The famous five

Can you give me an idea of the scale of the Terminal 5 project?

Stretching over 260 hectares, Terminal 5 is currently one of the largest construction sites in Europe. The new terminal is expected to increase passenger traffic by up to 30 million people each year. In terms of budget, the project as a whole is worth around £4·3 billion and is due for completion in 2008.

What is your role in the project?

Newey & Eyre works in partnership with BSS offering integrated logistics and supply chain of electrical and mechanical products. We provide more than 8000 items from 400 suppliers, including containment, cable, switchgear, accessories, luminaires and lamps.

We hold stock of common bulk purchase electrical equipment and bespoke products needed for the project, both on site and in other locations close to the site. We perform complex logistics operations to deliver the right products to the right place at the correct time and price.

Isn’t it unusual for electrical and mechanical distributors to work together in this way?

It’s definitely a new way of working, but it’s an effective model which I believe we will see more of in future. For large projects such as Terminal 5, having a one stop shop for electrical and mechanical products saves contractors and clients time and money, and a combined logistics package reduces the impact of both site traffic and environmental issues.

How did you win the project?

Newey & Eyre was chosen on the basis of our track record on previous large projects and the transparency of our bid. In addition, our parent company Hagemeyer offers worldwide supply networks supported by local services, which are invaluable to such projects.

How do you add value through your project support service?

Through greater efficiencies and peace of mind. For example, our computerised inventory management system is invaluable, as the project continually changes in terms of both design and timescales. It allows us to react quickly to changing programmes, quantities and delivery dates, using data such as on- and off-site stock availability and manufacturers’ lead times.

Our dedicated on-site sales and logistics staff build a greater understanding of the project and its complexities. This enables them to better interpret the need for consistent, reliable service and communication on site.

Do you have an agreed set of key performance indicators?

Yes, and they are recorded and monitored on a monthly basis to measure the value we are adding and to evaluate the service. They include on-time delivery, the accuracy of what's delivered, pricing and the overall cost-effectiveness of the operation concerned. These enable us and our customers to quickly identify any areas of weakness and then take the necessary action before a real issue arises.

How do you manage relationships with contractors and BAA?

A steering committee, consisting of senior representatives from Newey & Eyre, BSS, the contractors and BAA meet monthly. Our on-site project manager and sales team also regularly visit the contractors both on and off site.

What do you consider to be the key issues in providing this type of project support service?

This type of project must be run as a standalone operation. It’s vital to be there on the scene – we find that on-site stores and personnel dedicated and focused solely on the project are paramount to the success of the project. It was important to clearly identify and in some cases redesign the end-to-end process from order placement to invoice payment to ensure understanding by all parties. Continual two-way communication is also invaluable.

Can you tell me about the logistics behind this?

As planning can change in an instant, flexibility is crucial. The logistics operation is performed from a 2000 m2 dedicated warehouse. Here, workpacks, or installation kits, are assembled and delivered to the site as required. All deliveries have to be pre-booked to arrive at a specific time, due to the high security of such a site and the high volume of traffic – it’s an extremely busy place. On-time delivery is obviously key to the smooth running of the project.

What does a typical workpack consist of?

There are two types of pack – one for a particular installation, for example everything electrical and mechanical needed in a specific room, and one for a specific product in an area, for example lighting products for a departure lounge. The packs are broken down into manageable installation kits. For instance, the packs for lighting the departure lounge may well be sub-divided into several kits that will be delivered as and when required.

Workpacks contain enough electrical and mechanical products for one day’s work. The contents of each pack are dictated by the contractors who place an order with us.

How many staff are on site?

We have a project manager supported by a process manager, three sales staff along with 10 warehouse staff including two drivers of dedicated delivery vehicles.

How do you ensure effective project management?

Because the site is dynamic and continually changing, the role of the project manager is key to ensuring everything fits together.

Within the overall project, there are three individual strands – T5A, T5B and the underground rail extensions. T5A and B are almost mirror images of each other, except A is considerably larger than B. The rail extensions, on the other hand, are completely different, using a completely separate set of products, product specifications and service criteria. All three strands have been running concurrently, and each is handled by a different contractor. T5B is the first strand to be completed.

Have you encountered any problems since starting work on this project?

Due to the complexity, dynamic nature and sheer size of the project, it has sometimes been difficult to get final information on the design and programme timescales, which is why it is important that we adopt a flexible approach to project management.

It has also been very interesting generating a clear understanding of this new way of working – ie a partnership approach to supply chain management as opposed to the conventional construction model.

How important is health and safety to the project?

The goal of BAA is to deliver this project under four main criteria: quality products, on time, on budget, and delivered safely. Effective health and safety policies are absolutely vital. All our staff are fully trained and we ensure health and safety is always treated as a priority – the T5 site demands it.

what would you say have been your key learnings to date?

The importance of continually looking for ways to reduce costs through effective partnership working.

As a project of this size will continually change, you have to be able to react quickly and our approach to proactive project management has proven itself to be the right way to go.

I am sure that many of the key learnings from Terminal 5 will be carried over in to the construction work ahead of the 2012 Olympics.

Would you undertake a similar project in the future?

Yes, absolutely. We always welcome the challenges these bring and the opportunities to develop our business.