Become a Creator today!Start creating today - Share your story with the world!
Start for free
00:00:00
00:00:01
E21: Plan Makers & Plan Takers in Construction Projects
34 Plays1 year ago
In this episode, Jason & Carlos chat about the spiralling costs of HS2 before diving into planning and the supply chain.
The two discuss how all project teams can be split into 'plan makers' and 'plan takers', and the impact that this has on how short-term planning is run.
Listen to find out if subcontractors and contractors should work on the same short-term plan.
Recommended
Transcript
Introduction to the Offsite Podcast
00:00:00
Speaker
Hello, and welcome to episode 21 of the Offsite podcast, where we chat all things construction and technology. My name's Carlos Cabolo. And I'm Jason Ladsini. How are you doing, Carlos? Pretty good. Thanks.
HS2 Phase 2 Cancellation Rumors
00:00:11
Speaker
How are you doing? In fact, New Zealand? Yeah, good. Back from New Zealand, come back to rumors, the bound of a HS2 phase two cancellation. Yeah, it's...
00:00:22
Speaker
Pretty full on at the moment. It's interesting. You kind of get it when they say costs aspiring.
Cost Escalation of HS2
00:00:27
Speaker
That's a bit of an understatement. So I read an article earlier and the original sort of price of the entire scheme, including phase two to Manchester.
00:00:38
Speaker
in like back in like 2010 was 30 billion. We've now spent 22 billion. And we've only really done like less than a third of phase one. Yeah. So in 2010, it was 30 billion for everything.
00:00:54
Speaker
2019 it was 45 billion for London to Birmingham and now it's 120-130 billion. I don't think anyone can blame inflation for that. They just had no idea. Part of me thinks is you're letting these major contracts go and you're not really coordinating.
Managing Large Contracts and Milestones
00:01:12
Speaker
If you really thought of it as one project, it must be easier to manage milestones and relationships and like collaboratively go towards this end game. But it's so fast, like a delay on one of these sections. The other contractors then kind of like utilize that delay to their advantage maybe. And then everyone's just sort of increasing their time and cost allowances as they go. So as a client, I don't know how you manage that.
00:01:35
Speaker
So when you said the cost estimate of 20 something billion, what year was that? 2010. So 2010, if we go back to 2010 era, well, I don't think this chart that I'm looking at goes back that far, but we're talking like UK like government, treasury, like the guilt price, 10 year guilt prices.
00:01:59
Speaker
I don't know, low single digits, as far as back as this chart that we go is like two, 3%. Like that's over 4% now. So even if there's like a, all my, let's just say conservatively one half, two times price escalation in terms of the cost of the debt and then the actual cost of the project going up five times, that's like a 10 times escalation in there.
Economic Impact of HS2
00:02:22
Speaker
The overall like interest costs of that project. It's um, yeah, it's a lot of money. It's like, it's like a house renovation project and you go to start them and suddenly it costs 10 times more. You're going to probably, uh, forego the extra bedroom and bathroom, right? Yeah. Yeah. Yeah. You're going to cut out the post-tiles anyway. Yeah. In addition from 2010 is, um, 47%. So.
00:02:46
Speaker
To go from yeah, 30 billion to a hundred and something like it's mismanagement. It's, but yeah, it's not, it's not just the price escalation. It's like the change in the change in the price of servicing the debt in combination with it. Yeah. Yeah, absolutely. Yeah.
00:03:06
Speaker
Not good, but fingers crossed, it looks like a lot of chief executives of major contractors are righted to the government. It kind of kicks against all the plans to bring jobs to the economy, all the sort of usual arguments that government are sort of fighting for. They're then stripping away the biggest projects in the country, which is providing tens of thousands of jobs. So who knows? You just have to sit back and watch.
00:03:28
Speaker
You can't pay for it. You can't pay for it. I don't think that's the end of the, if you can't pay for it at the bottom line is you can't pay for it. So I don't know what the real estate is. And I hope it goes ahead. Obviously the cool project, but, um, yeah, you can only, you can only spend what you've got.
Supply Chain Planning in Construction
00:03:43
Speaker
Yeah, for sure.
00:03:47
Speaker
That was probably way more interesting than our usual terrible jokes. So today we're going to have a discussion on planning, a similar theme to last week, but today we're going to focus on supply chain. To bring sort of the broader context to this, every project has a master schedule. It's owned by planners that plans jobs from beginning to end, set of activities, milestones and everything else that goes into that.
00:04:11
Speaker
Subcontractors also produce their own master schedules, so on major jobs they will also have probably a p6 raster file which shows their program from beginning to end and there's a routine each month that the planners from the sub projector are submitting to the planners from the main contractor and in theory they're incorporating that update expertise and everything else into their own schedule so the two should be aligned.
00:04:34
Speaker
Concurrent to the master schedule process, we've got short term plans. You've got engineers for the contractor, building, owning, maintaining short term plans. And then you usually, I say usually because maybe for a real small subcontractor, they won't have a requirement to do a short term plan, but they'll have their own version. And in these contracts, it will probably just say, you will submit a full week look ahead in whatever format you'd like.
00:04:57
Speaker
That's a typical makeup of a project, but the question I want to discuss today is should the subcontractors be working in the same short-term plan as the contractor staff?
Subcontractor Planning Debate
00:05:10
Speaker
So instead of this double handling of here's a look ahead and the engineer might take the look ahead and incorporate some of that into their own look ahead, which then is part of the project look ahead, should the subbies and the contractor staff just be working together? The subbies own the tasks and the contractor staff are effectively monitoring those activities.
00:05:28
Speaker
So to kick off, Jason, what do you think?
00:05:31
Speaker
I think that's definitely an interesting question. I have like a follow-on question to you, but let me actually respond to yours first. I think that in most projects, it all comes down to relationship between the general contractor or the main contractor and prime contractor, whatever country you're in and the subcontractors. And generally you could bucket those relationships or that subcontractor into
00:05:58
Speaker
I like to think of it as one of two categories really, like a plan maker and a plan taker. A lot of projects you might have, if we take like a typical infrastructure project, let's say you've got, let's say a HS2.
00:06:15
Speaker
A section of HS2 might have a large piling contract that some stuff contracted. That piling contractor probably has this relationship where they build a plan that says, here's how we're going to look at the piling scope as quickly as possible and as officially as possible. And more than likely they are a plan maker where they're kind of.
00:06:35
Speaker
The prior Lloyd contractor's goal is to give them the things they need, make sure they're complying with health safety, quality, et cetera, but basically get out of their way and let them do it as quickly and as efficiently as possible. Whereas on the same project later on in the scope, you might have a
00:06:51
Speaker
I don't know, like a steel fixing or a form work or an FIP type subby who is on, I guess, a more intricate scope, maybe doing this slab over here than doing this pile cap over here, sort of going where the work is available, where the work fronts are available. And they are probably more a plan taker. And so depending on what that relationship is, we'll dictate how I guess the short term planning would happen in my experience.
00:07:19
Speaker
And it's the latter type that they're the ones that are going to be kind of more integrated into the short-term planning process of the main contractor. If you were the engineer managing the example of the pilot contractor, are you taking that plan and just, this is the plan, or are you sort of burning time, putting it into this sort of format and the schedule that the main contractor uses across the board?
00:07:45
Speaker
Usually the, well, not consistently, but many of the plant maker type relationships are really at the very early at the start or right at the end of a project, like a piling contractor or I don't know, maybe a big sit out and contract or something.
00:08:01
Speaker
It's, well, what am I saying? I think what I'm saying is it does depend on the interfaces with other stuff happening at the time. So like if I've got a piling contractor on site and at that time we're maybe doing some vulgar action, some early symbols works or something. There's probably less interfaces that they have to do.
00:08:21
Speaker
be aware of, in which case I probably don't need to double handle their planning as much.
Value of Subcontractor Plans
00:08:27
Speaker
And as long as there's some level of coordination meeting that they're attending, it's probably easier to manage. If the plan maker is
00:08:36
Speaker
at a different stage of the project where there is a lot more interface. That's when you, you know, if we think about like pushing out stage of a station or something, you've got a couple of different plan makings on the, on the site at the same time, maybe like a big electrical, maybe a big sit out subby.
00:08:55
Speaker
That's when the main contractor is going to be really active in managing their planned work and the short-term planning logistically and who can go where and understand obligations and what's critical for the project. If I'm the engineer, I'm not double handling that team's plan because it's still busy work.
00:09:16
Speaker
I'm going to have them plan in a format and an instruction that is consistent between those subcontractors so that we can just have the conversation that we need to have that says, okay, room to be, we're doing this and that conversation.
00:09:32
Speaker
Yeah, the sort of bottom up planning approach with subcontract, your major subcontractors together makes a lot of sense. Cause ultimately it's just encouraging transparency and collaboration because everyone is aware of each other's programs and you're all leaning towards that sort of same milestone or, uh, the other thing to be super, the other thing to be aware of Carlos is like a lot of times in some situations, the plans that your subcontractors send.
00:10:01
Speaker
uh, well thought through and represent reality of what they're going to do. But I would say again, in my experience, probably that's in the minority, like a lot of the, in the same way that like a contract is, if I'm an engineer on a project and I look at the master schedule, I'm like, okay, that's a nice idea of how we'll build it. But it misses a whole bunch of the constraints of what is actually happening on site.
00:10:23
Speaker
A lot of the plans submitted by subcontractors, they're doing it on Austin because it's a contraction requirement of the contractor and they might hire a finding consultant to do the plan for them just to check the box that they've complied with the contract. That results in those plans being this shit in, shit out type of thing. And so I wouldn't be spending a huge amount of time trying to be like, oh, what do they mean by this and this here and that.
00:10:52
Speaker
Yeah, it's kind of things you work also. I wouldn't be trying to assess it. Like a client assesses a close date to submission, like fine to comb more of a contractual point of view rather than a, is this achievable kind of thing. The niche that kind of.
00:11:09
Speaker
It confuses me isn't the word, but surprises me is a project that goes top
Planning Approaches and Schedule Pitfalls
00:11:14
Speaker
down planning. So they're importing data from their master schedule, but they distribute those tasks to users who are subcontractors. And if you're the subcontractor and you're being given a program from the main contractors program, and that program isn't back to back to your master schedule that you've submitted. It's a really weird place to be, isn't it? Because you're breaking down a schedule that you didn't build or create or own.
00:11:36
Speaker
And you're adding detail to it. Are you surprised that that is the makeup of some projects? It probably goes back to, in some situations, yes, but it would probably go back to again, the relationship between the contractor and the subcontractor. Because if the relationship is contractually flexible, where it's like cost reimbursable or something, it's almost irrelevant what's in that main schedule and the goal is to help the contractor deliver the work that they want delivered.
00:12:03
Speaker
If I was working, if I was the subcontractor on that, like say a hard dollar scope, I would really want to plan to my, I'd want to execute to my, like then mostly they do what I execute to their schedule. But then it comes down to sometimes like the contract, like projects can set themselves out. Like head contractors can set themselves up for an unsuccessful outcome by doing literally like being incompatible with like the schedule and the contracts. Like.
00:12:31
Speaker
letting a scope that they want the subcontractor to be a plan maker and say, we want your expertise, give us the most efficient way to do this. And at the same time, jamming a whole bunch of obligations in their contract. And so as you must coordinate and, you know, you know, the classic pause is that people like you Carlos, the commies fans and stuffs bang people around the head with, you must coordinate with other contract, you know, that talks
00:12:58
Speaker
Those shitty lines that you whip out at a meeting and everyone just looks at you like, yeah. Yeah. It's, um, there's definitely this separation between contractual schedules and like programs for delivery. So that's definitely, it's, it's an odd place to be. I'm definitely all for your major subcontractors.
00:13:18
Speaker
planning with the team and not just once a week, here's a program. And then you go away for one or two days and try and work out, is it achievable? Does it align with our milestones and our broader plan and lots of back and forth, incorporating them fully into the process and just being transparent around anything and not trying to hide information because a short term client shouldn't be a opportunity for like a QS to throw an early warning, like
00:13:45
Speaker
That's not what it's for. This is the latest update on what we plan to do. And the contractual schedule can stick, could be that mechanism for extension of time and all the other things that come along with the contractual schedule.
00:13:57
Speaker
Yeah, it's interesting because so many different projects do it in different ways. But the subcontractors, the same way that like many contractors can use the short-term plan to their advantage, the subcontractors can as well. So I was on a, I was at a project recently here in Australia and they were talking about their use of the short-term plan to drive action from the client and doing things like
00:14:21
Speaker
You know, projects that use the plans of that advantage plan really well in the short term. They flag what the requirements are, the things that they need from whether it be the client or the head contractor. What do I need in order to deliver this work?
00:14:33
Speaker
Uh, and then, you know, just as like client or the head contractor likes to hold the person during the client's account, you can use it in reverse and the subcontractor or the contractor can say, you know, I needed this approval. I needed this design back by these dates. You didn't get it. Like it's a two way street and the short term plan is really powerful at driving accountability into directions. And so I think that's, uh, it's not just something.
00:14:59
Speaker
You know, lots of people view it as I'm going to get a plan and then the client or the project is just going to smash me around the head with it. But it's, if, you know, if planning is done well in that way, like let's say it's like an offensive as well as defensive weapon or probably a better term is to say it's like a useful tool rather than like a, a chore.
00:15:20
Speaker
Yeah, it should be a useful tool to improve outcomes because like there shouldn't be massive surprises because everyone was part of the discussion throughout the course of the project. Yeah.
00:15:35
Speaker
Yeah. Cool. And so much of construction is like played and is the things that really frustrate construction projects at those margins of things that I'm responsible for versus things you're responsible for. And I can't go ahead because you haven't given it to me. And that like really, um, that short term planning process that it makes it really clear. Okay. You're doing this. I'm doing this. I need this by this day.
00:16:03
Speaker
Uh, it's a really powerful way to, to work through those, those issues and drive better collaboration. But like you said before, setting the ground rules really early on on a project that says we're doing this process to try and jointly deliver the project as efficiently as possible, not as a way to have an argument and to send letters to each other and, and to, to, to be another mechanism for contractual. Yeah, absolutely.
00:16:33
Speaker
Right. You had a question for me. Did I? That was, that was temporary. That's well beyond the statute of limitations of my memory. I guess you forgot.
00:16:48
Speaker
No, there was one which is, it goes kind of back to a similar relationship between short, the subcontractor's plan and the main contractor's plan, but in relation to the master schedule, do you think it's valuable? Well, not do you think it's valuable, but like, what is your view on this like workflow where subcontractors submit, you know, clause 32 in the UK, submit that like monthly schedule update at their master schedule?
00:17:15
Speaker
to the head contractor they review it they accept that they reject it then they are doing the same thing with the client and in a lot of cases never really change because the main contractor doesn't want to keep changing the structure of the master schedule because it kind of makes it harder to establish claims and it messes it if they bring detail from the subcontractor into the master schedule.
00:17:38
Speaker
What is the point of the subcontractor doing that work for it other than the fact that there is an NEC or a contract that requires it? Is it busy work or is it valuable?
Contractual Schedules and Project Time Management
00:17:47
Speaker
Obviously with my QS hats on, it's needed because otherwise how do you access extensions of time and everything else? Because it's not just, oh, your program's gone out. I'm going to pay your prelims for another week because they could be on fixed costs. They could be on a target contract.
00:18:02
Speaker
You need a benchmark. It's definitely busy time. And obviously you're always playing the game with the above. You never want to kick out time for anything that doesn't have an instruction. And for anything that does have an instruction, you want to kick it out as far as possible. You're, as a main conjecture, you're in this middle ground of balancing the two to make sure that you end up in a favorable position.
00:18:23
Speaker
Like, for example, I would, and I'm not a planner and a planner would probably disagree with me, but I don't think I'd want a P6 schedule from a supply chain member, unless they seriously had like some of these contracts and cross route, for example, like a hundred million. That kind of makes sense. You just want to know their plan, any deviation from milestones and like where they're moving to different phases of the project.
00:18:45
Speaker
Like that's the useful information that you need to know from their schedule. You don't need to know what they're doing every shift. If you're a planner, try to assess program submission. That's the information that sits in the short-term plans for the team actually delivering the job and understanding of what their plan is each day. So there's definitely a point in scale where I think like you need that extra level of
00:19:10
Speaker
details probably the wrong word, but you need a P six with Astor. But yeah, I think it's harsh when you demand a proper program submission from like a hoarding contractor. Cause all they're doing is going and paying consultants to plug in what they had in Excel or MSP into P six for the sake of a submission. And so much of their delay is like access to areas and stuff. Like I just think that the way that I've seen it happen in the UK is.
00:19:37
Speaker
some of the most inefficient use of time where we have this process where the schedule gets reviewed between the client and the contractor. Then it happens 10 times, 20 times, 50 times with each of the subcontractors because we've applied the same contracting model and the amount of schedules needing review and being stupidly rejected because of dumb technicalities with
00:20:02
Speaker
how, you know, negative lag or, you know, those things, they just don't like the outcome. Yeah. And so it's just the whole thing feels like a giant waste of time. And there's probably just a set of dates, like access. It does depend on the size of the sub contract, but generally I think it's like from what I had seen and what I've seen there, especially in the UK, I find most of it to be a waste of time. Anyway, that's a positive light to end on.
00:20:32
Speaker
That's all we have time for today. As always, thank you very much for listening.