How Farrans got engineers to fulfil potential and transform firm’s culture
29 September 2015
Farrans Construction has successfully operated in Ireland for 70 years, but with the fall of the ‘Celtic Tiger’ the company was suddenly faced with being forced to explore new ways to ensure financial stability was maintained.
In 2010, under guidance from Engineers Ireland, Farrans’ CPD committee was formed. The primary remit of the committee was to manage the guidance and development of its engineers and, since then, Farrans has made significant financial and time commitments to ensure its engineers fulfil their potential and positively contribute to the overall business strategy.
In January 2011, the Farrans Lean Construction Initiative was born. It put the structure and training in place to help engineers establish practices and processes that would address the business needs of the company and those of industry clients.
Developing tools and techniques to eradicate all forms of waste
Considerable focus was given to developing tools and techniques to eradicate all forms of waste in construction and engineering practices. The initiative was an astounding success and was recognised by Engineers Ireland with the award of CPD Company of the Year (Large-sized Company Category) 2011.
Such success has inspired Farrans to further its commitment to investing in similar innovative techniques and processes. In May 2014, the commitment was made to invest in training its engineers to brainstorm and develop the areas in which the firm needed to improve.
To assist with the process, external Lean Construction and Hoshin Kanri specialists were retained to facilitate the training to assist engineers with executing their goals. This training was delivered to 30 senior engineers over two days and resulted in the formation of teams whose target was to develop high-level strategic objectives ending with specific improvement targets. The teams followed a four-step strategy of execution.
- Step 1: Identify the strategically important goals (SIGs). It was identified (among two others) that the company work in progress (WIP) financial position was a key lag measure of the its cashflow and profitability. A target of a £4 million improvement in 12 months was set.
- Step 2: A ‘Hoshin Plan’ was then developed, team leaders and members allocated, and measurable actions put in place in order to achieve these targets. Submission of Applications for Payment and receipt of Client Certificates were identified as the lead measures for reducing the WIP. Progress against these lead measures would be evident almost immediately.
- Step 3: Keep a compelling scoreboard. A straightforward line graph was used and updated by hand every week as the WIP figures were issued by the accounts department.
- Step 4: Create a cadence of accountability. The engineers began engaging in a regular weekly process (via conference call from Farrans’ sites and offices throughout Ireland and the UK) that highlights successes, analyses failures, and course-corrects as necessary, creating the ultimate knowledge share and performance management system. This is supplemented by ongoing communication throughout the week from a director and an appointed SIGs co-ordinator who prompt the engineers on their lead measures.
After just 12 months the culture of its team of engineers has changed
After following this process for a mere 12 months Farrans has changed the culture of its team of engineers. They are now self-motivated towards continuous improvement of the WIP and are now looking to expand the SIGs processes into other areas of the business.
At present there are upward of 60 engineers and quantity surveyors directly involved with this process. They are involved on a daily basis and actively participate in the weekly SIGs meetings. At these meetings, the engineers are encouraged to share any experiences from the previous week which has helped or hindered the achievement of the goals.
This often leads to interesting discussion and sometimes debate. For those not directly involved in the process, the success of the initiative has been communicated to all members of staff by way of the company newsletter.
By improving the lead measures on the submission of applications and the receipt of certificates from circa 40 per cent compliance to almost 90 per cent compliance, they have demonstrated how ensuring the lead measures are acted upon impacts on the lag measures.
By adhering rigorously to this process, in six months Farrans’ engineers managed to improve the WIP by more than £2.5 million; in 12 months the overall WIP was improved by £8 million; By doing so, this has impacted on the business by reducing the pressure on the company cashflow and overhead, enabling it to maintain staff levels and improve motivation and morale.
Many companies, when looking to improve their cashflow, might resort to employing additional credit control resources, which creates further pressure on the overhead, potentially leading to the reduction of the engineering staff. Farrans has chosen not to adapt such a strategy and instead has involved the engineers in thinking of sustainable and innovative solutions to the issues faced by the company.
CPD Employer of the Year Award 2015
The 2015 search for the CPD-accredited employer that uses formal learning and development to best effect is coming to a close. The aim is to recognise and reward engineering-led organisations that demonstrate best practices in the use of continuing professional development (CPD) to adapt to steps-changes in their operating environments.
The CPD Employer of the Year Award is the premium award for employers of professional engineers and technicians. Now in its 12th year, the award aims to recognise successful accomplishment of an organisation’s strategic vision through the use of suitable CPD initiatives. This year’s finalists will present their entries to an audience of CPD-accredited employer organisations on Wednesday, October 7, in Clyde Road. Winners will be announced at the Engineers Ireland Excellence Awards in the InterContinental Dublin, Ballsbridge, on Friday, November 6, 2015.
In announcing these awards, Engineers Ireland was saluting organisations that have pioneered new approaches, new processes and new practices. These achievements are of national standing, of sectoral significance and they have sustained and protected thousands of jobs, if you take the totality of what our finalists have achieved.
A stellar selection of entries has been whittled down to just three – the very best of the best. The 2015 finalists comprise:
- Boston Scientific (Galway);
- Farrans Construction;and
- KCI Manufacturing.