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07th Feb 2023
Author: John Dyson MAIPM, Simon Armstrong-Bayliss and Cristy Joel from Mott MacDonald
Disruption from global supply chain shifts is forcing the infrastructure sector to reimagine previously successful processes. Mott MacDonald’s advisory team explores the rise of the Integrated Delivery Partner (IDP) model and how it addresses supply chain limitations and accelerates procurement timelines in the post-pandemic world.
Australia’s geographic isolation was a boon during the pandemic. Now, it exposes us to compounding effects as the global supply chain shifts during our ongoing historic boom in construction and infrastructure. The infrastructure sector has been put on high alert. It’s becoming evident that these constraints will likely impact existing programs and the pipeline of projects announced across the country. Similar constraints have been flagged in non-infrastructure policy and change programs.
With mega-projects becoming increasingly clustered, delivery of the transformational outcomes expected of this record pipeline will be weighted towards those capable owners that adopt novel approaches to addressing supply chain limitations and can accelerate procurement.
Megaprojects statistics (source: Infrastructure Market Capacity, Infrastructure Australia, 2021)
“… for this record pipeline of investment to be delivered, substantial change will be required to the way infrastructure is planned, procured, delivered and managed… constraints in the sector are likely to continue to grow, compounded by the impacts of the COVID-19 pandemic on global supply chains.” Col Murray, Infrastructure Australia, 2022
“… for this record pipeline of investment to be delivered, substantial change will be required to the way infrastructure is planned, procured, delivered and managed… constraints in the sector are likely to continue to grow, compounded by the impacts of the COVID-19 pandemic on global supply chains.”
Col Murray, Infrastructure Australia, 2022
One solution to the supply chain constraint that also accelerates procurement timelines is long-term collaborative enterprise relationships structured around outcome-focused portfolio/program delivery.
Already enjoying success across nationally significant, complex programs, the IDP model has been developed through collaboration across leading industry bodies and project proponents globally and in Australia.
The IDP model is a scalable and flexible approach to delivery, mobilising a diverse supply chain into a portfolio/program enterprise. It brings a broader client advisory and technical focus and an outcome-based commercial approach over longer durations than traditional approaches.
The integrator role, and the IDP ecosystem that enables it, are scalable and adaptive.
The IDP model’s flexibility allows it to be optimised depending on the program, organisation, and objectives throughout the program lifecycle.
The different approaches are illustrated across a transformational portfolio and program value chain in the figure below, which indicates the likely level of partnership focus at various phases.
Different Integrated Delivery Partnership models (source: Mott MacDonald)
The IDP model addresses many issues across people and skills, portfolio affordability, systems complexity, lack of flexibility and agility, and limited productivity growth. Specific to supply chain limitations, IDP enables:
Transitioning to net-zero, harnessing digital transformation, addressing climate and cyber resilience, and driving productivity growth are the most significant challenges that client organisations face. They cannot be resolved with a short-term view.
As articulated by the Productivity Commission in its report Innovation for the 98%, long-term program and portfolio delivery allows, and encourages, upfront investment not possible in reactive and short-term engagements.
By its integrated nature, the IDP model requires certain enabling features to be most effective, including a collegiate approach to leadership, fostering partnering behaviours and taking a portfolio/program view.
Consideration is also required of the client organisation’s financial delegation and budgeting. This will account for the portfolio/program approach drawn on a work package basis (compared to transitional smaller procurement tasks) underpinned by a commercial framework that demonstrates value-for-money, probity, governance, etc.
Recent examples in Australia have achieved procurement timeframe reductions in government-based programs from 6 to 9 months to as short as 1 to 2 weeks.
The integrator develops specific prequalification programs across the supply chain that allow negotiations to focus solely on scope and resourcing once a work package is called for. This results in a meaningful two-way connection with industry that regularly shares pipeline and availability, significantly reducing procurement timelines. The speed of this process is critical in successful supply chain engagement as every day sees further constraints through increasing costs and competing opportunities.
The IDP model provides a vehicle to address substantial supply chain disruption and accelerate procurement timelines, delivering better program outcomes. However, true success relies on a robust and collaborative partnership between the client organisation and integrator.
Look for a multi-disciplinary partner with strength in portfolio/program management, extensive industry connections and a digital systems approach. Ensure they focus on broader outcomes and are aligned with the organisation’s values to reap the maximum rewards offered by the IDP model.
This article is taken from the Summer 2022 edition of Paradigm Shift.
If you liked this article, you can see more by reading the latest edition of the Australian Institute of Project Management’s digital magazine.
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