On time and on budget
Malcolm Dare, Executive Director – Commercial and Procurement, National Highways, talks to Danielle Kenneally
WHILE Malcolm Dare has only been in the industry for three and a half years, having come from an aerospace, defence, manufacturing background, he is doing his utmost to drive change in commercial and procurement attitudes in the highways industry; away from the ‘bid low claim high’ old style of doing business and towards contractors being accountable for delivering the agreed outcome on time and on budget.
He’s secured various awards, including, most recently, the Chartered Institute of Procurement and Supply (CIPS) procurement excellence programme ‘platinum’ corporate certification and is keen to bring his experience of working within numerous industries, including as a supply chain director at BAE Systems, which develops and produces submarines, and as an industrial engineering manager for Mars, to National Highways.
He’s already made significant improvements – a reduction in functional costs via a three-year improvement programme; an increase in employee engagement by 50%; and an improvement in supplier performance by 15%. In his own words, he develops and implements commercial, operations, supply chain and procurement strategies and delivers measurable bottom-line, carbon net zero, and social value benefits across the business and its value chain.
He talks to the Civil Engineering Surveyor’s Danielle Kenneally about the current challenges the industry is facing and how he seeks to overcome them.
Tell us about your role at National Highways.
I run the strategic commercial procurement side for the business, which includes looking at the supply base we have today versus what we need in the future. I help businesses with their internal production approach and thinking, so that they can improve and become better and more economically sustainable. I’m also involved with providing suppliers training opportunities through initiatives such as the Roads Academy – which is a joint scheme with the roads industry to develop current and future leaders and solve sectoral challenges.
It’s a really dimensional role – all things commercial, all things procurement, but the real exciting part is in how we change and shape industries.
You recently presented ‘More zero less net’ at Highways UK, alongside Adam Crossley of Skanska, what would your advice be to help remove problems of such a complex infrastructure provider?
It’s about the power of the sector and the passion that people have for it – we’ve got to learn to modernise and evolve our culture.
The industry is a bit traditional. It loves to talk about claimants, budgets, and contractual relationships. We’re constantly checking what’s been claimed and what people are claiming. What we have to do as a sector is mature and become more collaborative, so that the old style of claim/counterclaim is mitigated by how we invest our time, effort, and money.
The phrase I use a lot is ‘left shift’; we’ve got to think about how we do things, so that we are better at the design, better at planning, and better in the strategic procurement phase of construction. It would mean that when we come to deliver programmes on the ground, we will be delivering things on time and on budget.
Currently, the whole civil sector struggles in its delivery of being on time and on budget. My advice would be to focus on the basics and then left shift your thinking; involve the tier twos and tier threes more in the design, the production planning, the strategic procurement, and let that guide us into shaping how we buy and what we do. It would mean that by the time we hit a project on the ground, we know how to do it and things come in on time and on budget. If, as a sector, we can move to do that, we will, by default, improve productivity. If we improve productivity, we will improve our carbon footprint.
Is there any current thought-leadership industry research guidance on what needs to be done?
The Get It Right Initiative, or GIRI, is a group of UK construction industry experts, organisations and businesses who are looking to improve productivity and quality in the construction sector by removing errors. They showed that there’s about 20% of rework needed on a build – that’s essentially 20% of poor quality work that if we could lower, would reduce the project’s cost and, furthermore, carbon emissions. We’d also be able to demonstrate to the government that they can invest money with us. That would make the sector quite unique but it’s about the power and the passion that people have for it – we’ve got to learn to modernise and evolve our culture.
What can our members, who are involved in various different aspects of a build, improve on?
Collaboration, it’s all about collaboration – if all specialisms work together more closely we’ve already thought about and solved any potential problems before we go in on the ground. A good example that could be used more to help with this, would be digital rehearsals. Companies like Balfour Beatty have done digital rehearsals on projects and there is evidence that shows performance is significantly better.
The best example I’ve heard of using digital rehearsals was from BAM, where one of its companies was doing work in Antarctica for the British Antarctic Survey. In Antarctica, you can’t just nip out and buy a few more nuts and bolts from Screwfix, so it carried out a digital rehearsal on everything it was doing. It meant that by the time the ship docked with everything on, it knew exactly what it would be doing and how it was going to do it.
I’m told work started a bit late for weather reasons, but finished early because of the digital rehearsals. It knew exactly how it was going to do everything on the ground in a challenging environment. If we can do it on something similar, in an easier environment, we’ll all be part of the culture of delivering projects of quality on time and on budget.
How is National Highways measuring the intelligence and technical capability of the current workforce to know where the risks are?
If you take the National Highways employee population, each director understands what they need versus what they’ve got and what future skills are needed. It’s continuously observed during workforce planning. For my role, we talk to the supply base about what are they seeing because the reality is, we’re predominantly office-based and the work that’s done on the ground is done by the major contractors and the tier twos and tier threes. From these discussions, everyone is seeing challenges; workforce numbers, wage inflation and so on, but what we’re hearing and seeing and what we are actively trying to encourage, is the use of technology to drive productivity.
How is technology driving productivity?
The recently developed automated cone-laying machines are a good example – instead of having a crew of about four or five people, you have a crew of two people. Not everyone wants to work in the night in the wind and the rain. It’s not an attractive role and one way of addressing that is to automate it. It’s been done predominantly for safety reasons, but automating the role also means the scarce resource of potential employees can then be used in other areas where they may be more beneficial.
We’ve got to innovate and we’ve got to become more productive in what we do, and to be honest, that fits into the government agenda of driving productivity and growth, because productivity is not as good as where it could be.
Are there other challenges that need to be addressed, such as supply chain issues?
We simply have to take responsibility as a sector and drive improvements to help offset those costs.
There’s a lot of noise around supply chain issues but I don’t see enough evidence that supports the noise. For instance, when Cleveland Bridge & Engineering Company went under towards the end of 2021, there were some delays – beams delayed coming out of factories and going to different sources – but the amount of capacity in the industry just absorbed the loss of Cleveland Bridge.
People talk a lot about the rise in the price of steel, however, this is flattening now and falling. Also, if you go back 12 months, everyone was talking about timber – now there’s a readily available supply of timber.
What about in the highways sector, specifically?
We’re not seeing the level of noise that has been generated in terms of materials, however, we do have other challenges, well-documented inflation and energy challenges. Asphalt concrete, for example, requires a lot of fuel to produce and prices have gone up which has driven inflation. Inflation is probably the biggest single challenge we’ve got at the moment as a business. We need to generate savings from the elimination of waste, errors, etcetera, so that we can recycle the money that we have into supporting inflation.
We’re getting no more money to cover inflation, we have to deal with it within our current funding settlement, which for us is £24bn. It is why we’re concentrating on getting the basics right, driving productivity and improving quality to generate spare capital which we can use to help the supply base offset inflation. We simply have to take responsibility as a sector and drive improvements to help offset those costs.
The Geospatial Commission is creating the National Underground Asset Register (NUAR). Will this help National Highways in its quest to increase productivity?
There’s a lot of noise around supply chain issues but I don’t see enough evidence that supports the noise.We would love to see an accurate map that says where all the utilities in the ground are located. If the Geospatial Commission can help create that map, and people start feeding information into it, it would definitely help eliminate rework and increase the likelihood of projects being delivered on time and on budget.
The level of data analytics and technology is improving to the point where it’s catching up with the aspiration. It wasn’t long ago we were using handwritten maps; we’ve come a long way and it’ll definitely help. There’ll always be some human error that can’t be eliminated, but anything that can be done, which improves the understanding of what is in the ground, can only be a benefit. Knowledge like this will be powerful, but it will take time to build.
In terms of developments at National Highways, what can you tell us about your social value plan as you look towards the future?
We’ve just launched our social value plan, which outlines what we’re trying to do as a sector. I think as a sector we do a hell of a lot but I don’t think there’s a consistent way of adding it up. We’re using the Supply Chain Sustainability School metrics, which is used by many different sectors to report our social value activities in a consistent way. The intent of the plan is to add it up, standardise the report, understand it, and at the end of 2024-2025, we’ll commit to a social value plan for the next five years. I think we’ll be amazed at how much we’re actually doing but it’ll also show what else we can do.
What social value-related activities are you currently involved in?
We work with the Royal British Legion industries, with ex-servicemen and women, who produce road and rail signs of which we purchase the road signs. A lot of them are injured whether that be mentally or physically because of war and being involved in this work helps them return to normal civilian life. If we can help organisations like that, that add real value, it’s a win. Any profit then also gets reinvested back into the charitable organisation to help more service personnel.
The social value plan is a huge thing for us, and it will become more and more visible over the next couple of years, when we have the data to say what the sector has done. We’re keen to look to the future and improve how we operate and maintain ourselves as a government-owned company. We’re also keen to encourage the sector to modernise and evolve and become the best that they can be.
Malcolm Dare, Executive Director – Commercial and Procurement, National Highways, talks to Danielle Kenneally
