Why has Ai Group established the CSCC?

Australian governments have recognised that they must build new, and renew existing, infrastructure for the Australian community. To achieve their goals governments are undertaking historically high levels of expenditure with approx. $230bn being projected for expenditure over the forward estimates along Australia's eastern seaboard alone, with an additional $100bn allocated by the Federal Government over the next decade.

Importantly, government construction activity also supports and enhances construction activity within the private sector.

Governments and head contractors have recognised that the delivery of the massive pipelines of projects is contingent upon effective communication and collaboration. Action in this respect is now underway through the Construction Industry Leadership Forum (CILF) which is a collaboration between the governments of NSW and VIC and the Australian Constructors Association. Other jurisdictions are actively monitoring the work of the CILF.

While the pipeline of infrastructure projects being developed across the country is projected to continue at high levels for in excess of a decade, the successful completion of these projects will be dependent upon a sustainable, organised and resilient supply chain.

To meet demand and maintain a sustainable supply chain will require greater coordination of supply chain participants across the spectrum of key materials and products subsectors and this must address issues that are projected past the next decade. That is why the Ai Group has established the Construction Supply Chain Council (CSCC).

The CSCC is intended to operate as a forum for the industry's supply chain to discuss and recommend improvements to the means by which construction projects are developed and delivered. The CSCC will become the third leg of the chair that will support the work of the CILF and similar actions by governments across the country.

The aim is to achieve a more sustainable supply chain and, through collaboration with clients and contractors, improvements to project completions of community infrastructure and in the general commercial and residential sectors.

The CSCC would be seen as a peak national level entity designed to develop best case supply chain processes and address key/critical impediments to successful undertaking and completion of projects. The CSCC will also be a forum where clients and contractors may raise issues that impact on industry and which the CSCC is well placed to respond to.

There is already precedent for a Council along the lines contemplated. The Australian Industry Group has previously established the Defence Council which represents the defence industry in its dealings with government. The Defence Council plays a crucial role in ensuring the delivery of Australia's defence projects.

One of the first actions of the CSCC will be the development of a formal charter to guide CSCC operations. The following criteria would be indicative of the functions of the CSCC:

  • Operate as a forum where the construction supply chain may interact in an open and transparent manner to develop best practice supply chain delivery models for construction and infrastructure projects and general building projects.
  • Contribute to a collaborative relationship between construction contractors and their public and private sector clients.
  • Contribute to the development of industry skills to deliver improved productivity and performance demanded by the changing profile of investment and modern methods of construction.
  • Encourage innovation and allow for earlier and integrated supply chain involvement in projects through input in the development of improved competition and procurement processes.
  • Provide advice on:
    • new construction methods and products coming to market
    • long term sustainability of key materials based on identified demand through government and industry pipelines of work
    • opportunities for the use of recycled materials
    • opportunities to reduce the industry's carbon footprint
  • Examine complementary opportunities for industry development initiatives.
  • Undertake and contribute to quantitative and qualitative research to identify, develop and disseminate best practice in supply chain management, industry capability and capacity and involvement in construction and infrastructure projects.

It is proposed that the CSCC will be comprised of general members of Ai Group and operate under the direction of a National Leaders Group. Membership will be relevant to Ai Group members whose businesses supply materials and/or products and systems into the building, construction and infrastructure sectors.

The CSCC will operate across all Australian jurisdictions and will thus represent the interests of businesses that are both national and/or state specific.

General members would receive and exchange information, contribute to policy development and industry positions and attend events and forums. The National Leaders Group would develop and drive policy and operational activities based on input from general members.

The CSCC would meet at least two times each year and otherwise as required. Sub-groups would meet more regularly depending upon issues in the marketplace and strategic planning decisions.

Ai Group will provide executive administration, governance and probity support.

With regard to probity support, the following is proposed:

  • Ai Group will develop for adoption a protocol covering Competition and Consumer Compliance responsibilities of the CSCC. This protocol will be based on the protocols that Ai Group have used for similar forums such as the Defence Council where assurance of compliance is required.
  • A probity officer will be appointed to attend all meetings and the protocol will extend to any sub-groups or working groups of the CSCC.

The CSCC would be expected to establish several sub-groups to ensure focus on specific and critical areas as exemplified below. It is anticipated that key industry associations would be engaged by sub-groups to ensure that sector-wide input is achieved. Sub-groups could expand and contract as required. Flexibility is key to success.

The sub-groups would meet at least quarterly and otherwise as required:

  • Steel
  • Concrete, cement, aggregate and bitumen
  • Off-site manufacturing
  • Electrical, mechanical and plumbing
  • Lifts and escalators
  • Equipment (earthmoving and related civil equipment)
  • Utilities
  • Information and Communications Technology

It is envisaged that the sub-groups would be supported from within the CSCC membership as well as from collaboration with industry stakeholders as determined.

As the operations of the CSCC develop, it is anticipated that consideration will need to be given to extending operations to other supply chain sectors. Initially it is proposed to focus CSCC operations on current key identified sectors that will have greatest impact in terms of development and delivery of projects and industry sustainability.

The level and extent of funding will be dependent on the number and complexity of issues that the CSCC becomes involved in and a funding structure will be required to be developed. This is likely to be more evident once the CSCC is in place and commences to consider the key areas that will best serve the interests of the relevant industry sectors.

However, over the first 12 months of operation it is proposed that administrative costs will be borne from within existing Ai Group resources. This approach will then permit CSCC members to later review the operational effectiveness of the CSCC and determine forward structure and budget support required.

All that is required is to lodge an expression of interest with Lindsay Le Compte, Ai Group's General Manager of Construction and Infrastructure at lindsay.lecompte@aigroup.com.au.

Lindsay is also available to answer any questions about the CSCC by calling him on (02) 9466 5522 or 0417 481 500.

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