SCOTTISH WATER CASE STUDY - Start Construction Faster - Get to Site in Half the Time (First Shovel in Ground)

BACKGROUND

Scottish Water is a statutory corporation that provides water and sewerage services across Scotland. It is accountable to the public through the Scottish Government.  

VISION Consulting (VISION) was approached by Scottish Water as part of an initiative to transform the time and cost efficiency operations of the business based on lean principles that would complement quality, customer care and environmental commitments.

CHALLENGES & OPPORTUNITIES 

The major challenges of the program were:

VISION APPROACH

VISION are known for their CbM programme, which builds on the power of lean principles to deliver transformational leadership, governance and cultural behaviour. They firmly believe that, in most organisations, more than 50% of the opportunity to improve productivity lies not in process and tools but in behavioural change.

VISION first introduced Scottish Water’s Mark Dickson, Director of Capital Investment at Scottish Water to Intel, to show how they had previously delivered a transformation at Intel’s semiconductor manufacturing site in Leixlip, Ireland and to demonstrate the potential of the project.

Before VISION began working with Intel, the spiralling cost of semiconductor fabrication was threatening to price them out of the market. Budgets were in disarray; talented staff were leaving and there was a growing culture of mistrust and hostility around the construction of the site. The work that VISION delivered resulted in an overall reduction in construction costs of 30%. Intel also reported an increase in value-added work productivity from 17% to 57%.

Scottish Water agreed that the best approach going forward was to apply Lean principles combined with VISION’s unique Commitment-based Management ™ approach to introduce a single shared risk and reward contract for all suppliers, transformational initiatives to encourage collaboration, and a firm focus on reducing lean wastes.  

SERVICE DELIVERY

VISION’s initial analysis identified several operational weaknesses that could be tackled rapidly to improve efficiency significantly. In short, these were as follows:

• Teams and departments were working in silos that required multiple handovers.

• Coordination was poor because their teams did not share the same commitments.

• The same approach and process was being applied to all capital projects regardless of scale or complexity.

• Many of the stakeholders had conflicting priorities.

• Decision making was slow.

• Progress was being slowed by an excess of deliverables and touch points.

One of the biggest drains on time, and one that related to several of the above weaknesses, involved compliance. Most people said that much of the work they were doing was simply to meet compliance standards. 

However, when VISION consulted the compliance team at Scottish Water, it became clear that many of the compliance processes that were being built into the design and planning of capital projects by others were not actually required. That revelation was symptomatic of the siloed character of the organisation and of the low levels of communication between teams leading to misunderstandings and several of the 8 lean wastes, particularly waiting. 

Building a powerful story

The solution was designed to complement Scottish Water’s focus on customers, the environment, sustainability, cost savings and reduced cycle times. It involved simple project goals that everyone could get behind. This included an original rallying call to ‘cut the time to get the first spade in the ground by half’. 

Crucially, the solution also applied lean principles to get everyone in the space of ‘I want to make the change that is needed’. Other important targets included a 30% reduction in costs and a reduction of carbon emissions towards Net Zero, both of which have subsequently been surpassed.

To make all of this happen, VISION designed five critical levers for Scottish Water to deploy five lean waste-cutting principles to maximum advantage. The five focused on were defects, waiting, unused talent, motion, and extra-processing.

Lever 1: Collaboration and behaviour

This involved establishing dedicated teams across companies and functions; enabling co-location where possible; introducing the language of action and commitment with clear procedures for decision making and coming to resolution; and a strong customer focus. 

Co-location obviously enabled cutting wastes from waiting (just walk over and talk), motion (all nearby), and unused talent (insights are necessary in every corner of the site). However, the biggest gain came from reducing defects. When people make and negotiate requests face-to-face, understanding increases, and that means less rework.  

Lever 2: Simplification

There was significant scope for relatively quick wins in this area. VISION helped Scottish Water to designate different kinds of project by size and complexity and then determine different sets of required deliverables. This change made a dramatic reduction in over-processing, which had been an enormous waste at Scottish Water. Over estimation of the requirement of compliance had previously driven this waste.

Lever 3: Production lines

In another drive to simplify procedures, the team took low-risk, low-complexity projects and put them through a standard, productionised process that saved significantly on unnecessary time and costs. These were called ‘conveyor belt’ projects. This change reduced all five Lean wastes in focus: defects, waiting, unused talent, motion, and extra-processing.  

Lever 4: Rolling planning

With rolling planning the people at various levels who will make the work happen revise the plan with the planner before acting on it. Plans that come out of such a process take account of all the often missed preliminary steps necessary for work and find filler work when people would otherwise be waiting. It increases productivity very significantly by cutting the Lean wastes of defects (done right the first time), waiting and unused talent, and, as a side benefit, reductions in inventory. With input from people in middle management and then the field, only the necessary equipment gets purchased. The team had not initially focused on that waste.

Lever 5: Measurement

VISION helped Scottish Water to focus on timelines and costs in order to define productivity, more effectively, anticipate breakdowns, and bring projects alive with daily and weekly assessments of progress. Again, this regular review of projects against expected numbers reduced defects, waiting, unused talent, motion, and over-processing.

OUTCOMES

VISION’s work with Scottish Water demonstrates how lean principles can deliver dramatic improvements in time and cost efficiency without compromising quality, customer care or environmental commitments. Over just two years, and across four categories of capital projects, the lean-based initiatives have driven time savings of up to 72% and cost savings of up to 66%.

CONTRACT MANAGEMENT

VISION appointed one of their in-house Directors, along with a VISION Senior Manager to lead the assignment, on a full-time basis, and to hold ultimate responsibility for the quality of the deliverables and an experienced senior manager to take day-to-day responsibility for the operational aspects of the project and to ensure that all KPIs were defined and adhered to.

This team established a collaborative working relationship, with clear communication protocols that actively support and enhance our relationship with Scottish Water. 

They  focused on delivering clear contract management procedures, including:

The VISION contract manager ensured on-going monitoring and control of our performance and the quality of services delivered measuring the services actually delivered against agreed commitments. 

This ensured transparency on the standard of the services supplied against the KPIs, we provided monthly progress reports and held regular meetings with stakeholders to discuss progress, issues and lessons learnt. 

Scottish Water required a flexible and responsive service. With the implementation of a formal communications channel with associated response times, this meant that requests were known to all team members and there was focus on responding in time. 

The team implemented a quality control programme that incorporated checklists, supervision within teams and signoff by the account director. This was complemented with client reviews and feedback and on continuous learning process. 

The team was drawn from across our business and was selected for their experience in working in collaborative client environments and with both internal and third-party resources. We delivered excellent coordination and efficiency by:

• Establishing peer working relationships.

• Establishing clear lines of communication, demarcation of tasks and project responsibilities.

• Establishing procedures for management of documentation and project collateral

Proactively taking ownership of issue resolution where this benefits the overall project through the Project Lead and fostering trust and positive working relationships.

CONTRACT PERFORMANCE

Cost savings of 36% on average across all workstreams

VISION’s lean-based strategy has since been rolled out across four categories of capital projects, with more set to follow. The time and cost savings across all four have been outstanding, as follows

There has clearly been a huge time saving and, already, a cost saving of £6.65m, which will continue to compound significantly over time. However, VISION’s experience, knowledge and expertise in the application of lean principles has also put transformational behaviours in place that will drive further efficiencies, collaborative breakthroughs and a powerful sense of shared purpose. And all of this has been achieved without any compromise to Scottish Water’s commitment to customers, employees, supplier relationships, the environment, sustainability or quality.