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The Real Cost of Quality - EP02

71m 43s

The Real Cost of Quality - EP02

This conversation explores the changing perception and critical importance of quality assurance in the construction industry. Participants, including a quality manager, a software founder, and a subcontractor MD, reflect on their careers, noting that quality was historically viewed as a graduate's administrative burden with little strategic value. However, experiences in leadership and on the subcontractor side revealed the substantial financial impact of poor quality, with waste from rework and errors estimated at 10-21% of project costs—often exceeding typical profit margins. The discussion identifies a cultural problem where quality is reactive and disconnected from value. The solution lies in shifting this mindset, leveraging technology for better data integration, and fostering accountability throughout the supply chain. The consensus is that treating quality as a core, proactive process—rather than a paperwork exercise—is essential for reducing waste, improving profitability, and delivering better-built projects.

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[Music] Thanks for joining us today. So this is our second capital conversation. Name hasn't got any better since I last episode. We sort of thought about what we want to talk about and the one that jumped off the page to us is a really good, interesting conversation. It would be quality and where that's placed in the industry, the moment and what it looks like. So this time we've actually got a few people from external capital and we're going to join us to talk about it. So firstly, we have Josh who's our quality manager. So Josh, welcome. Welcome. Today, thanks for coming. Damien Quinn, founder, CEO of VizzyBuild, which I'm sure a lot of people we familiar with, but probably the leading QA platform in the country. I'd like to say so. Yeah, we're saying it now. Beautiful. And Steve Saras, who's the MD and one of the owners of PCF, the former business. So thank you Steve. And I should say an extra thank you because I've made the guys do this at three o'clock before a long weekend. So make sure we squeeze every drop of one out of the work day. So I thought I might start by just asking people what got them into quality, like what was their journey that, because you've all got a little bit of a diverse background and what was the thing that made quality a bit of a calling in some regard and probably slightly different question with Steve. So Josh, maybe you go first, what was it that got you into quality, and what was your background leading up to that? So my background started in the Royal Air Force in the UK as an engineer officer and had these massive teams and we're doing very exciting things and I came across to Australia. I got asked to join construction as a bit of a win, if I'm honest. And that was you were still with the Air Force at that point? No, it's working for a civilian aviation business in Sydney in Bangstown. And I got this call and I said, look, your skill set is transferable, come and join construction, you're going to love it. And I saw it sort of thinking, is it going to be that exciting? I jumped into it and it was the best decision I'd ever made. Because I realised that I love seeing projects emerge around me. You know, something you can physically feel and see. And what role did you start? Did you start in quality or? Now engineering assurance, which is sort of a bit of everything. It's making sure that what you build is safe and fit for purpose. But also that what you've built is compliant. So it touched across all realms of design, construction, TNC, completion. Yeah. And I haven't looked back since. And what kind of companies have you worked with over that journey into construction? Like obviously with capital now, but what are the companies you've worked with over that period of time? So pretty much all the tier one infrastructure businesses in Australia. And then an internal developer builder, which is well known across Australia before I came to join capital. Yeah, which yeah, that was where that wasn't it? Yeah, absolutely. And being with us now for coming up to sort of what? Coming up to probation, we'll probably just sign that off at the end of this. That's all right. And then we'll move forward. Yeah, great, great, great. All right, excellent. So Damien, so we actually three of us worked together at multiplex back in the day. And tell us your sort of journey into how, because that would be quite unusual. I wouldn't, if you had asked me who would be likely to start a software company all about QA, I'm not sure your name would have jumped to my head, but that's not a gris as much as just. No, I'd probably agree with that. Yeah. So yeah, no, you're right. We spent, well, I spent 20 years ago, was when I first started at multiplex. And obviously I've been out of the business for five years now, but close to 15 years working in that business over a couple of regions. And I'm not going to start spending all that time thinking about quality. You're right. I didn't, if you asked me 10 years ago, would I be running a software company? No, I'd probably say, well, it was ideally a director at multiplex and continuing to work in construction. But throughout that time, like you do, these large businesses have these incredible processes where you work through for graduate coordinator engineer, supervisors, project managers, senior project managers, project directors, and you go through all of these stages through your career. And what I noticed was that each of those stages, your approach to quality seemed to get watered down as you went. And particularly, this is pretty consistent across the industry. It's obviously changing, the culture and the industry is changing now. But particularly in the early days is that quality was a graduate's job. And so that was my first exposure to it. At uni, still at uni, then out of uni, into projects was my first exposure to it, because you had to do it as part of the graduate program. You were heavily involved in it. It was obviously a paperwork process that someone needed to do and to grad and see my best person to do it. And then really when I started to pay attention to it, it was later in my career, like the one pitfall of staying in the same business for 15 years, as you start to see your mistakes coming back over and over again. But you also start to get that opportunity to learn from them. Because you would have, I'm sure, like all of us would have, you would have thought quality was shit work, where you were a grad. That was just the worst job. You had to grind it out and you just, you made me do your quality. That's right. Steve had a lot of work before me a little bit later. And he became the quality coordinator. And that's what happened is, you do your time, you move to the next role, and it was in some regards, like it's almost like penance. You have to do that. It's just a thing you have to do. Yeah. And I'm sure it's a topic for later, but it actually creates this unfortunate stigma around the quality process. So it feels like something you have to do, not that you should do. So why, what was the light bulb moment for you that sort of went actually? I should assume I'd imagine you took quite a significant risk going from a pretty well-paid, you know, construction gel been in a good company to start up, contact with no revenue item. No, I had a lot of people questioning my satellite when we did the process. Like, absolutely. You go from a secure golden hand cuff job into zero security at all, but the problem was there. And to me it was obvious. It was obvious. It's like once we got through that process and realised the way quality was managed, but also the opportunity for improvement. Like the opportunity cost associated with doing quality properly is something like 21% of bill cost. Like it's a monumental figure. And once we started to realise just how big that opportunity was, and this was long before we decided to start a business, we started really focusing on how we could improve this within our own projects, particularly the project that I was managing, is how can we build this better to try and minimise this, make more margin and get out of the projects in a better position. That was not a really started to think about quality differently, it's like what that opportunity was. But the light bulb moment and the reason we found that the business was we realised that the problem couldn't be solved on any one project in any one business or in any one region. It needs to be solved as like a cultural change piece across the entire industry. And that for us was the opportunities. Like if we can take the risk and be willing to do this at a large enough scale, to change that culture towards quality across the subcontracting group, the suppliers, the consultants, the general contractors, the clients, everyone else that's involved in that supply chain to deliver a magic construction project, then we can make a better quality project and we can have less waste. Steve, so you by way, maybe introduce your background of how you've got to where you are today and how you've gone through the industry to get there. I first started like yourself and Quini, a multiplex back in 2010. I actually didn't start there, I started. I've always started back today. I met you through multiplex, but I was there from 2010 to 2020. I went through a similar process of I started as a cadet, did dock control for three months and then became a grad and then did quality safety for one or two years and then did structure coordination and all the coordination roles that you need to do to become coordinator, senior coordinator, then assistant PM and eventually PM on swamps and central for multiplex and then Queen's place before I left. So looking after some 70 and 80 story buildings with teams and whatnot. Obviously from there I jumped to capital group for four years where I looked after a different variety of projects that I'm probably used to. So going from large apartments to light industrial, commercial, some apartment jobs, and then from there PCF. So PCF almost now for two years. So that's sort of my progression through my career in the last sort of 16 years. So what's your thoughts about how do you think about quality now? How do you have your work build aside and sort of all the stuff that Queen's making about that? Well it's funny, look, my first real quality screw up in my entire life was when I was a grad. And Queenie actually was giving me a shoot-a-be at it just before we walked in. But I left out seven post tension strands in a slab. I left out all the PTA and poured the slab. And we realized after we poured the slab that we left out the PTA, which wasn't great. And we had to put massive steel beams on the underside of the slab to reinforce it and make sure it's in fall down. So my biggest quality mistake in early in my career was actually not looking at the PTA and making sure that it was in before we poured the slab and guess what? We poured the slab and no PTA. So that was one of my early learnings of quality. And that's stuck with me for a few 18 years. It was one of my biggest things that I just, to this day, you go, oh my God, Bluck. I'm going to pick on you, Bitty Steve. Because I would say, tell me if you see it differently. I would say that you probably for a long time, probably up until very recently, you would probably have seen quality as like a paperwork sort of. Yeah, you just want to get done. Yeah, and not necessarily meaningful, like not that you don't want to build well and do the right job. I would say and I reckon there's a lot of people in our businesses and other equivalent businesses, subcontract businesses, that see a lot of the quality work as paperwork it doesn't have value. Would that be a, would I be, if I said that, would you be saying that I was, that's an incorrect observation? - No, I think it's true. - Yeah. - Yeah, I think there's definitely, I can't speak for other subcontractors, but yeah. - And even when you're with us, like I would say-- - You just want to tick the box, make sure it's right, move on, is the information that's going into the box right? No one probably checks it, no one probably looks at it. But it's probably a means to an end to some degree. But I think now being on the other side of the fence and seeing the financial impact of the quality, you probably start to take a bit more notice of it. That's for sure. Like, so-- - I was going to say, I was going to jump in on that for a sec. This is one thing we've seen, is that the opportunity for quality is actually the subcontractors. The subcontractors are the ones that are genuinely bearing the risk. They're so shaded with the build and the opportunity for margin improvement is there, first. And I guess is that change your attitude, like going to that sub-ee side and seeing how much waste you're dealing with? - Yeah, 100% like we are starting to see where the weak link is in the process. And just by simply identifying where all these little weak links are and making them stronger, we're creating a stronger chain along the whole way from even our sub-ee, it's like, we're not all in-house, like we got subcontractors, steel fixtures, subcontractor post-tension guys, subcontractors surveying. - I don't think it would be incorrect to say that like a year ago, you would get virtually no QA of them and not really talk them too much about-- maybe the PT guys, but like you wouldn't be talking to them a lot about QA. - No, zero, like zero. But you look at surveying recently, we've looked at surveying and looking at how we can integrate the surveying team more into the quality process, rather than the old school method would be send as built. Hope it does something, move on. And maybe it sits on someone's email, but integrating the sub-ee into the world of what we do and flagging the issue from the sub-ee to the sub-ee of the builder actually provides the value and the customer service at the end too. 'Cause we do a better job, we pick it up early, we flag it and we fix it. So, whereas previously, you wouldn't have-- No, you'd just be like, oh, yep, six months later, oh, yeah, the as-built was wrong. Did anyone look at it? No. So it's about how do you flag it early, fix the weak link, make it a stronger link? And they'll always be weak links. No matter what, 10 years from the other weak links, it's just about finding them. That leadership in supply chain within supply chain is really hard, right? So, how do you distill that down as in getting them to do it? Yeah, and lead and manage that expectation on my real answer? Yeah, it is, we're in the-- The whole thing here is, this doesn't need to be out about, it's also great and we're doing everything perfect 'cause that's everyone knows that's not true, right? So, it's got to be about where we're at and what are the challenges we're all trying to solve. To get them to do it, I think you just-- Hey, if you don't do it, you don't get-- Job. Like, at the end of the day, you need to do your quality 'cause at the end of the day, why do I need to do it? You produce the data, you produce the inputs and the outputs, you tell me what's wrong and then I'll fix it or you'll fix it 'cause you've identified it. So, I think it's about now making our guys a bit more accountable that sit outside the PCF bubble. Yeah. And we have a few of them, but we still need to make our own bubble accountable too, right? And there's a whole range of things that we're trying to fix inside our own bubble, let alone the little bubbles that sit outside our one. So, there's heaps of work to do. Everything from concrete pours to Rio to PT, to flatness of slabs to, you know-- But you-- I don't know that we-- Would you have a good metric on what you think doing work incorrectly? Like, would you put a percentage on at the moment or would you-- What would be your guess of how much it's costing you of not quite doing things right and having to rework it or go back or fix hobbs or flatten floors or whatever it is? It's job by job basis, but if you had to 10%, not job cost, but labor, labor cost in some material, like to go back and go, I've got a-- I've got to build a job at 100% and then go back and do another 10%. If you can save the 10%, that's 10% of stuff you don't have to do, that's what we're trying to find out. How do you fix that? How do you fix the 10% in not really-- It's a pretty impressive opportunity. Yeah, especially on big value jobs. We-- and I think my story of quality is probably very similar to Quinnies and Staves, which is I work for a big builder-- You know, a couple of big builders, which is the job that you kind of had to do. You don't really care about it. Because you clean, that's not a criticism, I think it's just normal business. It's just a job you had to do. You wasn't your passion. You grind it out a bit. How meaningful is the work? I don't know, probably not that. Probably a lot of times Quinnie, it's retrospective. Oh, yeah. It's Friday, others, you'll-- Yep. Got a whole lot of ITPs. I need to chase up and sign off. So I think for asset capital, where quality really started coming to focus for us is just after COVID, when the inflation came through. Obviously, we had a whole lot of fixed price contracts, but the cost of everything went right through the roof. And I think Steve, you were still being with us at that point. And basically, what we were seeing was, oh, gee, everything's a lot tighter. Every job is under pressure. Our margins are under pressure. It's really, really tough. So we implemented a cost control board. We're basically Dave and I would sign off. Yeah, if you wanted to buy something, if you wanted to buy this pen, you had to come into the cost control board and say, to Dave and I, hey, I need to buy another pen. It's a probably a stream example, but you get to vibe. And usually, we'd be like, why do you need a pen? You know, so-- What we-- yeah. But what we did during that period is we wrote down everything we were spending money on, the outside of subcontract, whether it was a variation or a purchase order or whatever it was, we were writing it down and we were making a big list and categorising it to sort of where does that fit. And what we found was, I think that year, we might have turned over 360 million dollars. I think we made a $6 million profit, which is not very exciting, but in that environment, actually, all of our external finances were like, oh, that's incredible. A lot of people lost them a lot of money. Most people didn't make money that year. Most people lost, so to make anything was OK. But we actually-- we added up the waste, so not even inflation. Don't talk about inflation. Just talk about things we have to do twice, things we have to rework. And we reckon that there was about $12 to $14 million of waste that we could have kept as margin. Had we just not made all these mistakes. Triple margin. Triple our margin. So when we went through and looked at it, it was very much like, oh, yeah, these are things that always happened. We were like, gee, that's a lot of money. So then we became really obsessed on like, well, why do we have to make that waste? And I like to ask people in meetings now, how much waste as a percentage? Do you think is in construction? And if you would have put a percentage on all the waste being human effort, money, reworks, what would you try and put that percentage at? I reckon I'd go 18 to 20%. Yeah. And so only because we read a study on it's 8% and 21% is what studies have shown us. Yeah. And the reason it's more than you see is because it's so hard to measure the waste you don't know about. Yeah. You reckon 10% comfortably. And I look at it more from a labor hours point of view less from a, like material for us isn't huge. For example, you screw a shower set then it's not so much about the material. It's more the labor hours to go and fix it. Yeah. So it's just man hours from our point of view, like, and to put it at 10% on it, I'm thinking more labor hours across the life of a project. If you got 60 or 70,000 labor hours. And that doesn't pick up F and two. Like for us, like, you screw up a shower set down, we will have to chase you up and do a whole lot of work administratively to get you to fix the shit and verify the shower set down drives. 5% percent, then you're all percentage. It's funny when you add it all up and probably someone's gone up to that to go work and go, I can't work there because the shower set down is no good. And when you actually think about it, yeah. So what's the most important thing to a good build project is sequence? Yeah, yeah, yeah. And you ruin it. And I ask people, and usually people give me a number when I say the waste of somewhere between 15% and 50%. And most people are close to 50%. And then you say, oh, but you know, historically, our type of construction is probably a one to 3% margin business. If you look over history, but then people are really accepting that it's like 15%. And then our big thing was the biggest stuff is probability. I think like the biggest waste is quality. But there's other bits, but quality is a big, big part of it, like just that. And it's just inbuilt that, you know, like we even, we're really accepting and we do it to this day of like, oh yeah, we're going to have 20,000 defects at the end of the job. We're going to close out and we think that's really normal and it's really abnormal. But again, it's hidden because you're buying it in. So like take a trivial example, right? Window wall, window wall and defects like I was first exposed to a move acting great volume and you go, okay, you build an apartment tower 40 levels or whatever and you've got scratches on window frames all the way through and you just accepting of that and you've already bought that in with the trade package. But it's just completely wasted effort and money on both sides of the fence. So I might ask you any question. So you obviously we see a much smaller being yet of the industry than what you would see. What's your view on where the construction industry is in terms of quality? My perception is that the mindset has shifted in the last three, four years of maybe some of the big failures of facade cladding and precast up in grad and stuff like that as sharper and people's minds a little bit. But my perception is there's a shift in the mindset. What do you see in the wider industry? 100% because there's a shift in the mindset. I'm not going to say it's across 100% of the industry. And like we see that regularly in this, there's different industries that we focus on as well, but if you're just talking in the major commercial space to start with, I'd say 50 or 60 minutes of the industry is working up. What is interesting that I think the entire industry is working up to is the conversation of waste. And so like a lot of when we're starting to talk to a new potential customer, we have to explain that problem over the waste. And a lot of people come out of that not believing how bad that problem is and you nailed it before. Every subcontractor's price is based on the price of their previous project. So if they had 10% of waste burden to the last project, it's 12% on this one. And then it just, at the next one, it's more expensive. It's a people don't see it. But you just don't, people aren't aware that this waste exists in the industry, all that it's an opportunity to fix. And so we are seeing more people going that way, but we're seeing people starting to realise like it's ever before they have major problems. They have big facade problems. They have lots of wall leaks. They have all these things that have compounded over time. And they're like, we need to fix those problems. But that's the education piece. We're trying to really nail home is that yes, you're losing a few percent in post completion or DLP related issues on big ones that might pop up job to job. But what about the rest? And so I was like, yes, there is an opportunity for a few percent there to like climb that back and you shouldn't be spending that and the more it declines and thin that in the DLP period post completion. But you're missing the other 18 to 20% that's happening during the bill phase. And that's where we want to bring their focus back to. But we still meet some businesses and it's still a paperwork exercise that might well talk to us as a digital solution. Not to change the way they do quality, but just to save a couple of man hours on inputting information. I can do my meaningless paperwork faster. And that's when we walk away. Like that's just, we have no interest in working with customers like that because it's not quite for our reputation, but it's not the exercise. We actually explain to people that when you start using our software, you will do more than you were doing before. Because the problem with the processes of the past was that it was very easy to hide what you weren't doing. And everyone has these really complicated and often bloated systems. And then they go and implement them properly and very quickly they realize how poorly they were doing them. And so the other thing that we need the industry to like focus on and that they are saying to focus on is critical risks. You can't fix this whole problem overnight. It is, it's systemic across the industry. There's an incredible opportunity to fix it here. But don't try and do it all nuts. Where are the biggest risks? Where's the biggest opportunity to focus on that? Fix that and then do the next one. So what have you seen? And this probably question for both Josh and Damien, because you've worked across other industries like where do you see the industry that we would participate in commercial construction compared to infrastructure or I'm not sure if you guys do much in oil gas or mining. But where would you say our quality maturity compared to that? I think commercial residential construction is at a lower end of approach to quality. If you were to compare it to infrastructure and high risk industries like oil and gas, 100%. But the question you asked yourself is how much value is that quality process added in infrastructure? So if we would adopt just a straight infrastructure approach to it, it wouldn't work and it wouldn't add value to either our customers or our business. Nine times out of ten on the big infrastructure projects, it's linked to practical completion and big payment milestones. That's why the QA is retrospective. It's not real time. It's not adding any value to the works. It's a last minute paper dash where people are filling things out on a rainy afternoon. What about you? It's an experience. So it's, again, you couldn't you couldn't bring one over to the other, but there is a lot more checks. Actually, I wouldn't say a lot more checks in pleading infrastructure projects. And there's this misunderstanding that infrastructure projects are far more complex, far more complicated, more checks are completed. But the reality of commercial projects is every room is different. Every building is different. Every site is different. And the actual complexity and risk associated with the commercial project is actually far greater. And it's also part of the reason why the process that's used in infrastructure often doesn't copy well across to commercial. So everyone always talks about the ITP, but the ITP isn't actually what we do in commercial. Like the infrastructure follow, there's really complicated ITP and planning process that leads into ITCs and ITRs. But then you've got all these external bodies. What do I know at ITPs? I don't want to embarrass myself, but what are all the other ITPs? It's effectively the difference from the plan and the checklist. And so the idea of the ITP is that this is what we are planning to do. And the ITP is often signed off by an external party or an authority who's actually completing the inspections on the project. Then it dictates what needs to be checked. Whereas commercial does a combo between the ITP and ITC. But there's no requirements to do a ITP. But generally, like in commercial, we'll plan out a project at the start and build the inspections associated with it. That's effectively doing the ITP process. But that actual inspection you're doing is an ITC or an ITR. But for the infrastructure space, they're often doing a far greater volume of potentially unnecessary inspections. And you're right then by far the greatest of getting done later. They're all getting done. There's major infrastructure projects right now that have full teams on them still purely wrapping up paperwork. And they have to wrap this paperwork up in his handover packages to hand over the final ones the projects. And that is a hundred percent paperwork exercise. There's no longer any benefit being ripped out of that. And maybe that's a good segue, Josh, to one of the things that we've been working on is like we're probably guilty of having a lot of enthusiasm, which I think you'd agree with, Quineas. The capital, we've had a lot of enthusiasm, quite a lot, but we've probably made our system overly complicated and almost impossible to comply with in that we created too many holdpoints and too many things that, you know, I know that was one of, Steve, that's one of your your criticisms of some of our QO. Well, you've been quite vocal about that. So yeah, maybe Josh, what's the sweet spot or what's the challenge that you've been trying to solve here? A capital group in terms of, you know, getting the right fit solution to make it more meaningful, because I think we, I think if I was totally honest, I think we could be guilty of in the past. We made it so complicated that we've through enthusiasm created it to become meaningful busy work, meaningless busy work. Yeah, I think that's fair. Those were my impressions of coming into the business that we were trying to do everything through this one lever of construction quality. And the challenge really on every single construction project, as we all know, is, you know, it's a collection of people trying to achieve one aim that's there in that place for, you know, fixed period of time, you know, the builder and the trade partners and you're trying to lead and develop that culture for one two years. And when you've got this big burdensome quality system that you try and implement with your team who may be new to the business and then trade partners and people you've never worked with before, what you're trying to aim for and achieve gets lost. I think about technology a lot and technology for the industry has never been more capable than it is today. But we have never been sort of more inconsistent in how it's used. So if you've got a big burdensome system, with people who are trying to implement it for the first time, with trades and people you've never worked with before, it's no surprise that you don't achieve the outcome you set up. Yeah, I think our biggest thing is to your point, Andrew, was it being too big? Yeah, from PCF's point of view, a sub-e point of view working for capital and others, is that for our business to adopt a quality process that our guys could learn as well and making sure that we could have a standard eyes way of how we do it across whether it be capital or braids or whoever it is. So long as our guys can start to learn the process in a uniform way, that's probably where we went ahead in the next few years that we do the right spec summary, we do the right thing for each individual job and learn what's actually in the spec and then distill some of that information into job-specific ITPs in a framework that's all the same. So that our guys know, yep, I know the layout, I get it, but this job, well, this job's actually got class two finished, not class three, or this job's got, you know, whatever it is, right? Like we just want to make sure that all of our jobs have the same framework, but they're all individualized per job, but the flow is the same. So the guys know what they're doing. So you've absolutely nailed it. And I think that's where we've got to get to, because if you don't get to that spot and you've got all these burdensome requirements, you lose sight of what's actually critical and what's important. But do you think, I mean, we should hear what, what do you think is on this, because obviously you'd be out there trying to talk directly with subcontractors. One of my big criticisms of subcontractors of which I have many is that I actually don't think a lot of them have a real approach to quality themselves. They have a, they just respond to what the builder wants. What are you seeing in terms of subcontractors, what they're doing or not doing or what, what, who are the exemplars in the market? I'm going to add to your previous question then to answer that is that the approach you had that that you've said you're changing was, was technically correct. Like what you were trying to do to the end is a thousand percent technically correct. Technically correct. But the execution is incredibly difficult and you're right. There's, there's a real mix of subcontractors in the market. Some are incredibly proactive and like you can hear what Steve's saying today. I'm like, when I was last in my uniform work, I'm talking about this level of detail and how they're going to focus on the different specifications on a project. We set it up. This is a relatively new awakening, I will say, but yes. But this is what we want to encourage. And so that was my, that was actually my only criticism with your old system. Was it, whilst it was difficult to implement, you were probably going to get to perfection eventually. But the risk with it was that it was going to stifle innovation. Because if we spoon feed the entire industry, whilst it may be perfect, but if you spoon feed them with the perfect information, we don't get the benefit of like crowdsourcing that improvement across the industry. And so I think for me, that was the biggest risk with the old system. Whereas now, way. where the industry is heading is we need to bring the subcontractors along with us. And we kind of talk about it at the carrot and stick. And so when we go out to see your subcontractors to try and then educate them around how to use our system or our platform with your system, we say we're the carrot. Because we want to go out there and I want to meet with the directors of the business and explain to them, this is your opportunity. Number one, you don't have to pay for this. Capital's already paid for it. They're helping onboard you. We're here to try and you're going to help train your workforce and get you up and running. But you can now actually look at your business and go, what's costing you money? Where are the opportunities? How do I improve on this? How do I make more margin? And the industry is starting to take note. And you'll see it, like we have a large number of subcontractors who are customers. I think we have more subcontractors as customers than we do general contractors and builders. And it's because they've seen the product from the Luxus capital and our other clients mandating their use on it. And maybe they push back at first, but then all of a sudden they see the opportunity. And we have subcontractors coming to us and they're saying like, we are spending less money coming back to projects where we're using you versus whether or not using you. And that's why they'll come on as a customer just to make sure they get consistency across the market. What are those stories? Is there examples where you've seen businesses who've actually made a significant improvement in their business by really leaning into this? And this is why I said the sub has got the biggest opportunity. And like a lot of these are like anecdotal evidence because this takes time to bring through a business. But we have one company in particular that's doubled their workforce since we've been with this and half their defect spend. And it's not half the percentage of work. It's like they've twice the work and effectively now quarter of the percentage of defects that they had previously versus what they were doing before. And often it's for them. It's as simple as being able to prove they've done it right. Not having to go back. And this is that rework piece. It's like they were often having to go back because they were told to do something but was already done or but they couldn't have evidence with it before. And so like the simplest example has been called back to a project to do something and getting there and it's already done. Like that's just the simplest wasted hours that I could save and things like that. And then obviously they can hand over projects now with absolute confidence that they're done right. The other one that really sells the directors of these businesses is that it's very hard to control the workforce. Like you've got different supervision and management structures across your project and you're reliant on how strong they are of managing that workforce. And you've quite frankly got some part of the workforce that doesn't care. It's Thursday afternoon before long weekend. I just want to go home. I'm going to slap this membrane on a leaf. And then someone else is going to turn it to the job next week to finish it. And maybe they'll turn up on it's wrong and they'll redo it. And that's the way the opportunity for that waste is. There's a lot of the workforce. There is really no consequence of that. Lots of you are doing the working correctly. The scary thing is some of the workforce that get paid by the meter. I'm not suggesting they're doing it maliciously. But if they're coming back, they're getting paid twice. And it still adds up over time. Whereas if we can get into a position where that director of the business knows that their employee or when they've had to subcontract, subcontract out like you do sometimes, it has to verify the work before they start that it's ready to go. Verify the workers as they go through the process and hand it over. Well, they're not going to do it wrong. Because they're immediately going to hell to account and they're immediately going to get bought to consequences. Whereas if you can just get everyone as part of the party to verify that they're doing the work properly and that their work is ready for them, that cuts out a huge amount of that rework that's just hidden in the industry at the moment. So I would have said 10 years ago that the challenge to QA was probably resourcing, like just having enough people to do the work, like to do the paperwork properly and all that was actually it was a real challenge in terms of having enough people to actually do that. Like it's, you know, enough assurance people to actually get around. And I do think that, you know, platforms like yourself, like yourselves, when you have, actually eliminate that problem. Because I don't think there's a technical barrier anymore. Well, it should be everyone's job. Everyone's already saying they're doing the job and this is why we track active uses for every project. Every company can track their active users per project. And when you started, like what would you assume? You've got to graduate on the job that's maybe doing the quality. That's where most businesses start. They've got an active user. I've got money or projects. It'll have 50, 60, 70 active users. More than half of them are subcontractors. Well, that's what we're now moving to and that's where we're encouraging it. We're looking at that out. This is one of the instructions for it. We're looking at our trade partners and going and he will go to a PCF for example and say, explain to me how you have one user of this system on this project when you've got 100 people working in the, how could that possibly be true? That's been a fascinating journey over the last fortnight. You know, I've gone around what, six projects over the last fortnight and you go, okay, there's one individual from a subcontractor who's carrying out the quality assurance for us on those works. And then you try and dig into the, the why is that the case. And half the time what you see is we've set ourselves up to fail because when we've been discussing it with a subcontractor, a trade partner in onboarding, we've gone straight to a project manager instead of discussing with the form and directly and even discussing the content of an ITP. This is what you need to verify. Is that correct? And we've never really engaged at that level and you've got to really bring it to the shop floor to the supervisors on site from both our supervision and the supervision from trade partners. And I think that's, I, and Steve, I can maybe introduce you to sort of reflect on that because that's probably a big challenge you're going through with your business at the moment is going from it being, yes, we agree we have to do a QA and that's something we give to a side admin and he's doing it to actually, I need to get this to be done by the leading hands and the form and on the flooring position. How have you approached that challenge? And days gone by, we would have a form like Lucky just mentioned and a side admin that one admin would carry out the slab, the core, the precast, everything on a job that might have the 1000 panels, 100 slab pours and 25 core ports. And then all the dot points in between would equate to maybe 40,000 dot points. So you're one man doing it. So we would call them hold points in the industry, Steve. Dot points. Within the dot points are a whole point. It's a little hands in one. We build. I do use it. Yeah, that's right. We got one. We got an active user here. I love it. Hands in full stock. Stop the work. But no, what we are trying to do is is elemental break it down. So we are trialling on a few jobs at the moment where the precast, rigor installer is doing the quality for the precast rather than the admin who sits in the shed. And you know, he might be dealing with RFIs for Rio. But he's not looking at the work being done. No, no. So he's thinking, like, which is what we want. So the precast, rigor, the guy putting the panel in and it's simple taking a photo of the panel is a plummed, is the graph bed in? Have you put the talk on the bolt for the prop? You know, is the calibration certificate correct for the right or gone? Whatever it is, whatever our dot points hold points. We're trying to elemental break it down so that the people responsible for the area are doing the task rather than just the old school grad slash admin. So it's not perfect right now, but it is something we are trying to improve on to get the user base up. And what is the barrier to that? Is that purely that it just worked? Have you ever done before? It's probably never done before. It's education, you know, some are older, some are younger. The younger ones tend to find that they're much better at being adaptable to using technology. Did you get much pushback from? We tend to not really. We're tend to find that some guys are happy to do it. Like they're like, yeah, I'll do that. Like I'm just like, here's an iPad and we'll get them a thousand dollar iPad because sometimes it chooses the phone battery out of you. Have to do it on your phone. There's an iPad just carry the iPad with you when you're doing the precast because half the time think about it. The hook goes down to pick the next panel up. Well, you're doing 15 minutes. You're waiting for the next panel. It takes you like a minute or less to do the the ITP for the precast panel. Just do it. Cool. Like, so if we can do more of that and build our user base up across the business over the next one, two, three, four, five years, if we have, I think we've got about 400 now. Once we get the 500, 600, 700, if I've got 50 or 60 guys or 70 guys that can do it or 10% of the workforce instead of five guys, like it's very easy for me to manage quality and have more eyes on the problems. So I think that's the process that we're going to take over the next little bit. There'll be some failures in it, no doubt. But I'm sure there'll be some success along the way too. So I'll be interested to hear what each of you think is because I think we probably all agree that there as we discussed that the technical doing the QA is a solvable problem and it's probably solved. That really leaves the barrier then becomes a cultural problem. How do you see that we solve that or change that culture in the industry to make quality core business, not an afterthought and that's from build up through to the rigour putting in the pre-guised panel. What's your thoughts Josh? Well, I think just the word, I hope you've got an answer because that's what I'd for. I think just the word quality though alienates people right from the start because like the best case, somebody thinks it's a fluffy term, like worst case, it's just something academic that can just be completely ignored. Quality starts with leadership for me and we've all been involved in high performing project teams in that amazing space where left and right are you. Everyone is amazing and the job flies and quality is just a byproduct of that high performance environment. But if you don't lead at all levels from project leadership, trade partner leadership and leadership in supply chain, the game is lost because the technology just becomes an electronic paperwork system that you retreat to in the site office and it becomes detached from the physical works on site. So what work you've been doing? been doing at capital, like I'd like to think that we've always been, certainly for the last, I reckon five years, been very enthusiastic about improving our quality. What's been the tweak that you think you've had to make you a capital to sort of take that quality to the next level or our approach to quality to the next level? Threefold for me. One is accountability, making sure that we understand that we are accountable for quality as a business, and we distill that onto our trade partners. Because if we lead with that expectation, they understand that's the environment that they're working on, and they come to a capital job. Second, it's connecting the younger members of our workforce, the project coordinators who do the bread and butter of our work, physically with the works on site, which for some may be taking them out of that comfort zone of the site office and administration, connecting them with the packages that they're delivering. Third is embracing supervision from the trade partners and from our own teams, because I think for us and we're probably guilty of it that the supervision team have become detached from the site office and project management, bringing them back into the fold. Yeah, because ultimately it probably between safety and quality, that's really the fundamental role of this, especially for a builder supervisor, is that's really the job. Sometimes it blurs into this other sort of, not incorrectly, but getting things down sort of stuff, but actually fundamentally it's, hey, you've got to make sure that the trade partner is doing it the way they describe safely and doing it the way they describe from a quality point of view. And it sounds complex and, you know, theoretical, but it's really not because you talk to a former supervisor and say, you know, it's too hard for me to verify a whole point and take a photo and make sure it's correct. You stand next to them and go, well, I can put a bet on a dog, you know, in three clicks, and I'll show you, you can put a bet on a whole point, but verify a whole point in three clicks in a similar fashion to make sure that what we're doing is correct. What do you think, Queen? We have a different approach. Like for us, the perfect world is exactly what you're trying to do here, right? Which is shatter from the rooftops. This most senior leaders in the business, they do be making this as clear as day that this is what we're doing. We're making a difference. We all saw a 10 or 15 years ago at safety and we're starting to see it now in big businesses with quality. Interestingly, we're not seeing it enough. The fact that we're in podcast number two talking about quality is obviously the capital, this is what capital is doing, this is what we're pushing, but it's like, it's can't be one time. It's got to be every meeting, every event, everything you host and talk to the business, quality, quality, quality, quality, and it's got to become like propaganda. Business just needs to hear it constantly. We can't control that though. And so what we need to work at is how can we motivate that workforce that we need, the leaders to be telling, we need to work out a way to motivate them to want to do the quality. And so from us, it's a different angle. We obviously digitized quality, right? We're a software company, but we've got to digitize it in a way where it gives team something back. And so we have always said, and it was part of that vision from the start, is like primary versus secondary actions. Your quality assurance is a primary action because it's something you have to do. Like you're meant to be doing it, you're doing it anyway, it's happening on your projects. What if that could give you something back? So rather than having to build an Excel spreadsheet and call your precast manufacturer and ask the status of the precast panels, why don't they just do their quality checks live in a collaborative environment because they're meant to be doing it anyway. Well, now your project called known as your site manager, your site supervisor, your project managers, now I have a precast tracker. That's life. I can put it on screen in the wall in the office. That motivates them now because they're getting something else out of quality. And this is what the industry doesn't appreciate is that if you can digitize quality in a way where it's visible, everyone can see everything is happening simultaneously. And the benefits are so much more than just quality itself. Building a bit of quality job is obviously an enormous potential. But if you can see everything every time, there's opportunities to see here where you've got potential program risks where the precast panels aren't going to be ready because you can see when you've 35 panels at the next level, and only 12 of our quality checks done, we've got no chance. And so that is where the angle we see and what we want to try and impress is outside of like that big message. We want to give back to project tapes. Project coordinate as it previously had to do a lot of work manually. Then I'm motivated to get the industry to do the quality checks, do it properly, which then benefits everything else we're trying to do because it helps them. It's interesting because I think sometimes again quality can be guilty of being this like technical stuff like that. But it's how you actually connect it back to the human story because ultimately we're building buildings for humans. At some point, like it's, you know, even a data center is ultimately it's, you know, IT infrastructure for humans to use. Our vision of capital is, you know, build the best buildings, do no harm, and improve the construction industry for a better life. Right. So, and build the best buildings is not necessarily the most beautiful buildings because we don't really control that. We like to, if we get a nice architectural building, but like it's, we do it really, really well. But like the thing that I think about that's a good human story, not a good human story, it's actually a bad human story. But to me, is like, this is why you have to really be obsessed with this. He's like, I got an email from someone where that kind of falls through the cracks in our customer aftercare and, you know, we had this long-term issue where there was a leaky pipe that no one could quite work out. And it basically resolved in water dripping in a riser and their apartment was at the bottom of the riser. So the water was dripping down to the bottom of the riser and it basically got under the floor and basically made the whole, eventually the whole apartment unsurprisingly. And I'm sure you guys have all had this problem before. Got molded into the walls and molded into the, into the floor and all that sort of stuff. And this person emailed me and it wasn't this person actually, someone who knew this person and they knew me and they emailed me and said, oh, this person is now couch-sharing because they're so scared that the mold's so bad for their health that they, they, they're, they're, I think, at a small child are living on someone's couch because they, you know, they can't, the mold, they're really concerned that it's really bad for their health, which it is. The thing that really struck me is like that if you actually then boil through and think about that person as like sort of the bought an apartment or rented it whenever they've done. And now we, because we haven't been able to do our job properly and I say, we, you know, our trade partners as well, haven't been able to do our job properly. They now have had weeks/months of trying to resolve this issue with, you know, it's not because our customer care guys aren't trying to do the right thing, but you know, they've got lots of stuff they're doing and sometimes they get, they get things wrong. It's now, they've spent months trying to chase that and all the stress that goes with that. They've got to the point of going, I think this is dangerous. They've moved out and they're now living on someone's couch so they're effectively, like, homeless for lack of a better term. And then, they come to me and I go, well, let's fix it, which, we do, but that's a, you know, 12-week process. And what we boiled down to was that basically what it was is there was a, I think it was a stormwater connection that hadn't been glued. So the plumber had put it in, it hadn't been glued and it's like the most, a tiny amount of water, but it had compounds, it happens enough that in a rain event, the pipe, the stack gets water in it, a little bit of water trickles out at the side of the pipe, runs down, gets to the bottom, runs through the floor. And it's all because basically a licensed trade hasn't glued a pipe and we didn't, you know, we built this building really early on in our life. And that leaky pipe basically means for six months, this person is living this miserable existence because they've got this one pipe that we couldn't glue properly because we didn't, we weren't thorough enough to do our jobs properly. And we didn't have our trade system set up to do that job properly. And I think, so sometimes it can be this, you know, QA is good because it's good, but when you actually boil it down and, you know, there's millions of stories of this of people who have homes that are defective or, you know, that actually genuinely reduces the quality of people's lives. And that isn't really not unfortunately for us as an industry, not an unusual story. And the human story of that, of what that means for those humans living in that space or working in that office building or whatever it might be is really, really something that we don't want to be doing. And how, how you draw that dot to people so they can go actually the work that you and me, a new, Quini thought was meaningless work when we were 22 is actually not meaningless work. It's probably the most important work is like that, that, that is a real, that's a challenge. That's a big challenge because it's so far down the line and the people who worked on the project finished it two years before. Is it far down the line though? I take the parents on me at my daughter's school now. I should just hide school this year. And the first question they ask you and at these parents' gatherings is, you know, what do you do for a living? You know, I'm in construction. And to them, it's like a badge of shame because you're tarnished by all those human stories and all those events and what you're doing to them has no value whatsoever. I think you feel the consequence of it just when you introduce yourself as, you know, from your profession. Which I would, I can't, I actually think being a builder, self self self-conjulation. I actually think being a builder is one of the most noble professions in the whole wide world. Like, and I remember I had a university professor back in the day is like, if you think about human society, like the big things you need to have a modern society is need clean water. Well, builders in some way show before more infrastructure people give you clean water between sewer and water supply. You need rubbish collection. Like you need to be able to deal with rubbish. Like that's that's that and you need shelter. Like they're the kind of a pillars of a modern society and obviously everything that goes with shelter. So like in a way, like the society around us is what we build. It's the physical form for most of us. The most of us don't live in the bush. Most of us live in the built environment and the quality of the built environment. And so being a builder is, I would agree with your sentiment, is that people would not start from the point I'm starting out of like it's actually an amazingly noble profession. They would start from the human stories where we haven't got a right. So like I actually think it should be something like, you know, if you work in construction, it should be something you're amazingly proud of. But we need to live up to that role we have in society. If we've got to do it right, we are so important. Like, you know, you look, you talk about Australia right now. Like one of the biggest things in the whole of Australia is housing supply. Like, and obviously there's a whole lot of financial conditions to fund it and planning and all that sort of stuff. But fundamentally, you need the capacity and the building. How many other houses are we building wrong? And you hear about it in paper every single day. 100%. Like so that's the scale of the opportunity. And like I think the interesting or the exciting thing is like, you know, you can imagine a world where, you know, it's like all things. All things have a, like, safety is a good example. Like, safety's come a long way in 15 years. I can imagine a world where we have organized organizations like Steve and organizations like the company you're talking about where the penny drops to them. It's like, this is core business. This is not something I think about. Like this is core business. And we get that happening and we actually change the industry. So what do you think, Steve? You're, you're, you've got a, you know, 400 plus blue collar workforce. How, what do you do culturally to like get them to love it? Well, I think, I think there's a, I think quality, when you think about it, it really boils down the workmanship really when you think about it. So quality is a different, is a different pride to it if you're in the blue collar workforce. I say quality to you. It sounds like some guy with a pet, with a petal push like me, you know, where do you say workmanship or craftsmanship? It's got a different connotation. Yeah. I think at the end of the day, quality when you're distilled down is, is workmanship. And then I think you got to build that back to the love of what you do too, right? And where we are now in 2026, a lot of the older generation workforce are now coming to that, you know, 60 year old retirement age, where a lot of that love of, you know, whether it be formwork or concrete or steel fixing that real hard and fast old school love is dying out of the industry. And a new generation is coming. So there's a new generational breed of quality or workmanship in the industry. And I think where we want to be in the next few years definitely is, how do you train them to love it again? Because I think if they love it and love what they do, the workmanship follows and the workmanship then leads to the quality. You know, whether that's through apprenticeship programs, bringing out new people through the business and training and creating mentorships throughout PCF so that we can actually bring up a new generation of people that love what they do. And that could be simple as just, you might just love putting formwork deck up. Yeah. But that's, we love that you love that. But if you can love to do it right and with the right sentiment, the right quality, the right workmanship, then all the waste and all the other stuff follows, naturally. So it's what you thought about how you built it. Because I, I really cringe when I hear people tell me, I'm back in the good old days and like it makes me want to puke when I hear people say that. It drives me nuts. Because that's a simple project. It's a small scale. It's more time. Have you renovated an old project? Because usually they're completely cooked. So like there's a nostalgia of, it was all great back in the good old days. And I actually don't think that's true. And I really, we've got a really young, we've got a young team right. And like I hear people, oh, young people today don't work as hard. And I just think I totally require that idea. But the, the, I think the levers that you pull or what motivates them or how you motivate them might be different. I'd be interested to say, have you thought about what that means for you guys? Like what is the different ways you can motivate the workforce, younger workforce? It's a hard question to answer. I'll be honest, I don't think I have an answer for that in terms of what can motivate all the younger generation out there. But I think more responsibility, leadership, not just coming to work to work. And you know, a lot of these guys are out in the cold. They're tying steel, they're cutting timber. They're not in an office ticking a box. Like you've got 400 guys out there in the cold building, the building that, you know, you have to build. So it's a slightly different take on how you motivate those guys to want to be great at what they do. And some of them just naturally want to be great at what they do or they are great at what they do. But then there's obviously a percentage that come to work to work. I think you nailed them before though. With when you were talking about the apprenticeships and the education of the workforce, if I think there's one part of the industry that we're missing at the moment is people don't realise what quality is important. Quality, and I wish I'd just start talking about the word quality, but like it quality is just dirty word. It's just process. It's just pay workers. I have to do to get paid. It's this thing I have to do because my manager has chased me to get it done. And it's not like if you can educate that workforce to understand why they're doing impacts than next party or the next trade or the poor person that gets has to leave their apartment. Like I think if they're plumber to miss that bit of glue on that part new. And I can guarantee the person that did that doesn't know the artefact of what they've occurred. But that's why we've got to shout out from the rooftops. And it's like it's in universities, in the educations, in apprenticeships, when we're training people, when we're onboarding students. I'll give you an example. And it's the dumbest but simplest example of knowledge gap in the workforce is that we built a surfeit recently. And what you don't realise you're going to go take the sheet out. After you put it up, so I'll put it up, pull the concrete up, you're going to take it out. Hopefully you realise that. Oh no, I was in the episode too. Otherwise, you can get the formula back. Otherwise I'll get this. I reckon I'm holding up the entire fire sprinkler industry. The one thing we know is, we're like, why the? Is it so hard to take the timber out? It's because the guys as simple as it sounds, they hadn't been educated with formwork. Don't put in a hundred nails into the plot. Just nail the corners and move on. Over enthusiastic, like residential chippies in the industry, like the simplicity of put four nails in it. Don't put a hundred nails in the timber, because then you've got to take the timber out. Whilst that hasn't contributed to quality, it's a lesson in training, finding and making sure that they actually understand what they're building. And overall leads to better things. Which is probably the other sort of unspoken thing. I reckon in the industry is the training is absolutely hopeless. Yeah. There's none of it. And talking about, we all used to have little training programmes you'd do, but it's just not to the extent that needs to be there. You're talking about licensed trades and things like that. There's another whole hour we get to debate what we need to do to educate the industry. There's genuinely our apprenticeship for concreting. But it's like, how do you train people? It's like telling people stories of what goes wrong, because people learn really well from lessons. And that's why I think we all care about quality now, it's because we've made enough mistakes to realise how important it is. But 80s to 22 year old person, Maddie Mistace, has no value of the consequences of their actions. You've got to give them the horror stories. You've got to explain what could go wrong and why. That specific thing is so important, not because we're telling you to do it, but because it has such huge flow on a trickle of effects with the whole industry. So maybe we'll finish on a positive note. I think of an example of a story of something where you're like, you feel really optimistic around where we're headed and what we are, how are we making things better in quality. As much as I think we started from the long way back, I also think that we're making real progress. And I want to say, we don't mean just capital alone, I mean the industry. So what do you look at Josh that gives you that sort of glimmer of hope of like, oh, yeah, we can move the needle I see progress? I think that happened two weeks ago on a Monday morning. So one of our site managers from one of our data centre projects picks up the phone, gives me a call. Monday morning and trying to energise yourself for working site. Mate, I did not realise the world of VisiBuild till this weekend. And I've spent the entire weekend digging through it and I get it now. And I want you to come out to my project and tell my supervisors what high performance looks like and what they need to do. And that was just one of those motivating moments that just lifts you up. Yeah, this is the gamer in. Yeah. Yeah. Yeah. Because a good thing to do that is to is that one person will probably influence 15. Yeah. It trickles away. Cascades away. Can you put that on a billboard for us? I'm going to go a bit deeper. Okay. Two things. I want to give an example from some of this not capital, because I think it's important like you said, like what else is happening in the industry? You should because I've got a logical complaint. Your quality awards last year, I don't think we've got an nomination. So, you know, I want to I want to I want to I'll lodge my complaint in advance. What you need to do is nominate some people next year. I can't. I'm there. I'm there. Fair enough. We've got a large data center project up in Queensland, like it seems like everyone has to in data centers at the moment. But one of the biggest frustrations I used to have running projects and with all my run major structures is that there would be one person compiling everything for every single concrete pool. And particularly when it comes to cause and core shutters and closing calls. And this is a massive call on this project. And they've got something like 12 settles and every single one has to be sign of individually at every wall. Every cell has to be sign of individually. And to get that process to work, you would have to have the engineers on site full time signing up every single wall. You know, this project team has got to a point where they have every single trade. Every service has tried the steel fixer, the concreteer, the form worker, all the quality checks live in every cell. The engineer is in the project alive full time. So the steel fixer will do their work, take their photos, hit next effectively. The instructional engineer is getting notified. They go through the 85 photos that have been taken for that one cell. They review them and they come back with 12 issues that are to be rectified. The steel fixer is still there. This is minutes later, out there rectifying the issues associated with that wall and can close the shutter on the spot. And so now what we've got is it's changed to things. Number one, the engineer just didn't use to inspect every wall. We all know that. And it's a systemic problem across the industry. Whether they're not getting paid for it or they just can't get out there. But now I've got to a point where it's like at least they're seen every single wall and expecting every single one. But it's happening live. So it means you can quality is no longer solving the process down. They can go through steel fixer does it, signs it off within an hour, a sign off, everything's rectified, walls closed, full evidence, everything's audit logged. And we haven't had one person go back to the office and have to follow this paperwork. And so it's like it's one of those examples that I was really proud to see. And there's heaps of these across the industry. But it was a job I was at earlier in the week and I saw it firsthand. And it was incredible. And that is the excitement of that all the tech that we have available to us and everyone's got basically what 30 years ago would have been a super computer in their pocket. Like 10 years ago it was not possible. And now it's actually possible and it adds real world benefits to what before was just resource constraint wise, completely possible. I've got one other. And we've been in a podcast for an hour and haven't talked about artificial intelligence, which is incredible. We should re-brain this podcast capital dot AIC. You can do that. That must be episode three. Doing episode on artificial intelligence, that'll get your ratings up. Is that A.I. 12 months ago, right? There was a lot of hype around it. And I'm not going to say gimmick, but I'm going to say gimmick. Like there was a chat file a couple of things you talked to. People used it and went away from it and didn't get a lot of benefit out of it. What it is doing now and what we and particular in the industry as the opportunity to use it for over the next six to 12 months is incredible. It's like the opportunity has not existed like it does today even six weeks ago. And it's changed our approach to how we're building the easy build over the next six to 12 months. It's amazing how many people I talk to you. In the tech industry say, "Oh, it is so different." Like what we were talking about is now from 12 weeks ago or six weeks ago, it is remarkably different. It's like a hard time. It's literally a two-month change. Like anyone who doubted the capability of what this can do, needs to have a look at what it's doing now. But we want to get to this proactive approach faster. And what we as a business need in the industry needs is that to make quality better and make construction projects better, you need to know what's happening in real time. Like a paperwork process said behind it like, "After the fact, there's no point. There's no benefit." What benefit does it add after the fact? Nothing. It's actually worse than not being a fit. It's actually just another example of why. It's actually doing it retrospectively. It's actually just. It's even the clients asking for it if you don't do it, you don't get paid. But aside from that, it's like if we can get it in real time live, and then exactly your point that you've made earlier, and we're talking is like, there's certain things that you want to focus on and get done right. And you can't cover everything. You can't do everything right. And you can't micromanage every trade and every person. But we all know sitting here, we could list off a thousand risks, even just 50 risks. On every project we have right now, that if those risks eventually could cost us a lot of money. Easily. AI is incredibly good at managing and monitoring full time, telling for hours a day. So there's two things we're building over the next six to 12 months. One is that rather than having to build the perfect template every time, what if AI is reviewing the template? So when you subcontract, you've never worked with before. AI reviews that template and tells you where the opportunities for improvement are and reviews it against your risk register. Like your schedule of risks that you've identified and you know a risk on a project. The things that are keeping you up at night. You now know that every template is been reviewed on that. But then you can now monitor the project's life. And so then you can see them and be like, "Well, we're really focused on concrete risk at the moment and concrete cracking, concrete counts." Or whatever it is. AI can monitor every single project, every second of the day to give those insights. And so that's where I think we've done and the industry is doing a good job. But I think we're going to go leaps and bounds over the next six to 12 months because we're able to use this technology because we've now got people and multiple people doing this process life. Again, I think that's the AI is another example of how the technology is letting us do things before that were really hard or slashing possible. Like, you know, I think we're really bad, generally, construction professionals at trawling through thousands and thousands of documents. We slightly contradictory information. Yeah. And things just say different things in different reports and all that sort of stuff and actually pulling that order to go, "Well, what are we actually trying to do here?" Like, you know, which it's, in a lot of cases, a construction project. You're only as good as the one thing you don't get right. You can do everything right, but if you do one thing wrong, that commit disaster. Things that you can actually responsible for on a specification that's just been recycled from another project. And you don't even realize you're liable for things that aren't relevant. We had a project that we had like, it was telling us to use three different pipes between specification drawings and a client spec, like a, in client spec. It was telling us to do three different things. And like, you know, it's really easy just to go through and see the first one and go, "Oh, that's the one we're using." But actually, that's where we get excited. It is like AI is going to be help us. We try and do it now manually, but AI, and we're now doing it with AI, but only you're better, is to be able to pull that apart. Actually, it says three different things here. You've got to work that out. Like, that's just one example of like picking up these gaps in gray areas where we do, we may have these quality areas, or, "Oh, there was a note on the drawing that no one really understood." Like, you know, I think AI is going to be pretty good at looking for those things and going, "How have you dressed this?" Steve, what's your sort of silver lining? - A silver lining? - Yeah, or like an example of where you've seen progress. I think our boosting is sharing. It's as simple as it sounds. I think for every and a day, you know, going back over the last 10 or 15 years of form work, just sharing the gaps have been great for us in the last nine months, 10 months. And I think the fact that a lot of our key form and group, project manager group, you know, a lot of these guys have 30, 20 years experience in the industry, actually starting to use their phones to share what they're, uh, throughout the process, which the way we use that internally is, we've got about 50 or 60 people with PCF email addresses that can actually see that internal sort of screw up. And then actually look at it during Smokow. Bit of a lesson learned. But as you go, the simplest of share I've set down that you screw up or a hobbit, you shouldn't have done that way or, you know, - Be proud of your errors. - Yeah, they're being proud of the errors, but actually helping the next guy. And I think that's helping improve globally. Because the old way would be, hey, do you hear Johnny screw this up? And they might tell one person, but we're now telling 50, those 50 then tell the other 400. - Yeah. - So I think that's been a really big thing for us and something that's. - Right, right. -. the sort of thing that culture, where people feel comfortable to share, there is a mistake. It's not a small. That's not an easy task. That's a big task. - Yeah, so I think that's been incredible. And I think it'll become more and more and more incredible as we grow with our sort of core form and group, project manager group over time. Yeah, I think for us, that's probably great. I think AI, I don't want to dive into it. I'm not as techy as, oh my, Quini over here. But. - That's actually a tech company. - You're just kidding. - You know, he's like, he's so much to be expected. - Yes. - But like, even we've just created our own GPT, where we can throw all the drawing specs into, we've created our own template that actually spits out a spec summary on all the specs and drawings. So we can actually help build a better ITP. I hope as you can do that for me in the future. So I heard that. - But. - It's on the road, yeah. - It's on the road. It's on the road, man. - Just got pushed on. - But like, even a formwork and using a bit of AI to actually make sure that each individual job is catered for in the right way. - Imagine how much better the whole industry will be when that's available to every trade partner, where that's not this big barrier, where they can actually go, "Oh yeah, yeah, I know what I need to do. I'm going to press this button." And it's going to do this work that before might have just been unthinkable in your workforce. - No one has time for it. - No one has time and you might, depending on the size and scale of your trade business, you might just not have the people who even remotely want to or capable of doing that kind of work, whereas if that can be done by AI and automation and it's easy, laddy's going to be unbelievable. And this is the bit that gets, I think the tech stuff is so powerful in their quality space because there's this big barrier of work volume and really, in a lot of ways, administrative work that has to be done that's a real barrier. So yeah, I think for me, the thing that I've seen over the last little bit that I get really excited about, we've been into the lessons learned, sharing and we use Viva as you guys, as Josh, to share our lessons. And that's been so powerful that we build training programs off them and check lists and update our ITPs and stuff like that. But the big thing that I've probably the most excited about in the last sort of couple of months is a story Josh shared with me the other day, which is we've been doing a real focus on trade partners and how many active users they have and how many, how much work they've gone. And Josh did a presentation to all of our PCs, the system PM, I think it was about 200 people. You got into an auditorium. Thank you people, Matt. Yeah. So, into explain how we're changing our QA system. And one of the stories he told was about Wilson's plumbing and basically how we'd put a bit of work in some about, hey, we're noticing you don't have that many users. You should have more than that. Like this should be core business. And within a space of what, probably, three weeks, they've gone from maybe one or two users. One to 12. One to 12. So now they've gone from well and the volume of what they're actually checking and the quality of what they're checking is like light is different. And we've done that in two weeks. And that's two weeks of the director of the business going, yeah, get what you mean. And that's a good point. And then now it's done. And like we actually gave them a job the other day that we weren't going to give them on the back of that story because they were blind, but on another contractor and I was like, okay, well, guess we'll go with them, you know, blah blah blah blah blah. And Josh's story alone of like, I actually, well, why would we not choose the company that's got the better QA? Like, why would we choose like, why would I choose one that I know I'm all, I've got all this risk on because they don't believe in QA the way I need them to believe in QA. So like that's a story where I go, that's where we can move the needle. And if we can get our trade partners, you know, like Steve and others to actually go, I really believe in this and I can make a difference. I think our industry can be unrecognizable in five years if we got that happening through the whole trade base that they are actually believing in. And so that's to me, is the real bright spot to me. I think we're on the verge of like this big, big uplift in our quality. Great. All right. Well, probation passed. Yeah, it's not an official probation meeting, Josh. But capital conversation number two in the box. Thank you guys for making the time on the long Easter weekend. Just before a long Easter week. It's not the Greek Easter so yeah, don't do it again. That's right. I don't think it's the real one for you. So no, we thank you. Thanks for everyone for making the time. It was great. It's good chat. Thank you. Cheers.

Podcast Summary

Key Points:

  1. The discussion centers on the evolution of quality (QA) in construction from a burdensome, paperwork-driven task to a strategic opportunity for reducing waste and improving profitability.
  2. Participants share personal journeys into quality, highlighting a common industry stigma where QA was often delegated to junior staff and seen as a low-value administrative duty.
  3. A major insight is the significant financial cost of poor quality, with estimates of waste ranging from 10% to 21% of project costs, primarily from rework and labor inefficiencies.
  4. The shift to leadership roles or subcontracting perspectives revealed that proactive quality management is crucial for margin improvement, supply chain accountability, and overall project success.
  5. Technology and cultural change are identified as key to transforming quality from a reactive, tick-box exercise into an integrated, value-adding process across the entire construction supply chain.

Summary:

This conversation explores the changing perception and critical importance of quality assurance in the construction industry. Participants, including a quality manager, a software founder, and a subcontractor MD, reflect on their careers, noting that quality was historically viewed as a graduate's administrative burden with little strategic value. However, experiences in leadership and on the subcontractor side revealed the substantial financial impact of poor quality, with waste from rework and errors estimated at 10-21% of project costs—often exceeding typical profit margins.

The discussion identifies a cultural problem where quality is reactive and disconnected from value. The solution lies in shifting this mindset, leveraging technology for better data integration, and fostering accountability throughout the supply chain. The consensus is that treating quality as a core, proactive process—rather than a paperwork exercise—is essential for reducing waste, improving profitability, and delivering better-built projects.

FAQs

Studies indicate waste ranges from 8% to 21% of project costs, primarily due to rework and inefficiencies that are often hard to measure.

Initially, they saw quality as a paperwork burden or a graduate-level task, often treated as a checkbox exercise rather than a value-adding process.

Realizing the significant financial impact of waste—such as rework costing millions—highlighted the opportunity to improve margins by addressing quality systematically.

Subcontractors often bear the direct risk and cost of rework; engaging them in quality processes early helps identify and fix issues, reducing waste across the supply chain.

Technology, like QA platforms, helps standardize processes, provide real-time data, and foster industry-wide cultural change toward proactive quality management.

By making quality accountability a condition for work, integrating subcontractors into quality workflows, and demonstrating how it reduces their own waste and costs.

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