construction partnering: a case study & some issues tas yong koh feb 2009
Post on 20-Dec-2015
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TRANSCRIPT
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Why partnering?The industry’s characteristics
Commercial aspects
Hard competitive tenderingDecision based on priceConditions of contract
Multiple subcontractingLow investment in training
Operational aspects
FragmentationDiffused responsibility
TMOHierarchical nature
Macho environment
Adversarial industry culture
Mistrust Confrontational attitude
ConflictOpportunistic behaviour
HIGH WASTAGEHIGH COST!
“I am convinced that over half the cost of a project is socially
determined”- John Mather, NASA, 2006 Nobel
Laureates for Physics
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Why partnering?Ways of working not sustainable!To move forward and improve, we need to:• Increase harmony among clients, consultants,
contractors, and subcontractors• Address the critical relationships between
time, cost, quality, and safety
Partnering is recommended as a management tool to achieve the above!
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Definitions of partnering• National Economic Development Office, UK (NEDO 1991:5):
– A long-term commitment between two or more organizations for the purpose of achieving specific business objectives by maximizing the effectiveness of each participant’s resources
• Construction Industry Institute, US (CII 1991:iv):– Long-term agreement between companies to cooperate to an
unusually high degree to achieve separate yet complementary objectives
• Association of Project Management Hong Kong (APMHK 2003:4):– A commitment between two or more organizations to achieve
specific business objectives by maximizing the effectiveness of each party’s capability through cooperation
• Barlow and Jashapara (1991:3):– A variety of managerial practices and organizational designs that
enhance and maintain collaboration
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Definitions of partnering• No standard definition!• Defined mostly by its outcomes and processes• But, central themes are:
– Long-term commitment– Cooperation – Complementary objectives– Win-win(-win) attitude
• For successful partnering, need:– Attitudinal change– Managerial practices– Organizational designs
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Success factors and some issues
• Success factors:– Trust – Equity – Commitment – Improved attitudes– Shared understanding– Improved communication– Mutual goals– Joint evaluation– Joint problem-solving– Training and
maintenance– Incentives – Performance
measurement
Soft aspect
s
Hard aspect
s
Competing demands
Power relations
Cultural divide
Temporary settings
Some issues . . .
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Project description
ROUTE 8 SHATIN HEIGHTS TUNNEL & APPROACHES
• A direct link between northeast of New Territories and airport.
• The Contract involves:– 1.0km long dual three-lane tunnels under Shatin Heights,– Site formation for a toll plaza at a valley,– 0.6km long dual two-lane tunnel approach road in Tai Wai,– Two 1.0km slip road viaducts to Che Kung Miu Road,– Noise barriers and enclosures, – Slopes, and– Drainage, and landscape works.
• Tunnels runs through rocks!
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Project descriptionROUTE 8 SHATIN HEIGHTS TUNNEL &
APPROACHES• Client: New Territories East Development Office, CEDD• Commencement date: 18 November 2002• Expected completion date:
November 2007 • Contract type:
Engineer’s design, re-measurement contract with provision for price fluctuation
• Revised contract sum:
HK$1,196 million (?)
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CEDD partnering approach
• HKSAR Government’s initiative for public works contracts (since mid 2002)
• Non-binding, post award partnering approach• First deal with relationship aspects• Then develop tools and techniques:
– Procedures, processes, and systems
• Believes that:– Contract sets out legal relationships– Partnering process establishes working
relationships
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CEDD partnering approach
• Develop among the project team mutual strategy of commitment and communication
• Aims to create an environment of:– Trust and teamwork, co-operative bond
• Objectives:– More fruitful business relationship– Effective communication and decision structure– Supporting culture
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CEDD partnering approach
Mutual objectives
Trust
Problem resolution
CooperationCommitment
Continuous evaluation
Group working
Equity
Win-win philosophy
CEDD Key PartneringElements
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CEDD partnering approach
Start-up partnering
Steering group
sessions
Cascade workshops
Reviews
End of project review
Implementation flow chart
Pre-workshop meeting
One-day partnering workshop
Workshop type
Workshops for middle
management
Workshops for middle
management
Half-day review workshops
Half-day review workshops
End of partnering review workshop
Auxiliary activity
Partnering charter
Act
ions
track
ing
meeti
ngs
Soci
al events
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CEDD partnering approach
• A structured format to develop, foster, engineer, and implement partnering through:– Teambuilding exercises;– Signing of charter;– Facilitation workshops;– Problem resolution mechanisms; and– Continuous evaluation, monitoring, and
improvement of performance.
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Pre-workshop meeting
• Attended by senior managements of both the client and main contractor
• To develop and promote:– Understanding of partnering concepts,– Understanding of partnering
implementation process,– Change in culture, and– Commitment and rapport
Laying the ground works
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One-day partnering workshop
• Attended by senior management of all parties• Workshop aims to achieve:
– Commitment from the senior managements of stakeholders;
– Team spirit - team building exercises (e.g. Red/Blue Game);
– Mutual objectives – formation of Partnering Charter; and
– Improved decision making process – Problem Resolving Process, and Problem Resolution Matrix
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One-day partnering workshop• Key factors learnt from team building exercise:
– Cooperation is better than internal competition,– Selfish behaviours led to lose-lose outcomes ( BLUE
behaviours),– Necessary to take risk to help others ( RED
behaviours), – Groups are interdependent,– Trust needs to be built, and– Mutual understanding of rules and objectives.
Client
Designer Contractor
Client +Designer +Contractor
The worksT
o
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One-day partnering workshopObjectives of various parties:
Client Designer Designer (RSS) Contractor Time, budget, quality
Time, budget Job security Time, safety
Safety No disputes No complaints from Client
Reduced prosecution
Set good standard Profit No complaints from public
Reduced waste
Environmentally friendly
Improved reputation No quality problems No quality nonconformance
Minimum claims Recognition from Client
On schedule Alternative design / VE
No public complaints On time submission Cooperation with all
Auditable Smooth handover of work
Trust, no paper war!
Employment No accidents Profit
No claims Be successful
Sufficient site staff More experience / capability
Less paperwork Long term relations with all
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One-day partnering workshopPartnering Charter:
Mutual Objectives
On programme Within budget
Safety: Good quality:
Work environment Right first time
Low accident rate Minimize disputes
Environmental considerations:
Good public relationships
Environmentally friendly Early contract finalization
Reduced prosecution Sufficient resources
Less paperwork Time & cost saving thro VE
Long term thinking
Values and Behaviours
Trust Consideration
Fairness Honesty
Proactive Open-minded
Professionalism Understanding
Cooperation Respect
Communication
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One-day partnering workshop
• 4-way analyses of needs and expectation:– Each party lists needs required of other parties– Each party identifies typical barriers– Based on importance to achieve mutual objective 1, low to 10,
high importance– For example . . .
Client Consultant Consultant - RSS Contractor
Client -- Fast / accurate response to requestProactiveness
Close supervision Good record-keepingProblems anticipationEnvironmental aware
Quality product Contractual complianceSafety awareness
Contractor
Consider alternative designPositive reviews More flexibleSharing info
Quick response to proposal Early problem solvingClear and prompt info
Positive attitude Clear instructions Understand Contractor’s constraints
--
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One-day partnering workshop
Problem Resolution Process
• A model that emphasizes:– Common understanding– Joint problem solving
• Problem resolution matrix– Allocate responsibilities– Communication links – Sets time target
>> No stagnation of issues!
Clarify understanding
Define problem
Decide decision level + time limit
Create options
Propose option
Agreed?
Yes
No
Raise to next level
Aligning team to solve problem together
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One-day partnering workshopProblem Resolution Matrix
Process Client Designer Designer -RSS
Contractor Typical issues
Resolution time
Safety Proj Engr 1Proj Snr Engr
Engineer 1 SIOW Site managerSafety manager
Temporary works
Immediate
Design Proj Engr 2Proj Snr Engr
Engineer 2Engineer 3
RE or Res Geo-technical Engr
Engineering Mgr, PM
Temp worksSubcon approvAlt design
1 week2 weeks1 month
Quality Proj Engr 1Proj Snr Engr
Engineer 1 SIOW Asst Constrn Mgr, Agent, QM
Reluctance to rectify
2 weeks
Programme and progress
Proj Engr 1Proj Snr Engr
Project Engineer
SRE PM, Engrg Mgr
Delays to critical path
2 weeks
Cost and variations
Proj Engr 1Proj Snr Engr
Project Engineer
QS Constrn Mgr VO valuation 2 months
Environmental and public relations
Proj Engr 2Proj Snr EngrChief Engr
Executive Director
SIOW, CRE Site Mgr, PM, Env’t and Publicity Officer
Major complaint
1 week
Senior staff Chief Engr, DPM, PM
Executive Director
SIOW, CRE Project Mgr, Executive Director
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Partnering steering group
• Meeting held every 4 to 6 weeks• Membership comprises of senior management of
client, designer, and main contractor
Main roles andresponsibilities:• Provide role model • Promote partnering behaviours• Induct new members• Review and monitor performance
To promote partnering behaviours:• Promote model behaviours• Arrange workshops• Establish joint team• Arrange social events
Review andmonitoring: • Score aspects given in Charter • Reveal critical issues• Clarify differences • Better understand progress thro dialogue • Agree on actions
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Partnering steering groupReview and monitor performance – Partnering Scoring (Apr 2003)
MUTUAL OBJECTIVES A B C D E F G H I J
Safe environment and low accident rate 4.40 5 4 5 5 5 3 5 4 4 4
Complete to programme 3.75 4 5 3 4 4 3 4 4 3.5 3
Complete within budget & early finalization 4.30 5 5 3 5 5 4 4 4 4 4
Quality of work – right first time 3.80 4 4 3 4 4 4 4 4 4 3
Environmentally responsible without prosecution 4.60 4 4 4 5 5 5 5 4 5 5
Good public relations 4.60 5 4 5 5 5 4 5 4 4 5
Minimize disputes 3.90 5 4 3 3 3 4 5 4 4 4
Less paperwork 3.85 5 4 4 4 3 5 4 4 3.5 2
Time and cost savings through value engineering 4.10 4 4 3 5 4 4 4 5 4 4
Model site and long term thinking 4.10 5 4 3 4 4 5 4 4 4 4
Sufficient resources 4.00 5 4 5 3 4 4 4 4 4 3
Average 4.13 4.64
4.18
3.73
4.27
4.18
4.09
4.36
4.09
4.00
3.72
VALUES AND BEHAVIOURS
Consideration and respect 4.65 5 5 4 4 5 5 5 5 4.5 4
Professional and proactive 4.70 5 5 4 4 5 4 5 5 5 5
Honesty 4.40 4 5 4 5 4 4 4 5 5 4
Trust 4.20 5 4 3 4 4 4 4 5 5 4
Cooperation and communication 4.50 4 4 3 5 4 5 5 5 5 5
Fairness 4.55 5 5 4 4 5 4 4 5 4.5 5
Open minded and understanding 4.40 5 4 4 4 4 4 4 5 5 5
Average 4.49 4.71
4.57
3.71
4.29
4.43
4.29
4.43
5.00
4.86
4.57
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Partnering steering groupReview and monitor performance: Matching Needs (Dec 2003)
Client needs from: (Current performance: 1 low to 10 high)
Needs Performance Perceived barriers
Designer Early identification of problems 6 Insufficient resources
Formulate and evaluate viable options
4 Ditto
Quick and meaningful response 6 Ditto
Contractor Good planning 7
Adherence to target dates 6
Understanding client objectives 6 Communication
Contractor needs from:
Client Support for SA 4 Not proactive
Trust the Designer 3 Lack of trust
Assist in application of CNP ? Lack of active involvement
Joint problem solving 4 Lack of proactive attitude
Designer Quick decisions on temporary works design
2.5 Bureaucracy
Risk sharing and taking 2 Difficult to change
Reduce unnecessary paperwork 2 Bureaucracy
Joint problem solving 5 Lack of proactive attitude
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Partnering steering groupReview and monitor partnering performance (Dec
2003)• Assess and discuss on “what has gone well?”
– Teamwork and cooperative relationships– Quality – Safety – Environmental aspects– ENT North Portal and Toll Plaza site formation
• Assess and discuss on ”what has not gone so well?”– We are running behind schedule!– There is still too much bureaucracy and paperwork– Finalizing the supplementary agreements
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Partnering steering groupReview and monitor partnering performance (Dec 2003)Some key issues requiring improvement:• Joint problem solving:
– Definition: Problems not resolved quickly enough, cannot be resolved by one party alone etc
– Causes: Concentrate on reasons rather than solutions, solving problems for oneself only etc
– Improvement: Concentrate on solutions and deal with reasons later, establish joint group, close communication
• Construction planning: – Definition: Insufficient planning– Causes: Uncertainties over design, lack of experience in
foreseeing problems– Improvement: Employ more experienced frontline supervisors,
better risk management.
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Challenges and difficulties• Challenges for government teams working
on partnering projects:
Structural• No clear procedures• Lack of incentive• Lack of authority• Unclear line of communication
Structural• No clear procedures• Lack of incentive• Lack of authority• Unclear line of communication
Relational • Difficult trust building• Difficult relationship building• Arm-length treatment
Relational • Difficult trust building• Difficult relationship building• Arm-length treatment
Stakeholder • Conflicting objectives• Outside stakeholders’ challenge• Other departments not keen
Stakeholder • Conflicting objectives• Outside stakeholders’ challenge• Other departments not keen
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Challenges and difficulties• Changes made:
• Trading the REDs• Avoid throwing problems to others • Be open about own mistakes• No blame culture• Use less formal communication• Share good ideas from other projects• Include other authorities in the partnering
• Some RED behaviours reported:• Take risk• Sticking to promise• Give and take• Accepting responsibility• Showing trust in others
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Outcomes and performance
Meeting objectives
Improved communication
Speedier problem resolution
Improved quality
Fewer claims
Better public relations
Cost effective design
Better environmental concerns
Improved safety
BENEFITS
Possible budget surplus
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Our findings (1/3)
• Presence of partnering arrangement on project success:– Comparison across 28 success criteria; soft criteria and hard
criteria – No significant difference for almost all criteria except the
above two– “Information sharing” higher in “No partnering” projects!? – Difference is not very clear! – Partnering beneficial?
Means (N=376)
Item F-value Sig. No partnering (N=240)
With partnering (N=136)
Cost saving proposal benefits contractor
5.927 0.015 4.41 4.74
Open information sharing 3.195 0.045 4.99 4.73
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Our findings (2/3)
• Type of partnering arrangement on project success:– “Binding partnering” consistently higher rating– “Non-binding partnering” consistently lower rating; even lower
than “No partnering”!– Communicational benefits – effective meetings, info sharing, good
communication– Binding partnering better?
Means (N=373)
Item F-value Sig. No partnering (N=240)
JCT Non-binding (N=12)
Other non-
binding (N=84)
Other binding (N=39)
Meetings were effective 2.843 0.038 4.82 4.58 4.93 5.20
Stakeholders interests considered 3.375 0.019 4.82 4.00 4.52 4.92
Problems rectified at earliest stage 4.771 0.003 4.57 3.83 4.17 4.98
Open information sharing 4.088 0.007 4.99 4.33 4.57 5.18
Communication was good 2.770 0.042 5.25 4.50 5.11 5.48
Rectified mistakes collectively 3.951 0.009 4.72 4.17 4.63 5.20
Collective goals achieved 3.333 0.020 4.89 4.17 4.70 5.18
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Our findings (3/3)
• Type of procurement arrangement on project success:– No significant difference for almost all criteria except the above two
– Integrative procurement (e.g. design-and-build) fares better • No systematic trends on partnering benefits (Nystrom, 2008):
– Partnering as hygiene factor?– Still in “infancy” stage or “old habits die hard”? – Intangible effects – less stressful work environment, better public
image, improved communication, (slight) change in attitude?
• Possible missing link – survey did not ask for possible incentive arrangement!
Means (N=370)
Item F-value Sig. Traditional (N=129)
Integrative (N=92)
Mgt. contracting (N=104)
Others (N=45)
Cost saving proposal benefits client
6.340 0.000 4.28 5.02 4.52 4.44
Cost saving proposal benefits contractor
4.647 0.003 4.36 4.96 4.39 4.47
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Points of concern
Unitaristic entity
> Project organisation notunitaristic
> Different acceptance at different levels
> Competing demands e.g.collaborative vs
commercial relations
Benchmarks
> Social and economicpurposes
> Select easily achievabletargets
> Ratcheting up performance
Equity
> Risk reward arrangement> Unequal power relatione.g. difficult for Client to
give up their power> Difficult to agree formulae
for sharing
Project processes
> Use common standard orprocedures
> Overlook human andsocial elements in work
> Tensions between flexible partnering ways and control
Integration
> Structural and professionalculture divide
> Project temporary settingshinders trust development> Control or responsible
autonomy?
Feedback
> Tacit knowing in project> Discontinuity of project
organisation> After-the-fact project
review – details lost> Different propensity to
report on mistakes
Adapted from Bresnen, 2007
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Current practice• Multi-prong approach• Three main mechanism:
– “Gain share and pain share” arrangement– Project dispute resolution system– Promotion of collaborative environment –
partnering arrangement
• May augment with other initiatives, e.g. contractor design elements, project bank account, GMP, relationship facilitator, etc.
• Target main interest – monetary incentive• Use both hard and soft elements
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Over to you . . .• Your thoughts on the followings, please:
– The project parties encountered difficulties in building good working relationships and trust at the beginning of the project. What do you think were the causes and how do you propose to solve it?
– The objectives of the four main parties in the project are different. What problems do you foresee will emerge in the running of the project?
– The partnering approach is non-binding in nature. How do you think this arrangement affect the running of the project?
– What do you think are other factors that affect the level of cooperation in the project (apart from those already covered)?
– Which approach do you think is better in implementing partnering in construction: an engineered or evolutionary approach? Why?
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Success factors and likely problems
• Success factors:– Trust – Equity – Commitment – Improved attitudes– Shared understanding– Improved communication– Mutual goals– Joint evaluation– Joint problem-solving– Training and
maintenance– Incentives – Performance
measurement
• Likely problems:– Lack of commitment– Uncomfortable in
trusting– Lip-service– Win-lose mentality– Lack of perseverance– Commercial pressures– Not all parties are
included– Lack of empowerment– Inefficient problem
solving process
Soft aspect
s
Hard aspect
s
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One-day partnering workshop
• A proper start-up workshop for the partnering project two months after commencement.
• Attended by:– Senior management of the client, – Senior management of the main contractor, – Consultant and his resident site staffs (RSS),– Representatives of other interfacing government
departments (e.g. HyD, ICAC!)
• First three parties jointly formed a Partnering Steering Group.
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One-day partnering workshopClient’s needs to achieve mutual objectives: Client needs from:
Needs Importance Typical barriers
Designer Fast /accurate responses to client’s request and contractor’s proposals
10 Resources
Pro-activeness 10 Resources / training
Open minded 9 Attitude
Designer (RSS)
Close supervision 10
Good record keeping 10 Lack of training
Anticipation of problems 9
Environmental awareness 9 Lack of training
Contractor Quality product 10 Quality resources
Contractual compliance 10 HQs support
Safety awareness 10 HQs support
Early identification and notification of problems
10 Attitude
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One-day partnering workshopContractor’s needs to achieve mutual objectives: Contractor needs from:
Needs Importanc
e Typical barriers
Client Consider alternative design (Gain share)
10 Other govt dept procedures
Sharing of information (reports) 8Misunderstanding claims
Positively review performance/suggestions
10Communication channels
Linking Designer and Contractor 7Communication channels
Clear government internal bureaucracy
9 System/procedures
Flexibility in procedures 8 system/proceduresDesigner Solve the problem at an early stage 8 Resources/behaviour
Clear and early information 8 Resources/behaviour
Assume responsibility 7 Resources/behaviour
Quick response to alternative design 10 Openness win/win
Designer (RSS) Positive attitude 10 Resources/behaviour
Understand Contractor’s constraints 8 Resources/behaviour
Quick response 7 Resources/behaviour
Clear instructions 9 Resources/behaviour
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Partnering steering group
• Main areas of concern:– Agreed actions to promote partnering behaviours– Agreed actions to reduce waste and improve
processes– Review and monitor partnering performance
• Actions to promote partnering behaviours:– Promote model behaviours– Arrange cascade partnering workshops– Establish Joint Improvement Team at lower levels– Arrange team social events.
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Partnering steering group• Actions to reduce waste and improve
processes:– Examine re-use of excavated materials on site– Consider Contractor’s alternative designs (e.g.
retaining walls)– Reduce paperwork by encouraging team to
communicate more (e.g. discuss problem and confirm in writing)
– Review and streamline meeting schedules to reduce time spent on unnecessary meetings
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Partnering steering group• Review and monitor partnering performance:
– Members of Group, selected middle management, and front line staff score aspects given in Partnering Charter
– Score against scale of 1 (poor) to 6 (excellent)– Scores bring out critical issues– Gives better understanding on the progress as a
team– Clarify differences in perception – Steering Group monitors the scores– Discuss issues and agree on actions
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Cascade workshops• Project’s success depends greatly on the skills and
experience of middle management:– Day-to-day running of site operations– May lack overall perspective– Restricted by rules and practices from the past– May become bureaucratic, defensive, and adversarial
• Workshop for middle management• Membership comprises:
– Contractor’s engineers and supervisors– Designer’s RSS– Subcontractors
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Cascade workshops• Functions:
– To foster partnering culture– To promote the cooperative way of working– To get middle management’s commitment to the mutual
objectives– To get contribution on process improvement and waste
reduction efforts
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Outcomes and performance• Some success examples:
– Speedy conclusion of Supplementary Agreements– Early achievement of 2 major site formation key dates and
handover to interfacing contractor– Timely completion of access road for interfacing contractor– Joint resolution of blasting constraints enabling improved
progress of tunnel excavation– Joint resolution of difficult piling at the pier in close
proximity to KCRC railway tracks– Maintaining good public relation – only a few substantiated
public complaints!– Etc. . . .