Comments on Construction


The Oldbury Partnership is proud of our unique view of construction. These themes reflect our approach.



We have an intimate knowledge of what real cost is, where it arises and what effects it. This knowledge is remarkably missing or ignored in most of the construction industry. The current experts are extremely good at adding up the theoretical prices which actually get charged between participants but they mistakenly believe that this is a measure of real cost. This lack of knowledge severely restricts the industries' ability to manage cost and drive out waste.

Much of the theoretical pricing structure is based on incorrect or arbitrary assumptions leading to poor and damaging decision making starting at the design stage and continuing through to project completion. The lack of knowledge on the drivers which effect real cost means that easy opportunities for cost saving are missed and decisions are taken that actually drive up cost without any benefit.

We are also well experienced in the techniques and strategies currently used to try and manage costs. Whilst we see many parties looking for improvement in their procurement and supply chains there are always, in our experience, serious errors and omissions in their varying approaches. We have yet to find a customer who acknowledges that their behaviour is the most significant variable in their supplier’s costs. It is also rare to find a supplier who recognises the true effect of their customers’ behaviour when calculating selling prices. What actually happens is that the “good customer” subsidises the bad. Why should these “good customers” continue to accept it?

We at Oldbury know what makes a "good customer", what that is worth and how to convince the supplier that this is important.



One of the enduring themes for construction in the last few years has been on getting ‘value’. There is a lot of very good advice available and published on the meaning of ‘value’ and how to achieve ‘better value’. This has generally been focussed on how to get improvements in areas like quality, delivery and suitability. All very respectable ideals.

Unfortunately the construction industry has hidden behind the concept of value to avoid accepting its cost inefficiencies. Both Latham and Egan, in their reports on construction, set cost saving targets for the industry of 30% or more; but both also expected improvements in those areas measured by ‘value’.

The Oldbury view is that the client will never get real ‘good value’ while he pays too much for the product. Our belief is that proper Supply Chain Integration will bring ‘value’ improvements but with substantial cost savings as well.