Building matters
December 1st 2006

You may take the view that as long as a warehouse is finished on time, on budget and to the right specification, that's all that matters. However, the project management could acutely affect all three criteria. Will Cooper from warehousing property specialist sbh.uk considers how the Construction Management approach could help deliver a better warehouse

Over the part few decades the construction industry has adopted a number of different ways to meet demand for faster, more cost-effective build programmes.

The traditional method – and one still widely used – involves the client selecting a main contractor, agreeing a budget and specification and leaving the contractor to manage the project. Typically, the main contractor appoints a number of subcontractors and adds a mark up to their costs and to any other services provided. This 'hands-off' approach can make it difficult for the client to make changes during the construction without costs escalating, and as design work is completed before the individual elements are put out to tender, the scope for fast track building is limited.

The more recent concept of Design and Build is, in effect, a development of the traditional Main Contractor route. The client acquires the finished building from a single contractor who is responsible for design and construction. The building designers are appointed by the Main Contractor, so the client has no direct relationship with those responsible for planning the building.

Costly changes As a sub-contractor, the designer's first loyalty is to the main contractor, and therefore whether the building is the best solution for the client may take second place to profit. With the main contractor taking responsibility for the building design, the client will be 100% committed at an early stage, while fundamental elements of design may still remain to be resolved. And any changes or modifications may prove difficult or costly to implement.

In both cases the main contractor's profit remains hidden. Such companies tend to generate much of their income through appointing and managing various suppliers and sub-contractors.

Under the Construction Management route the client selects and appoints a professional consultant. He or she acts for the client by appointing and managing all the skills and trades required to complete the project, but who most importantly are directly employed by the client.

The Construction Management (CM) consultant will work for an agreed fee, usually about 1% of the project cost, eliminating the margins a main contractor would add to any sub-contractor's bill.

Most Construction Management companies can provide a range of project management skills including architectural, engineering and design services, and materials handling fit outs can easily be coordinated into the main build programme.

One of the great advantages of the CM route is that the client retains more control and flexibility, as the design details need not be completed before work starts. It also provides a faster and more cost-efficient strategy, as design processes, adjustments and modifications to the plan can be incorporated as the project progresses.

Once the foundations have been designed and tenders are being obtained, design and tendering work for other trades such as the roof and steelworks can take place in parallel, saving further time.

Most warehousing projects can be divided into the following seven elements and tackled in sequence, allowing some flexibility through much of the programme: foundations; external works and drainage; warehouse floor slab; steel frame; cladding and roofing; mechanical and electrical – heating, plumbing, ventilation, etc.; and materials handling and storage fit out.

The whole process involves the client and is open and transparent. Those responsible for the building specification and design maintain control and as the CM consultant's priority is the client's best interests, site organisation and management planning tend to help work go smoothly. As specialist contractors are paid directly, financing costs built into tenders are reduced. By saving build time and being able to review the design as the project develops, potential cost-savings of up to 5% can be achieved.

Client commitment As effective as this route can be it still depends on the client's commitment and involvement, and the appointment of a dedicated in-house project executive can be vital to the project's success. The individual must have the time, the understanding and the knowledge to act as an effective link between the client's senior management and the CM consultant.

Should the client not have anyone with the skills or time to tackle this role, the company should be ready to hire an external executive or consultancy such as sbh.uk to handle this vital role.

The modern warehouse, designed and completed to complement the client's logistics operation, is today far more than four walls and a roof. To achieve the right outcome the client needs to understand fully what is expected from the project today and in the future – and to ensure that both the construction route and those employed to deliver the project have the necessary specialist skills and experience.

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