Productivity improvement in infrastructure delivery is a discussion that comes up time and time again.
NSAR analysis identified six ways to decrease costs and increase productivity in infrastructure delivery.
- Avoid the cost of conflict and poor capability by creating an environment of efficiency.
- Avoid the costs of skills shortages.
- Stop restarting the learning curve on people, processes, products, contracts and technology with every project.
- Take the right risks and stop paying for excessive design redundancy and unrealistic risk transfer.
- Go digital to get the outcome without concrete.
- Use R&D and robust data to aid decision-making.
We know similar ideas have been put forward by others, and the industry broadly agrees on what needs to be done about productivity shortfalls. Despite this, little movement has happened. Productivity gains that were made in rail operations have levelled off.
The new Government is expecting at least 1.5 billion in steady-state savings. There are two ways this can be achieved. The first is cutting services – which neither the industry nor passengers want to see. The second way to create savings is investing in the right improvements so unit costs come down. It is a bit like spending more on a higher quality washing machine now, that will run better and last longer in the future.
But it is hard to know what to invest in. The TIES Living Lab has done an excellent job of showing how to drive efficiencies using data, technology and Modern Methods of Construction within live infrastructure projects. The other side of the equation is how best to invest in people to deliver productivity gains. NSAR data well documents where investment is required to upskill rail people to create a workforce for the future.
What is needed is the right environment in which to invest. Investment requires some level of confidence. Analysis shows that productivity gains need three years to be realised – which is difficult in an environment of 18-month contracts. The government and contracting entities could aid forward business confidence and productivity by offering longer contracts. The creation of NISTA, the Government’s new infrastructure body, will likely help with this.
In September, NSAR will be holding an event exploring some of the latest thinking on the diverse methods of improving productivity, and how to take advantage of emerging technologies. With speakers from the University of Oxford, the University of Dundee, Accenture, Morgan Sindall and RSA Insurance, discussions will include cost measurement and its effects on productivity, how optionality can improve government investment and how the insurance sector incentivises upskilling to increase productivity and safety, among other topics. It will offer practical thoughts on what government, clients, contractors and operators could do to support infrastructure productivity. We welcome you to attend.
Neil Robertson
NSAR Chief Executive