Construction Futures Wales - Supply chain development workshop

1. Rob Beattie, Enterprise Consulting Ltd
Supply Chain Development

2. Todays AGENDA
HOUSE KEEPING
1. Construction Future Wales
2. Why Supply Chain Development Matters
3. United Living Building & Developing Supply Chains
4. What Drives The Public Sector
5. Good Basics for SME’s
6. Can CFW Assist You

3. Why Bother?
➢ Programme jointly funded by Welsh Government and
CITB in Wales
➢ Targeting Welsh Construction related SME’s that want to
grow and prosper
➢ Running until end of March 2019
The Programme

4. ➢CFW is here to provide companies with the opportunity
to learn about improved business practices that may
assist them to increase turnover and competitive
advantage
➢CFW aims to help
- reduce costs, defects and environmental impact
- improve supplier relations and safety
- enhance collaborative working and
- improve customer satisfaction
AimPurpose

5. ➢Seminars and Events
➢Supply Chain Sourcing (MTB)
➢Supply Chain Networks
➢1 to 1 Individual Support
➢Training/Management Development
How?Our Activities

6. Seminars & Events
Providing networking opportunities at events
intended to give a fresh insight and offer practical
solutions on up to date issues that include…..
• BIM and its impact on SME’s
• NEC contracts and their impact SME’s
• Procurement Advice and Guidance
• Quality Standards and Continuous
Improvement
• Understanding Costs & Tendering Support
• Digital Construction
• Succession Planning

7. The Construction Futures Wales
team has a track record working
with Welsh SME’s who have grown
through introductions to 1st tier
contactors across Wales
Sourcing

8. Supply Chain Networks
➢ CFW Networks provide support at each key stage of a project
working with clients and their supply chain partners to
provide:
➢ Collaborative approaches for performance improvement
➢ Cascading of new working practices and procedures
throughout the complete Supply Chain.
➢North Wales Local Authorities
➢£370m funding for schools and other projects

9. To share improved business practices that can
increase turnover, profit and provide a
competitive advantage when tendering for
future work……
1 to 1 Support

10. Management Development & Training to gain
a Postgraduate Certificate (PgC) or Diploma
(PgD) in Business Management, focused
around construction business management,
with workstreams that you can deliver and
improve your business all delivered by Cardiff
Metropolitan UNI in Cardiff and North Wales
Training

11. Shared Understanding
Construct Futures Wales provides support specifically designed to
meet your company’s individual needs.
Starting point establishing a shared understand of your business
taken from 5 unique perspectives:
• Strategy
• Process
• Customers
• Learning & Growth
• Financial Management
Do you know how you compare with your peers across the UK?
0
2
4
6
8
10
Strategy
Perspective
Financial
Perspective
Customer
Perspective
Process
Perspective
Learning and
Growth
Business Excellence
Score
Acme Builders

12. Why Supply Chain
Development Matters

13. ➢ Today is not about
➢Tendering
➢Winning Work
➢How you run service delivery
➢ What it is about, is a discussion about why supply chains are
important, and what best practice looks like when selecting a
supply chain partner
Scope

14. ➢ I assume the key driver is to secure work with
➢ Public Bodies
➢ Large Tier One Contractors
➢ Maybe find partners to collaborate with
➢Tactical - Win Work
➢Strategic - Who can I develop by business with
Why Are You Here

15. ➢ Regulatory Framework
➢International Law
➢National Law
➢Series regulations & guidelines
➢Local planners, building control, HSE etc
➢ A framework of checks and balances with increasing levels of
scrutiny and accountability
Business Environment

16. Every Day Buying Decisions
➢ This ‘Business Environment’ drives law, regulation and guidelines
in simple and more complex purchasing decisions we all make
every day
➢ Food – Food Standards Agency (FSA)
➢ Travel – Association of British Travel Agents (ABTA)
➢ Housing - National House Building Council Guarantee (NHBC)
➢ How do we have confidence in the framework around what we
purchase

17. At The Outset
International, National, Law, Regulation & Guidelines
North Wales Authorities
£370 million to be invested in built schools

18. Next Steps
International, National, Law, Regulation & Guidelines
North Wales Authorities
£370 million to be invested in built schools
Tier 1 Contractors Advisors

19. Why Supply Chains Matter Locally
➢ In North Wales Authorities desired and contracted on the
development of local suppliers to comply with community benefit
obligations
➢ Tier one contractors had existing supply chain partners, but to
differing degrees sought out local SME’s that kept the Welsh £ in
Wales, retaining and growing employment locally with money
spend in local communities
➢ The North Wales Framework achieved a near 80% spend down to
Welsh based organisations

20. Why Supply Chains Matter Locally
➢ However what the Authorities, Tier One Contractors and other
supply chains want to avoid
➢ Being associated with activities that disrupt local communities
with late badly delivered projects
➢ Having incidents that become reportable to regulators such as
the HSE or become viral on social media or 24 hr news
networks

21. ➢ Social responsibility is growing significantly, with injustices easily
spread on modern social networks and 24hr a day new networks
➢ We now have 1 million Church of England church goers being
briefed on what to look out for in respect to ‘modern slavery’ at
hand car washes, and what social media apps to report observed
behaviour
Churches in England

22. Carillion
➢ What checks do you do?
➢ The collapse – “Profit vs Cash”
➢ “Carillion was also holding up to £800m in retention payments
before it went under” (Building Engineering Services Association
and the Electrical Contractors’ Association)
➢ trade creditors are owed more than £100m, but said under
insolvency law only £600,000 would be set aside.
➢ “One of the things Carillion was doing…..it was signing the
contracts, getting a nice slug of money and then delaying its
payments to subcontractors which allowed it to get the profits
from holding that money” (BBC Commentary)

23. ➢ Five reports have been published at the start of the fact-finding stage of the public inquiry into the
Grenfell Tower fire - Dr Barbara Lane, Chartered Fire Engineer Commenting on Fire protection
measures;
– Cladding on Grenfell Tower did not comply with recommended fire performance criteria.
– Multiple fires were allowed to spread because of combustible materials by the windows and
within the cladding system.
– Flat entrance doors were non-compliant with fire test evidence and doors going to the stairs
"do not appear to have been upgraded since installation in 1972“.
– The ventilation system - which was meant to prevent smoke from entering the stairwell - did
not appear to work as intended.
– Issues with fire lifts meant they could not be used to transport equipment or residents up and
down the building.
– The fire service had to pump its own water into Grenfell Tower - the building's "dry fire main"
system was "non-compliant" with guidance at the time of construction and is "non-compliant
with current standards".
Grenfell

24. United Living
Building & Developing
Supply Chains

25. What Drives
The Public Sector

26. Chartered Institute of Procurement & Supply (CIPS)
➢CIPS is a member and subscription funded organisation
➢Their advice applies equally to both public and private
sector organisation
➢Public bodies will procure products and services that align
to CIPS best practice guidelines and pass many of the
obligation down to main contractors within legal contracts

27. Chartered Institute of Procurement & Supply (CIPS)
➢CIPS advocates that businesses ensure that all purchasing
activities are;
➢Legal
➢Accountable and auditable
➢Environmentally, ethically and socially responsible
➢Economically effective
➢Open to commercial, market and product innovation
➢Manage and pass risks to appropriate partners
➢Be open to continuous improvement and development

28. Legality
➢Purchasing activity will fully respect and comply
with
➢All applicable UK laws and regulations
➢All applicable EU laws, directives and
regulations
➢All laws on taxation, environmental
regulations, employment, H&S and corruption

29. Accountability and Auditability
➢ The business will maintain systems for all purchasing transactions as
appropriate to show;
➢ The purpose for project activity
➢ Appropriate business case and project approvals
➢ The option available to deliver the project
➢ Tender and evaluation
➢ The project meets the specification contracted
➢ Ways of taking action to remedy defects and non-compliance
➢ An authorised and agreed route by which payment is made

30. Economic effectiveness
➢ Subject to legal, ethical and other restraints outlined above;
➢ The desired outcome is the best value gained at lowest total cost.
➢ Total cost will take account of full anticipated life-cycle costs such as
maintenance, servicing and disposal costs
➢ Value should be assigned to factors such as sustainability,
environmental and social benefits (community value)
➢ In addition to the total cost of acquisition or ownership, it is policy to
reduce where possible the administrative cost of acquiring and
owning goods and services

31. Exploitation of developments
➢Those responsible for purchasing will take care not to
reduce or eliminate competitive development within
the supply base, ensuring that the supply chain does
not lose the ability to adapt to new or emerging
technologies and processes.
➢Always be open to supplier innovation in delivering
process and outcome

32. Risk Management
➢ For any significant expenditure, long term commitment, or
identifiable pinch-point (where a small problem results in a big
problem for the organization) formal risk assessments WILL be
made addressing;
➢ Supply risk - performance of a supplier
➢ Demand risks - are there enough suppliers to create competition
➢ Process risks - you place tenders for work not required
➢ Control risks - risks arising from deficiencies
➢ Environmental risks - the impact of unpredictable hazards
➢ Social risks - risks arising from issues related to CSR such as
Human Rights etc.

33. Code of Ethics
➢ Persons involved in any aspect of purchasing on behalf of the business
shall never use their authority for personal gain and seek to uphold the
standing of the business by;
➢ Maintaining and unimpeachable standard of integrity in all their
business relationships both inside and outside the organization.
➢ Fostering the highest possible standards of professional competence
amongst those for whom they are responsible.
➢ Optimising the use of resources for which they are responsible to
provide the maximum benefit to the employer.

34. The Purchasing and Supply Management Model
➢ All procedures used should comply with the model as far as possible, and
any deviation should be checked against the model to ensure that no
excessive risks are being incurred by adopting a simpler or less rigorous
procedure. The model divides into 4 sections;
➢ Sourcing analysis
➢ Requisition/ demand management
➢ Pre-contract activities
➢ Post-contract activities
➢ Just focus on Sourcing analysis & Demand management today

35. Sourcing Analysis
➢ Sourcing analysis is a continuous process – it draws on past data, wider
market intelligence & forward/ forecasting plans, It attempts to predict
the future requirements of the business.
➢ The priority goals and outcomes of the organisation and the funding
capacities available to achieve those outcomes
➢ Political & Risk Analysis
➢ Should systematically review categories such as
➢ Political instability in supplier countries, transport disruptions,
regulatory impacts, financial stability of suppliers etc.

36. Sourcing Analysis (iii)
➢ Supply base analysis (Capacity)
➢ Evaluate the ease or tightness of supplier markets
➢ Examine historic and current performance of suppliers
➢ Its important that the analysis is looked at with fresh eyes at regular
intervals – “do not assume that the future will look like the past”
➢ Options/decisions
➢ From the above analyses purchasers should be able to determine
appropriate sourcing strategies for different suppliers, make
recommendations around make or buy, insourcing/ outsourcing etc.

37. Framework of Policies
➢ Quality Management
➢ Staff Handbook
➢ Health & Safety inc. PPE
➢ Environment & Waste Management
➢ Equality & Diversity
➢ Modern Slavery
➢ Bribery and Corruption
➢ Ethics Statement
➢ Corporate Social Responsibility (People & Community Benefits
➢ Supplier Management
➢ Customer Service
➢ BIM………. Amongst others

38. Best Practice as a Supplier
➢ You will have industry accreditations e.g. NEICC, CORGI,
NFRC
➢ You will need: -
➢ Presence needing to be found, Website, Facebook, Achilles,
Construction Line etc.
➢ To promote and tell others what you do
➢ Referenceable with case studies with a focus on outputs and
added value, clearing outlining customer endorsements
➢ Finances for 3 years
➢ Insurances
➢ CSCS Cards (or equivalent)

39. confidence in YOUR supply chain
➢ Do you behave in a consistent manner with others with whom you
work, local partners
➢ Working for Public Sector and Tier 1
➢ As a minimum you’ll need presence and policies that align with and
meet their objectives and responsibility
➢ You need to evaluate the impact on your normal business activities
ad what major projects and stage payments and retensions mean to
cashflows
➢ When you meet a buyer you should have a presentation covering
the minimum standards they expect, and ideally more

40. What Can CFW Help With
➢ Meet the buyer
➢ Supply chain networks and 1 to 1 projects to
➢ Policy developments and accreditation and registration
➢ Delivering behind the policies (H&S, Environmental etc)
➢ Innovation/Digital developments
➢ Business Planning and capacity review to grow
➢ Succession Planning

41. Q&A Session