A Crest Nicholson housing development, UK

Building A Sustainable Construction Business In The UK

How house-developer Crest Nicholson reduced waste and improved recycling from its UK building sites.

According to Ellen MacArthur Foundation figures, when
it comes to construction projects, 10 to 15 per cent of building materials are wasted and 54 per cent of demolition materials are landfilled.

In early 2012, Crest Nicholson PLC (CN) became aware that unnecessary wastage of building materials on site was costing it millions of pounds a year. It had received data from a contractor who coordinated a large group of skip merchants about the waste it was receiving from its sites, which it estimated around £10 million a year.

This figure represented an estimate of the “true cost” of on-site, above-ground construction waste to the business. This meant it factored in not only the direct cost of skips to remove waste, but also the expenditure on materials not used in the project, and costs associated with storage, handling and material transportation.

As one of the UK’s top ten large volume housing and mixed-use building developers, CN builds around 2,500 units a year with an annual turnover of £640 million ($1.35 billion). With the UK construction industry in the fledgling stages of post-recession recovery and margins tight, this inefficiency needed to be addressed.

CN wanted to investigate the actual cost to its business of this problem, while ensuring that the data captured and reported about waste materials was as robust as possible. For example, with the skip bin data it was unclear whether or not bins were full before being collected by skip contractors.

It undertook a program to gather data and analyse projects at four diverse sites across England and Wales to find out the causes of waste that were directly relevant to their own business.

CN was aiming to understand more fully: who was creating the waste (i.e. which trade), how much of it, at which stage in the project, and the reason behind its creation.

Getting suppliers on board

At the time, Gary Foster (now at 
Edge Consulting, Melbourne) was
 the regional director of a leading UK resource efficiency program, called
the National Industrial Symbiosis Programme. He was also a sustainability leader in a global engineering and environmental consultancy, an approved supplier to CN, and therefore known
to its Group Production Director and Procurement and Sustainability teams.

“Few property developers in the UK have focused on waste arising and management to the extent of Crest Nicholson,” says Gary. “They recognised their waste problem, and invited me to form and chair a ‘Waste and Material Resources Panel’”

From June 2012, Gary was based in the CN head office for two years with its Procurement and Sustainability teams as the program was delivered.

Once appointed as Chair and following consultation with CN’s sustainability and procurement teams, Gary put together a program plan.

His first job was to form the
panel. After getting insights from
 the Procurement team, they sent a questionnaire to CN’s top 60 suppliers about their operations and logistics.

Suppliers included major international providers of bricks, blocks and paving, national and regional suppliers of bathroom ware, kitchens and timber products, packaging, and businesses that supply multiple items, known as builders merchants.

Gary then selected 12 with the potential for the most impact in waste minimisation and recycling optimisation. A representative from each of the 12 companies joined the panel in late 2012.

Selecting the panel was a strategic move on CN’s part. This meant that any findings could be shared directly with its key suppliers. They could then go away and look at their systems and help to implement change, which would in turn help the developer’s cause.

“The aim for Crest Nicholson
was to devise a means of tackling its waste problem systematically, initially with its supply chain then involving other parts of the business, such as design, production and commercial,” explains Gary.

Over the next two years, the panel was brought together to generate project ideas and plan implementation.

Site audits

As CN’s own data audits at the four regional sites were underway, Gary visited and audited CN developments around the country, as well as supplier premises, to see for himself how build materials and recyclables were being managed.

“When reviewing suppliers, I found that they were largely resource efficient and reduced waste in their own operations,” says Gary. “However, due to the design, configuration and delivery of their products and packaging, they contributed to their clients’ waste accumulation.”

For example, uncompacted packaging waste accounted for half of the total cost of waste disposal for above-ground waste on building sites.

Through this systematic study and reviewing supplier surveys, Gary identified major waste streams on building sites: compactable packaging materials (e.g. plastics, cardboard), timber, plasterboard and inert waste.

Gary then created a “hotspot map” identifying the areas offering
the greatest opportunities for waste reduction. These included de-packaging materials delivered to site, improved material product design for items such as bricks and blocks, and better segregation of certain waste stream to allow more efficient recycling.

In the meantime, the analysis of CN’s four-site audit revealed the main factors that led to waste included: over-ordering, damage in transport and handling of materials, poor storage, poor use of materials and excess packaging by suppliers.

On-site pilots

Using Gary’s recently-acquired insights and the chosen suppliers’ direct experience of supplying building sites, the panel identified 50 potentials areas of investigation into better resource management and waste minimisation. From these, it chose 14 “pilot projects” to trial at one or more of CN developments over a set time period.

One area of investigation was trialling the use of reverse logistics
for compactable waste from plumbing supplies, kitchen installations and other product packaging. The supplier would collect the recyclable materials after delivering the products required that week.

Another project involved the development of reusable packing for ironmongery products, such as door handles and locks.

A plasterboard supply chain workshop highlighted an area nobody had previously considered. By aligning building storey heights at design stage with the dimensions of plasterboard, it would reduce the different types
of plasterboard used in a project
and enable the better supply of plasterboard on a ‘per plot’ basis.

Supplier commitment to the CN project was impressive.

“In coordination with the Waste and Material Resources panel, the various suppliers worked closely with all relevant areas of the developer structure to deliver the pilots, from design teams through to procurement and at site project manager level.” says Gary.

With the reverse logistics projects, for instance, they briefed the subcontractors and set in place processes, new collection materials for excess product and packaging, and new measurement and reporting systems.

They invested in compacting and baling facilities at their depots to enable the waste to be processed more cost effectively than at site and to then be collected by contractors for improved recycling.

Project outcomes

One outcome of the pilot projects for CN was improved procurement across the business.

Site managers began to take greater care when scheduling the delivery of materials to meet the build requirement and avoid spoilage of products due to being left around for long periods.

Better-managed sites were able to reuse excess products from one job to another, thus reducing further expenditure and avoiding wastage.

Suppliers who could provide and support a resource-efficient solution were often rewarded with more business with the developer and the security of a longer-term commercial agreement.

CN also introduced or improved several on-site practices to reduce wastage and improve recycling
of construction materials. It has progressively improved its segregation of waste into the major waste streams of compactable packaging, timber, plasterboard, metals and inert waste. This improves recycling efficiency and reduced spend on general waste collections.

It advises sites to create a ‘logistics plan’ to specify the route of materials from arrival on site through to storage, movement, use or creation of waste

Site managers are encouraged to build concrete hard standings and covered areas to store materials like timber, plasterboard and cement to keep them dry and fit for use.

After heeding lessons from its pilot projects and starting to roll out new best practice processes, CN now has a recovery rate of 95 per cent from its building sites. From 16,500 tonnes of material and products collected form site each year, half is recycled, a sixth is re-used and the remainder is used in waste-to-energy projects.

Learnings

For Gary, CN’s experience demonstrates how logistics is a key area for construction businesses to target when undertaking a waste minimisation project.

He highlights that one of the most successful pilots involved site teams collecting and better segregating compactable waste, mainly soft plastic wrapping and cardboard waste, for collection by suppliers in a reverse logistics scenario. This has been
rolled out on a regional basis and is continuing to be expanded throughout the company.

Gary attributes CN’s commitment to sustainability and its willingness to find and act on data as significant factors in this project’s success.

“To my knowledge, Crest Nicholson measures, understands and manages its waste better than any other developer in the UK,” says Gary.

He praises the company’s “strong leadership” as being key to effecting change in its improved resource management and recycling, citing a highly influential Group Production Director, Sustainability team and Procurement team to support its aims.

“The Crest Nicholson experience demonstrates how creating a committed group to review, trial and implement innovation throughout a business is helpful in creating the impetus, knowledge, know-how and economic conditions for sustainability in the supply chain,” says Gary.

He advocates having a partnership approach to key suppliers, where construction companies can offer sole supplier agreements, longer contracts and better payment terms to those business that are willing to support their client’s sustainability journey.

Aside from suppliers, engaging employees and sub-contractors on site is pivotal, according to Gary, for engendering an environment for successful waste minimisation and increased recycling.

“Identifying and having willing, interested champions through all levels of the business from site labourers through to the Chief Executive is key,” says Gary.

During the project, Crest Nicholson carried out audits to identify where poorer performing sites could best raise their performance. It also delivered training sessions to site employees to educate and promote best practice around receipt, storage and handling of materials.

For Gary, construction firms in Australia could learn a great deal from CN’s project experience.

“Waste matters environmentally, but it can also be seen as an indicator of an organisation’s overall levels of management and effectiveness,” states Gary.

Taking an interest in reducing material waste, Gary says, can contribute to realising significant revenue savings, but also provides insights into the performance of an organisation at a local, regional and national level.

Gary says the first step is to gather accurate waste data and have a system in place to achieve this. Next, ensure that this data is disseminated to directors and site-level staff throughout the organisation to improve awareness and ownership of the issue.

Through necessity, Gary says innovation in the construction process will help to reduce waste significantly. He advises developers to stay up
to date with developments, such as building information modelling and off-site manufacture.

Gary thinks the greatest impact in the long term will likely be in designing out the problem, to maximise the use of resources and address the needs of the circular economy in construction, where the productivity of resources
is maximised. Nevertheless, for now
at least, construction companies need assistance to remove recyclable or reusable materials they dispose of during a development.

“The Australian waste management sector would do well to develop a business model whereby they are rewarded for helping their clients to reduce waste, rather than create more of it,” says Gary.

About Edge Environment

Gary Foster is Associate Director (Victoria) for Edge Environment, a consultancy that helps companies to measure, understand and manage the environmental and social impacts of their products, services and operations.

More details on its services are on the company website. For specific queries on this project, contact Gary directly by email at gary.foster@edgeenvironment.com.au.