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Product category: Heating Systems, Controls and Management
News Release from: Sentinel Performance Solutions | Subject: Heating and boiler replacement programme
Edited by the Buildingtalk Editorial Team on 06 April 2007

Heating and boiler replacement programme

Partnering pays dividends on Merseyside - commonsense takes costs out of heating and boiler replacement programme.

Sentinel is the UK's leading chemical water treatment provider with a pedigree that goes back many years It is one of the only manufacturers of water treatment products that is recommended by virtually every boiler manufacturer selling boilers in the UK, because the quality of its products in a marketplace that has a number of low quality, relatively ineffective products available, is recognised as top notch by everyone in the industry

Boiler manufacturers - and installers and contractors - recognise that a system cleaned and then inhibited by Sentinel products is one that will see its boilers more likely to operate efficiently and less likely to fail because of the quality of the water flowing through it.

It's very simple.

A clean system helps a technologically advanced piece of equipment like a condensing boiler to operate better and to optimum efficiency levels.

There is no point in investing in a top quality, high efficiency boiler and expecting it to operate well on a mucky system.

It won't, and debris in a heating system will quickly damage its components - the heat exchanger in the boiler, the valves, the pump and the pipework, not to mention the radiators clogging up with scale and black magnetite sludge from corrosion within the system.

A major social housing provider on Merseyside is reaping the rewards of a partnering scheme that has Sentinel at its heart, that has seen major savings in its domestic central heating installation and maintenance operations and costs.

And as well as saving money, the scheme has been based on energy efficiency savings too - so it's been a 'win, win, win' situation, where the organisation's tenants have benefited massively too.

It's a commonsense procurement model that is delivering very impressive benefits and savings.

The Liverpool Housing Trust, now part of the Vicinity housing group, identified back in 2001 that there were substantial cost saving opportunities in their central heating systems and boiler replacements programme - money that could be spent on other improvements that were needed to the 10,000 homes in their ownership and management.

At the time they operated a reactive rather than proactive programme that was seeing excessive numbers of boiler replacements being carried out and at the time the average cost of each installation was around u3,000.

There was little or no standardisation of materials or components - and there was no planned purchasing that would allow LHT to benefit from volume discounts.

The delivery of heating systems in social housing environment can be quite complex, with a number of work programmes being delivered at any one time - new build installations, distress replacement of faulty boilers and systems, cyclic maintenance and system retrofit - replacing for example outdated electric heating systems or where properties still did not benefit from central heating.

LHT operated a number of small contracts with different contractors, based on competitive tendering procurement techniques.

This led to perceived good value but also to a variable range of quality standards - and because there was no standardisation of components, there was a lack of continuity and team cohesion, little opportunity to develop continuous improvement and sometimes long delays in getting the necessary work done.

It needed a step back and a serious look at how things might be improved.

LHT devised an initial strategy to reduce overall costs.

They brought in an on-site validation process to cover boiler renewal authorisation and they looked to reduce the number of firms involved in the work they did and at ways of benefiting from volume discounts through standardisation of products and components.

The Partnering agreement was introduced in June 2004, and there have been significant tangible savings year on year since.

The partnering agreement saw LHT identifying supply chain partners who could bring not just cost savings, however important that was, but value added benefits to the table.

They selected Worcester Bosch as boiler supplier, Sentinel as water treatment supplier, Danfoss as heating controls supplier, Myson as radiator supplier and chose to work with just two locally based contractors - Warmer Heating and Huyton Plumbing and Heating.

All the products they needed were held in stock through the local Plumb Center branches and LHT benefited from the volume discounts that operating such a system offered them.

In addition to providing 'standard products', the manufacturers involved provided hands on training for those responsible for the installation work - for example Worcester Bosch at St Helens College, and Sentinel at its then headquarters in Widnes.

This was key to improving the quality of workmanship that would be vital to making the partnering approach work.

As well as reducing costs, improving efficiencies and making life simpler for LHT, operating the system they had in place took risk out of the whole process for the partners too.

Worcester Bosch agreed a three-year warranty instead of the usual two on their boilers, knowing that the quality procedures now in place would ensure that the boilers were installed properly, that every system would be properly treated using Sentinel products and that the system design was one that would give all the components the best possible life expectancy.

LHT realised that cleaning a system and inhibiting it, whilst one of the least costly processes was arguably one of the most important.

Carried out improperly - or not at all as had often been the case previously - would throw the whole 'package' into disarray.

Sentinel introduced a testing regime as part of their input to the Partnering agreement, to ensure that every system was indeed cleaned and inhibited - a random testing regime that saw samples of system water sent to Sentinel to test.

Initially the complex chemical reports sent back to LHT were seen as too complex, so Sentinel and LHT devised a very simple 'traffic light' system - red was a fail, green was a pass and amber was a pass but one where attention was needed.

So what has been the measurable success of the Partnering approach?.

The total savings to the Trust over the three year period are currently estimated to be in the region of u1,400,000.

The potential savings in reduced fuel bills to tenants of LHT will rise over time to an estimated u750,000 per annum.

That's some improvement over a relatively short period of time.

And LHT is confident the savings will continue to mount up in the years ahead.

They are so confident, they are happily sharing their experiences with other social housing providers in the Northwest, so that they too can benefit from the knowledge they have gained over the past three years.

The merits of the project were validated during 2004 with the awarding of Construction Excellence 'Demonstration Project' status and the Partnering approach has won a number of awards in the past couple of years.

LHT's Divisional Director - Asset Management is Simon Brown: "We've come a long way over the past five years and the tangible results of the three year's of partnering have proved to us that we have adopted the right approach in this particular area of our business.

Apart from the monetary savings and the savings that have resulted in fuel bills for our tenants, we have a process in place that works.

We have stability and continuity in the work we do.

We have system designs and products in place that everyone recognises, understands and supports.

We can plan things better.

We can purchase better.

We can run our business better.

We've worked well with all our partners and the relationship we've had with Sentinel is perhaps as indicative of the benefits to an organisation like ours as any of them.

We talked - often.

We worked together to find better ways of doing things.

We met frequently and addressed the rare problems sensibly and quickly.

They kept to their side of the agreement.

We kept to ours.

It has to be the way of the future.

Sentinel's Chief Executive is Gary Roebuck: "We are involved increasingly in this type of arrangement but partnering with LHT has been as a smooth a path as we've trod with any partner.

We always knew exactly what was expected of us.

We knew that we could bring new ideas and suggestions to the table and they would be listened to.

What we thought was a thorough response to LHT's requirements would sometimes be too complex - too comprehensive.

We were able to revisit that situation and agree a better way forward that met both of our needs.

It's been an eye opener for LHT and for us and I believe we've come out of the partnering approach stronger and better equipped to provide the higher levels of service that social housing providers need from us." Because of the OJU requirement to re-tender every three years - which whilst sensible in some respects, can have a negative effect and introduce unnecessary disruption if the partnering agreement is working well and delivering above target savings and doing it effectively - the future of the LHT partnering arrangement is far from certain, but you would not hear too many complaints from any of the parties involved if things were to continue for the next three year cycle in much the way they have in the past three years.

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