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Property maintenance - a closed shop? PDF Print E-mail
Written by Harvey Laud, Nickleby, 2008   

Harvey Laud of Nickleby provides an overview of the first maintenance industry forum - and its associated report - where service procurers and providers showed a willingness to work together to overcome entrenched behaviours that mire the industry in waste and mistrust.

  • What percentage of annual maintenance spend is wasted, according to the report?
  • What foundations are needed for successful partnering relationships in property maintenance?

When two groups from opposite sides of the fence met recently at a venue in London, those familiar with the industry in which they work might have expected the atmosphere to be less convivial.

Indeed, the reason for the gathering grew from a piece of research that empirically confirmed concentric feelings of mistrust, scapegoating and unjust (sometimes dishonest), practice between two parties who admit to being forced into behaviours neither much enjoys.

Those present were a small sampling of Britain's beleaguered practitioners of maintenance; they comprised directors and managers of both service procurers and providers.

That the room hosted several empty seats where well-intentioned fee-paying delegates should have been, but were called elsewhere at the eleventh hour, is an example of what is greatly wrong with the way Britain's maintenance is regarded and executed.

A maintenance management company commissioned the research arm of Reed Business Insight's Estates Gazette to conduct research into the state of Britain's buildings.

Fifty senior property directors from large multi-site organisations together with 50 representatives from the UK's largest property maintenance contractors responded.

In most cases the groups were asked the same questions concerning priorities, waste, value, cost, compliance and procurement.

The results formed a damning indictment of an industry "riddled with poor performance, dissatisfaction and discontent, a 'claims' culture, and non-existent profit margins".

The results were published in a White Paper entitled Closed Shop? - Property maintenance in the 21st century, and the response from both press and practitioners alike encouraged the solution provider to offer what is thought to be the first platform for serious dialogue and open debate on this subject the UK maintenance industry has seen.

The Closed Shop? Conference and Workshop was held in a venue in central London on 4 June 2008 and was attended by public and private sector organisations and contractors from across the UK.

Sir Michael Latham, Chairman of the Construction Industry Training Board and The Collaborative Working Centre, and who provided the forward to the Closed Shop? White Paper, delivered the keynote address.

He began with the disappointing fact that since leading the joint government/industry review of the construction industry in 1993/94, which culminated in his report Constructing the Team, and the subsequent recommendations laid down in the Egan Strategy of 1998, very little had changed.

One of the key messages of his report was that inefficiency and waste amount to as much as 30 per cent of the capital cost of construction and that much of this waste could be avoided through co-operative working.

Compare that to the Closed Shop? report 15 years later, in which contractors state that nearly a fifth, £1.1bn, of annual maintenance spend is wasted, and their predictions that UK business could achieve a 39 per cent increase in employee productivity, equivalent to £261bn per annum, and shameful thoughts of a profligately and licentiously maintained UK sit uncomfortably with the idea of a world now racing to save its resources and itself.

Sir Michael went onto say that best value does not equate to lowest price and there was murmured agreement from the audience - from contractors squeezed on margins and from property and maintenance professionals who have a constant battle at board level in persuading executive members that planned maintenance is the only sustainable way forward.

Worse still, the research said contractors believe that in-house property managers are actually destroying the value of their own assets by cutting corners on maintenance.

More than half (53 per cent) of the property directors surveyed believed maintenance to be a low priority for most companies, and 56 per cent of contractors believed that businesses could make substantial improvements to the quality of their property management by simply investing in planned and preventative maintenance.

Contractors estimated that this investment could save 48 per cent of maintenance spend over the long-term.

Sir Michael described partnering as a major change that must come from the top and involve everyone in the organisation and insisted that training was an integral part of that process.

All parties (internal and external) must agree the objectives, align services with those objectives and continually collaborate, measure and fight for improvement.

Most importantly, procurers and suppliers must maintain an open book, with profit incentives and an equitable sharing of the pains and gains.

Something the Closed Shop? White Paper highlighted were the differences in perception between contractors and maintenance professionals when it came to allocating reasons for inefficiencies and waste in the industry.

Pete Andrews - academic and expert on the physical environment and its interaction or impact on the host organisation - of Positive Sum referred to this as second order reality (the socially constructed truth) in his presentation.

For instance, the research showed that 74 per cent of contractors believed that contracts were awarded on price but only 20 per cent of property directors believed this to be the case.

The culture of 'blame' was also evidenced in the research, where property directors ranked 'contractor's internal information and management' as the third greatest waste in maintenance, while contractors awarded their 'customer's internal administration and management' first place in the waste stakes.

Despite the slow take-up in partnering, Ian Callaghan, Construction and Renewals Director at Somerfield, gave a positive and constructive instance of how well partnering can work - the cost savings and the rewards in term of working relationships and incentive.

Ian described how Somerfield, in collaboration with a maintenance management company, had designed and built an environment for trust into their maintenance, and for over eight years now have worked with 25 principal contractors whose contracts are negotiated rather than re-tendered.

For Somerfield this means maintenance happens better, faster and smarter than before with less 'noise', fewer escalations and a saving of £30m in spend over three years; and the upside for the Somerfield contractor means stability, continuity and getting paid on time.

I began this piece by saying that, for the most part, neither providers nor procurers feel like winners in maintenance.

We're all aware of the commercial class system that relegates maintenance to its lowest ranks, and changing that attitude at board level can only be driven by customers and enforced by government.

However, change is afoot in the form of health and safety legislation, emission and carbon control.

One fifth of those property managers surveyed admit that their sites are not health and safety compliant and a quarter of the contractors say that they have been frequently or occasionally asked to ignore health and safety regulations, leaving corporations and individual directors at risk of prosecution - something that should be keeping the shareholder awake at night.

This and other points raised in the Closed Shop? research will heighten awareness amongst shareholders about commercial vulnerabilities and the many, many millions that leak from corporate Britain's collective bottom line.

In the interim, it will be those at the coalface who can begin to force change from the bottom up.

These are the people who know better than anyone the issues and impacts, and the conference workshop sessions really showed a willingness between contractors and maintenance directors to listen to one another; 100 per cent of the attendees concurred in whole or in part with the research findings.

Contractors say that trust comes with time and that only longer contracts provide the right environment.

Customers admit that they need to be more open and willing to share the risks. Every attendee wanted the opportunity to take things further.

As one succinctly put it, "If it's this hard to get people to wake up, getting into the upper quartile can't be that difficult."

Further information

Harvey Laud
Email: This e-mail address is being protected from spam bots, you need JavaScript enabled to view it
www.nickleby.co.uk
 
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