Delivering through an Integrated Alliance Dale Evans Alliance Director

Anglian Water is challenged more than other UK water companies by climate change (large, flat, low lying, low rainfall region ), population growth, and targets to improve the environment £2 billion planned capital spend in 2010 to 2015 to provide for improvement of quality, maintenance, and future resilience of water and wastewater networks and processing plants

3 Four collaborative delivery vehicles Challenges at the outset (2005): Efficiency Effective Operable solutions – delivered on time Serviceability Health and Safety 60% £200m/yr Project Management Works Management Integrated Supply Chain Integrated Operational Capital Wastewater Integrated Metering and Developer Services Integrated Maintenance & Repair Integrated Main Works Capital Water 20% 15%5% 2015

4 Developing an Alliance Model ALIGNMENT INTEGRATED TEAMS VISIBLE PROGRAMMES COLLABORATION INCENTIVE BASED MODEL CONTINUOUS IMPROVEMENT

5 Need for a more integrated Process

6 The Capital Delivery Process Influence Spend Design Construction Anglian Water Consultant Partner Construction Partner Suppliers

7 Alliance Organisation

Commercial Model focused on behaviours B. Commercial Model – AMP5 Alliance Programme Pool Sub-programme out performance 50% 25% Programme Pool 25% Alliance 1. Overhead and Profit Anglian Alliance 2. Programme Pool A. Affordability AFFORDABILITY COST BASE TARGET COSTS

9 The AMP5 Targets Capital Delivery Index (CDI) targets 20% to 30% affordability challenge 50% reduction in embodied carbon 20% reduction in operational carbon

10 Pre-Assembled Supply Chains RINGSTEAD WTW Our Influence: Tier 4 Tier 3 Tier 2

11 Pre-Assembled Supply Chains MCC Components Framework Agreement Electrical Equipment Framework Agreement Gas Chlorination Chlorination Equipment Framework Agreement Nitrate Plant Framework Agreement RINGSTEAD WTW Our Influence: Tier 4 Tier 3 Tier 2 Motor Control Centre Framework Agreement Installation Contractors Frameworks & Approved List

Example - Bedford STW Sludge Centre Contributes to Anglian Waters renewable power obligation. £5.8m solution cost Started in April Output achieved in March months for optioneering, design, construction and commissioning. A product based approach to design Early and enhanced engagement with the supply chain Development of an integrated construction programme. Weekly production meetings Shared desire to succeed

integrated programme teamsSuppliers selected and become part of integrated programme teams Construction timeConstruction time - reduced by 35% in highway Embodied carbonEmbodied carbon - more than 40% reduction Over 30% savings on traditional approach Open cut optioneered from first to last place in the hierarchy of main- laying techniques. Example – No dig techniques 70% 30%

14 OFF SITE CONSTRUCTION PRODUCTION MANAGEMENT CARBON REDUCTION CONTINUOUS IMPROVEMENT WASTE PRODUCT DEVELOPMENT

Product Integration

integrated teamWorked with integrated team to develop an offsite modular UV channel plug and playTested in the factory – plug and play Construction timeConstruction time - reduced from 16 weeks to 8 weeks Embodied carbonEmbodied carbon - more than 50% reduction Over 30% savings on traditional approach Example – UV Treatment

SINGLE POINT TRADITION AL DESIGN AND MANAGEMENT PARTNERING AND FRAMEWORKS ALLIANCE MULTI PARTY DEDICATED SUPPLY CHAIN Manage the effect (consequences) Manage the cause (activities ) transactional Reactive Point in time, rigid Can only deal with the known No action … claim Integrated teams … exposed Active Living, adaptable Can deal with change/challenges No room to hide Integrated teams … explicit PAST 1970s 1980s1990s2000sFUTURE adversarialcollaborationrelationalintegration Egan / Latham Market Trends INTEGRATED TEAMS ALIGNMENT WITH BUSINESS NEEDS DEVELOPMENT OF SUPPLY VISIBILITY (COST & PERFORMANCE) INTEGRATED TEAMS ALIGNMENT WITH BUSINESS NEEDS DEVELOPMENT OF SUPPLY VISIBILITY (COST & PERFORMANCE)

18 An approach centred on integrating and developing the right teams A commercial model that enables integration - performance driven from baselines Selection based on cost, capability and culture Teams developed early to maximise partner and supplier input Aligned ‘back to back’ through the supply chain Alliance Integrated Teams