Alliance Contract Commercial Governance
Visual management provides control of complex alliance contract
- 3 minutes read
ORBIZ supported this Australian tier two construction contractor to secure a long-term $600M+ alliance contract to deliver level crossing removal work packages across suburban Melbourne.
With 5% of the project value dependent on strategic deliverables and the prospect that underperformance would result in the loss of future work packages, our client recognised a need to increase commercial governance and introduce new performance management practices.
At a program level, deliverables related to innovation, workforce development, social inclusion, and effective engagement. At the work package level, objectives related to safety, environmental impact, sustainability, network disruption, relations with the local community and stakeholders, effective engagement, and on-time delivery.
Additionally, the alliance needed to develop a system and culture of Innovation and Continuous Improvement (I&CI) that the customer would measure for impact over the contract lifecycle.
$11M
The approach
Our team were engaged during the bid phase to conduct a systems review of the current project control methods to identify and recommend improvements that would meet the commercial terms of the prospective alliance contract. Once the contract was secured, our team were retained to implement our recommendations:
- Deploy a short-interval control strategy to increase efficiency at the work package level.
- Introduce Visual Performance Centres (VPC) to increase performance transparency through improved commercial governance and accountability.
- Develop a management system framework that would foster and sustain an I&CI culture.
- Streamline reporting to improve information flow and strengthen project governance.
The solutions
A program-level VPC was developed to increase the governance of each work package whilst providing oversight of the strategic objectives set by the customer.
Functional-level VPCs were developed to govern engineering and construction delivery, creating the catalyst for I&CI through a performance monitoring and problem-solving platform.
Structured problem-solving and continuous improvement practices were introduced, along with training and coaching, to enable internal champions to lead innovation hubs and improvement workshops.
A new reporting process was introduced, utilising data provided by the tiered VPC system. The state government body overseeing the project recognised this process as a breakthrough improvement, leading to adoption across the wider program.
A Last Planner® System software tool was implemented to increase control of work package delivery and productivity in the construction phase. The successful introduction of this software pioneered in the Australian market for the first time, led to adoption across the wider program through asset owner advocacy and direction.
Learn more about our services
Interested in learning more about how ORBIZ can help your organisation? Fill in your details below and one of our team members will be in touch.