Could Joint Ventures be Contributing to the Decline of Product Innovation in Civil Engineering?
I’ve been working as a Civil Engineer for roughly 10 years now, ever since leaving college at 18 years old. In that period of time, I’ve never felt that the industry has excelled in innovation, whether it be product, technology based or even in an organisational sense. I was recently discussing ‘lean manufacturing’ with managers across several industries and found it very difficult to recall any good examples from personal experience. I found this particularly upsetting as I have worked with some of the brightest minds in the country and worked on some of the most complex, landmark projects in the UK.
So why is the supply chain so stagnant?
I’ve already touched on one of the issues facing our suppliers and unlike other industries, this is one which does not allow for high volume, low variety tasks to be automated. Almost everything we do is bespoke and unpracticed, but the tools & materials we use rarely change.
‘Variety’ is (in my inexperienced and probably naive opinion) a challenge which can be overcome. I believe the main problem lies in a much less technical area, but one which can be improved upon. Traditionally, a supplier would be able to build a relationship with a contractor based on quality and reliability. This is slowly being blown out of the water through complicated commercial agreements between sub-contractors, principal contractors and clients. Even in my relatively short career I have seen the trust between key stakeholders disintegrating. The latest buzz word; ‘collaboration’ means that procurement managers and quantity surveyors who work for Clients are now more involved than ever before within a Project.
The problem this creates is instability within the supply chain.
For example, someone wishing to supply materials to the landmark High Speed 2 (HS2) project will first have the challenge of establishing who they are even selling to. Network Rail have formed a new organisation to oversee the works and each phase will be carried out by joint ventures who are supposed to operate as separate entities to their parent companies. This ensures multiple hurdles are in place for a supply chain already operating in an industry which operates on relatively low profit margins.
My belief is that the industry has become too commercial, with Engineers focussing more closely on contractual obligations than problem solving. If those minds were put to better use, I feel that cost saving efficiencies could be felt across all parties. So I put it to you, can we regain that trust and move towards an innovative exciting future? Can we reward our supply chain with long term contracts to ignite some creativity? I’m hopeful that we can!