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Reducing Costs and Improving Results for Refurbishments Shaun Aldis Director of Property Services
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Reducing Costs and Improving Results for Refurbishments Shaun Aldis Director of Property Services.

Jan 04, 2016

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Page 1: Reducing Costs and Improving Results for Refurbishments Shaun Aldis Director of Property Services.

Reducing Costs and Improving Results for Refurbishments

Shaun Aldis Director of Property Services

Page 2: Reducing Costs and Improving Results for Refurbishments Shaun Aldis Director of Property Services.

Context 3 Partners £410m over 5 Year’s (currently in year 3) Circa 24,000 occupied properties Scope of works: Kitchens, bathrooms,

central heating, electrical rewires, external improvements including insulation and combination of the above to high rise

Page 3: Reducing Costs and Improving Results for Refurbishments Shaun Aldis Director of Property Services.

Challenge Shortfall in delivery £47m* Local employment (highest in West Midlands) High expectations: promises made Huge mobilisation 750 employed on contract

excluding supply chain Is there comparity between the three partners on

the triple bottom line? What is the true cost of delivery? Management of the day to day cost activity? Would you spend your money this way?

Page 4: Reducing Costs and Improving Results for Refurbishments Shaun Aldis Director of Property Services.

KEY PHASES OF PARTNERSHIP

PHASE 3HIGH

STRATEGIC VALUE

PHASE 1DELIVERY

PHASE 2ADDED VALUE

TRUSTTIME

Page 5: Reducing Costs and Improving Results for Refurbishments Shaun Aldis Director of Property Services.

What did we do?Efficiency Programme

Strategic Overview Bottom up: Think - Plan - Do Vision for the future ~let your imagination run away Don’t focus too hard and predict the outcome

Christopher Chabris and Daniel Simons (1999) perception test

Avoid dramatic change Health Check Understand your base line Sweat the details ~succession/scenario planning Keep it real ~ challenge Where do you need to be?

Page 6: Reducing Costs and Improving Results for Refurbishments Shaun Aldis Director of Property Services.

Efficiency programmeHealth Check Findings

Reasonable cost comparators Varying costs between each partner Varying costs from supply chain for the

same product Component frequency replacement Inward investment Refusal rate Delivery model to accommodate PRADA

Page 7: Reducing Costs and Improving Results for Refurbishments Shaun Aldis Director of Property Services.

Courtesy of Chartered Management Institute

Page 8: Reducing Costs and Improving Results for Refurbishments Shaun Aldis Director of Property Services.

Lead from the top Developed cash flow forecasting model Shared outcome and cashable efficiencies Cost/value reconciliation for each partner: OBCM, Full

supply chain integration, KPI incentivisation Review material specifications and guarantees Consistency review, frequency replacement and quality Introduced ‘lean’ Improve customer satisfaction Incentivised what matters

Efficiency programmeAction

Page 9: Reducing Costs and Improving Results for Refurbishments Shaun Aldis Director of Property Services.

Efficiency programmeOutcomes 20% overall savings by each CP through lessons learned

and best practice sharing across the partnership Adoption of target cost mechanism and KPI incentivisation

on gain share, led to improvements Total TSQ’s rose from 94% to 98% Incentivised local employment (increase from 22% to 32%) Rigorous application of lean techniques to reduce time in

property (properties completed in less than 25 days moving from 88% to 97% across partnership)

Reduced number of days in property from 25 to 15

Page 10: Reducing Costs and Improving Results for Refurbishments Shaun Aldis Director of Property Services.

Efficiency programmeOutcomes Equal vigilance in reviewing the in-house structure for

managing the DH programme has resulted in WH commissioning costs running at 2.7% of total costs within top quartile performance of 3%

Partnership is applying the WH ‘Refusal Protocol’ robustly and refusals are currently running at 6%

Continued Director level involvement in integrating supply chain “CWC UK – keenest prices seen nationally”

Some of efficiency savings have been absorbed by introduction of enhanced improvement justified on basis of reduced whole life costings e.g. rewire versus partial rewire

Page 11: Reducing Costs and Improving Results for Refurbishments Shaun Aldis Director of Property Services.

Efficiency programmeOutcomes

Following consistency review: improved scope of survey reliability has seen more efficient delivery being achieved with preliminaries as low as 8.8%

Materials management reviews have led to cost reductions between 20% and 35%

Reduced snagging Improved information to tenants Improved knowledge on stock ~no surprises

Page 12: Reducing Costs and Improving Results for Refurbishments Shaun Aldis Director of Property Services.

What next?

Ice Berg Effect

Page 13: Reducing Costs and Improving Results for Refurbishments Shaun Aldis Director of Property Services.

Questions

Shaun AldisDirector of Property ServicesWolverhampton [email protected]