An evaluation of partnership development in the construction industry

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Abstract

Improving the effectiveness of projects, particularly in construction, is of interest and concern to practitioners and academics alike. To this end, the use of partnering, now commonplace in a variety of industry sectors has been encouraged in the UK construction industry. However, in many respects project environments represent the antithesis of current thinking in partnership development and an unusual and difficult application, particularly at the lower levels in the supply chain. This paper, therefore, is concerned with evaluating the progress the UK construction industry has made in its adoption of partnering, how it is likely to develop in the future and what the implications might be for the industry’s suppliers. The partnering experiences of Main Contractors with Main Subcontractors for structural steel products are examined and a conceptual framework of the success factors presented and discussed. Critically, clients and not suppliers were found to be major barriers to the industry’s adoption of partnering.

Introduction

A study by Burnes and New [1] revealed many examples of the ways in which different industries and organisations have sought to use collaborative relationships. Examples of the benefits realised include the minimisation of waste, improvements in operational efficiency and productivity, and improved supply chain co-ordination [2]. Possibly in recognition of the benefits the partnership concept was bringing to other industries, the United States Construction Industry Institute (CII) established a task force, circa 1987, to evaluate the feasibility of partnering as a method of doing business and to address the challenges facing the US construction industry [3]. In the UK a number of investigations and government backed initiatives were also instigated, e.g., the work completed by Sir Michael Latham in 1994 [4], the Movement for Innovation (M′I) and the Construction Best Practice Programme (CBPP). Each reflected a desire to stimulate radical improvements in the construction industry in terms of value for money, profitability and reliability. As a consequence, partnering has become a common pre-tender requirement for government funded capital building projects, particularly in areas such as health, education, defence and energy. Indeed, evidence of partnering is now a prerequisite of Welsh NHS hospital procurements [5]. For many working in the construction industry, the introduction of partnering represents a fundamental shift in how business is conducted. The current decade has thus been described as being about improving project quality and performance through closer process integration and supply chain management [6].

Many of the industry’s Main Contractors (MCs) have already taken steps towards applying the principles of partnering to their suppliers – Main Subcontractors (MSCs), who are beginning to recognise its strategic importance. However, partnering in the construction industry is a concept that has by no means been universally accepted; this is thought to be particularly so, at and below tier two in the supply chain (see Fig. 1).

Moreover, questions remain as to whether an environment which is frequently characterised by one-off contracts and short-term gain is capable of supporting a concept which is based on mutual trust and long-term collaboration. The objectives of this research, therefore, are to evaluate the industry’s adoption of partnering and in so doing to (a) identify the lessons learned and the critical factors that facilitate its successful adoption, and; (b) to ascertain what the long-term implications might be for the industry’s suppliers.

In the following sections of this paper, we review the partnering literature relative to other common types of inter-organisational relationships to understand what partnering means to the industry and consider the benefits that might come about as a consequence of its adoption. The factors that have influenced the successful adoption of partnering in the industry to date are also identified and the development of a questionnaire, used to solicit information from the industry’s MCs, is described. Finally, the critical success factors for partnering in construction are presented and discussed.

Section snippets

Partnering in construction

Strategically, organisations may enter into alliances (a form of partnership) in order to innovate, access new markets, overcome local market restrictions, raise entry barriers and share risk for mutual benefit [7]. Operationally, factors such as the strategic importance of a product/service and its criticality to the final product [8], the cost of procurement relative to its internal manufacture, the capability of the organisation, and/or the need to focus on core competences [9] may influence

Elements of successful partnering

A variety of studies on partnering [19], [36], [27], [3], [23], [34], [37], [38] provide a window on the developing theory and practice in partnering and the common critical success elements (Table 2).

For clarity, the factors identified in the above table have been reviewed under the following four headings: commitment, processes, tools and outcomes. These categories appeared to emerge during the examination of the literature and have been used here to provide a structure to the discussion and

Collecting the data

In order to understand how widely the factors identified in the extant literature were being applied in practice, and to identify any lessons learned to date as well as ascertaining the longer-term implications for the industry’s supply chain, data was collected from the industry’s MCs using a survey questionnaire. This approach was chosen because the nature of the research question required data to be collected from a large sample of organisations. Whilst the constraints placed on the research

Conclusions

This research had two principal objectives. With regards to the first of these, a conceptual framework has been presented which is an attempt, on the part of the authors, to organise the factors identified in the extant literature and the findings from the empirical data into a logical, ‘sense making’ framework. As such, this framework does not represent causal relationships between factors and elements that influence the partnering process in a statistical sense. Therefore, it should not be

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