Delivery of the new power generation challenge requires optimum
delivery strategies to
succeed
All major power generation suppliers have
started to review their generation portfolio in light of the Large
Combustion Plant directive and UK and European targets for low
carbon generation. With competition gaining pace, and a changed
construction environment facing power generation companies since
the last major build round of the 1950’s and 60’s, they need to
develop new delivery strategies to meet the requirements of the
investment programmes.
There are several
critical elements of best practice delivery models but the question
is whether power generation companies are prepared for the delivery
challenge and have given sufficient consideration to the options
available.
The partnering ethos
Collaborative working and partnering have been major themes of
recent successful major construction projects, for example Terminal
5 at Heathrow. To achieve cost and time certainty that other
industries are experiencing a smarter approach to collaborative
working will be required.
Despite the many innovative and business arrangements that have
been embarked upon under the umbrella of partnering, many power
generation companies are not taking full advantage of the
partnering ethos or understand the benefits it can bring.
Some companies will continue to operate within a single project
environment but experience has shown that behaviours within this
environment are still more likely to lead to adversarial issues.
The power generation companies who commit to programme
incentivisation may see the benefits this can bring, as there is
more focus on programme outcomes that are aligned to business
objectives. This is opposed to individual project outputs, where
individual behaviours can still have a negative effect.
Better engagement
With different levels of project delivery capability within
power generation companies there is a growing trend towards
outsourcing, and consequently, better engagement with the supply
chain is becoming more critical. Power generation companies’
approach to supply chain management varies, as they continue to
decide on how much of the supply chain should be retained with
client control and how much is passed down to Tier One providers.
Regardless of the approach undertaken the supply chain strategy
should be aligned to the client’s corporate business goals.
In meeting the new challenges the construction industry
presents, power generation companies should focus on the
ingredients for a successful delivery model through:
- Securing the right balance between client control and
collaboration in the delivery model
- Optimising the blend of different delivery providers to ensure
programme objectives are achieved
- Developing effective programme delivery vehicles that can
package the number of project deliverables
- Successfully balancing the resource capacity and capability
between the client and delivery provider
- Ensuring that an effective programme management office is
established prior to programme commencement so that there is full
visibility and appropriate control of performance from the
outset.
Act now
Implementing and maximising best practice needs to be realised
quickly if companies are to be successful. Companies often have the
enthusiasm but business functions associated with these areas are
often under-resourced in relation to the potential for improving
business. Success will depend on whether the UK power generation
build programme can implement the optimum delivery strategies and
models in a competitive construction environment.
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