door open to innovative and improved methodologies that delivery partners are best placed to enable right from the beginning of their projects.
Our value proposition
Laing O’Rourke is making the necessary investment to transform the industry’s delivery model through its proven design – manufacture – construct approach. This new value proposition is based around four complementary capabilities, designed to make the construction process faster, more efficient, safer and more sustainable – and to make successful delivery far more certain.
These are: excellence in engineering; digital engineering; Design for Manufacture and Assembly (DfMA) and offsite manufacturing; and direct delivery.
We believe that by adopting an ‘engineering enterprise’ model, where we engage with clients at the outset of projects, alongside design consultants, we can drive a bespoke approach that is based around these four pillars, and can achieve the certainty that has until now been missing, offering a true value-based alternative to a traditional contracting approach.
Excellence in engineering
There is a huge depth of engineering expertise throughout the Laing O’Rourke Group and our engineering talent attraction and development programme is a core part of our model. As a result, we can work side by side with our design partners to find the right solution through early engagement, significantly de-risking design and delivery, and driving certainty for clients.
Our in-house consultancy, the Engineering Excellence Group, is available to all our clients and partners: offering research, innovation, advice and direction. When combined, this engineering resource works together with our design partners, through a unique operating model, to deliver step change certainty for clients.
Laing O’Rourke’s digital engineering platform allows us to examine every step along the journey before we build. Effectively, we build twice: once virtually and once in reality, creating efficiencies in project design, delivery, operational performance and asset management. We can refine the build process before we get to site, designing out the risks associated with a traditional construction approach. The digital engineering platform enables the whole process, right through manufacturing, and into assembly and operations, and that delivers certainty.
Working in a coordinated model environment improves design integration and reduces risk at the interfaces between disciplines. There is a quicker understanding of the impacts of change, which promotes informed decision-making.
Digital models assist timely planning and stakeholder approvals, streamlining the process and achieving better buy-in. Smart technology is transforming materials handling, product tracking and logistics and as such is far more than just a design-integration tool. Once on site, digital work-packs link our models to construction activity and this drives improved productivity. We provide easily accessible, accurate, real-time data directly at the work front, technology enabled.
These techniques also offer numerous benefits post-handover. Data in the digital model enables efficient asset management, allowing clients to focus on whole lifecycle value and performance in use. This moves the industry away from O&M manuals that sit in folders on the shelves to a real-time, interactive method of building operation, driving savings in energy use and maintenance.
Clients are able to adapt the building to changing needs more easily in a data-rich environment. An upfront investment in digital engineering, therefore, allows them to get maximum value from the asset over its lifetime, as well as deliver it successfully at the outset.
DfMA and offsite manufacturing
We will use DfMA and offsite manufacturing wherever it is appropriate, and beneficial, and we tune this approach to suit each and every project. Standardisation need not limit architectural ambition and we have developed smart ways of bringing a manufacturing mindset to a wide variety of challenges, in direct support of our designers unique visions. Around 60-70 per cent of a building is not visible and can be designed for manufacture. Where necessary the remainder can be delivered in a bespoke way to suit the design, in much the same manner that today’s cars are manufactured. A Seat and an Audi share the same platform, yet the manufacturer can still provide distinctive vehicles. Buildings are no different, although we have also now created ways to manufacture every piece and our palette of solutions grows all the time.
We manufacture offsite because it increases certainty. Our in-house manufacturing facilities offer stability of cost and surety of supply. Factory conditions are safer – and the output more predictable. Pre-assembled components can be tested offsite for rapid installation onsite, meaning more time can be devoted to the design and final commissioning processes. Reduced demand for onsite labour helps tackle the industry’s resourcing issues – and reduced activity on site minimises the noise, mess, waste and disruption usually associated with traditional construction methods.
By investing in new processes and technologies we do less work on site and more work in a controlled manufacturing environment. We can make construction more attractive to new employees and tackle the skills shortage by offering something different. We can’t attract people today in the same way we could in the past; people are more demanding about the environment in which they want to work and the skills they want to develop. Construction needs to recognise this and deliver in new ways, just as the professional services and modern-day manufacturing sectors do.
An integrated supply chain helps to control the quality and delivery of a project, just as it does in the automotive or aerospace industries. By using our direct delivery businesses and a directly employed workforce, we limit our reliance on external subcontractors and suppliers, and get greater visibility on true costs. We can be much faster, more responsive, and rectify issues more rapidly and effectively. It also offers better integration across all key disciplines – structures, MEP, logistics and manufacturing. All of this significantly de-risks the delivery process and, in turn, we deliver greater certainty to our clients. The vast majority of any project can now be delivered in-house through the Group’s divisions – Expanded, Crown House Technologies, Explore Manufacturing, and Select Plant. This gives security of supply in a market where there is a shortage of skilled labour and risk of insolvency further down the supply chain.
Our directly employed workforce receives the training and accreditation necessary to keep skill sets continually at the forefront of industry developments, and a ‘one team’ culture enhances standards both in the delivery and operational phases. Importantly, knowledge is retained within the Group, which supports continuous improvement and lessons learnt.
Adopting an engineering enterprise model
The key to unlocking the full benefits of our value proposition is early engagement. It is here that the line between traditional contractor and engineering enterprise is drawn.
Under the traditional model, contractor engagement occurs towards the end of the design phase, when it is often too late to impart any expertise or to make any meaningful changes that could otherwise drive significant improvements. The scheme is delivered according to the architects’ and design consultants’ briefs, with real buildability factored in only at the point of construction.
In contrast, when we apply an engineering enterprise approach, a delivery partner can not only influence from the outset, alongside design partners, but they can also embed new methodologies and approaches that drive real improvements in outcomes at a point in the process that allows it to happen. In the case of Laing O’Rourke this early dialogue allows us to deploy our full operating model and to deliver industry-leading certainty that shows the way to the step change that the industry needs to move forward.
Laing O’Rourke’s expertise encompasses the spectrum of development activities from shaping the investment model, project definition, design, manufacture, delivery, operation and decommissioning. This service can be tailored to meet the needs of each client, providing a solution that is perfectly aligned to their objectives but set up in a very different way.
At every point in the process, our focus is on developing long-term partnerships that achieve material benefits on all sides; delighting our clients by delivering faster, more efficiently and to higher standards – at an acceptable cost for clients and with acceptable returns for constructors .
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