This case study explains how London Underground used a partnership approach within their Track Partnership, a strategic alliance of external and internal suppliers, to reduce management overheads by 15%, eliminate duplication of roles and reduce unit costs by 25%.
This case study demonstrates the importance of client leadership in all project phases. Informed clients understand the operations of their businesses and their key stakeholders. Clients can and must recognise that only they can initiate and sustain an alliance delivery arrangement, particularly in gaining and maintaining key stakeholder support. It is part of the Alliancing Code of Practice.
The London Underground Limited (LUL) Track Partnership delivers a programme of track renewals work on LUL's open and sub surface track network valued at around £100m per annum. The work is delivered by the Infrastructure division of LUL's Capital Programmes Directorate, using a strategic alliance of external suppliers and internal LUL suppliers, each providing delivery and management resources – the Track Partnership.
These works are part of LUL's programme of critical renewals work, maximising the capacity of existing infrastructure to keep the railway operating at high levels of reliability. Work is delivered in close proximity to the operating network, both in terms of the physical works and in the preparation for delivery and management of the programme generally.
In order to gain business endorsement, an alliancing approach must demonstrate an opportunity to deliver a better outcome than the alternatives in terms of value, quality, predictability and reliability of delivery. The delivery strategy developed at the outset of the Track Partnership was configured to deliver the track renewal volumes at increasingly lower unit costs over the seven-year duration of the company business plan.
What we did
Proximity to the operating railway and mixture of internal and external suppliers necessitated a varied approach to achieve the business plan objectives. To deliver efficiently, a partnership approach was selected to avoid the cost and problems of managing the interfaces between suppliers in a conventional transactional way. It also provided a platform for continuous improvement. The main features of this approach are:
- An incentivised commercial arrangement
- Delivery output performance measured by service delivery indicators
- Delivery input performance measured by key performance indicators
- A co-located management and delivery team
- A requirement for increasing performance improvements in each successive year
- A Core Group, forming the supervisory board for the Partnership
- Test of the partnership
The first real test of the Partnership arose during the first year, where renewals work in a closure overran significantly into traffic hours, severely disrupting passenger travel. This incident reinforced LUL’s critical leadership and strategic management role, given the physical and logistical proximity of track renewals work to the operational railway. LUL fully understands the impact of track renewals work on the operating railway, the differing levels of criticality of the parts of the network to train service operation, how best to organise the work to suit the constraints of operational railway and how to manage the interface with the operational stakeholders.
LUL led the Partnership in:
- Defining and embedding a set of Track Partnership delivery values, referred to as ‘the Commandments’, to elicit behaviours, which underpin successful delivery
- Defining and implementing a single delivery methodology – ‘One Way’
- Establishing a training facility for classroom-based and track-based training of management and delivery personnel
- Updating and simplifying management processes
- Forming a team to develop and implement innovations in delivery
- Adopting a visual management system (known as Viz Boards), to track all aspects of delivery, which is reviewed weekly.
The Viz Board system enables issues to be raised and corrective actions to be tracked at the time they are fresh in people's minds. Thus, problems and inefficiencies are eradicated, where possible.
This resulted in major improvement in delivery reliability, with no further major over runs into traffic hours, which in turn enabled improvements in efficiency.
Single source of truth
Subsequently, further changes were made to the management organisation to eliminate virtually all duplication of function. A set of management information 'single sources of truth' were also established. This ensures all parties have one set of shared scopes, programmes, estimates and cost reports to manage, reducing time wasting, conflict and miscommunication.
How we did it
The situation above demonstrates that true partnerships are needed to manage and resolve problems that risk the delivery of business objectives. A decision to abandon the alliancing approach when difficulties arose would also have resulted in the objectives being lost. The problem-solving approach adopted recognised the strategy remained sound but that improvements were required in some areas and that there were further opportunities to improve efficiency.
Benefits and Outcomes
This alliancing strategy was founded on:
- a co-located and highly integrated management team, with minimal duplication of function,
- common management information (including a set of ‘single sources of truth’),
- a visual management system and
- strong client leadership
It has enabled LUL to reduce management overhead by 15%, whilst almost eliminating duplication of roles. In addition, delivery unit rates have been reduced by 25%, whilst maintaining high levels of delivery reliability.
The Alliancing Code of Best Practice grid for Infrastructure Alliancing
The Alliancing Code of Practice grid outlines the information needed at different stages within an alliance. It includes a vast range of information and best practice on alliance arrangements for infrastructure delivery.
For further information about London Underground's experiences, please contantat Geoff Gilbert, Head of Commercial, Infrastructure, Transport for London: