SUSTAINABLE SUPPLY CHAIN IMPERATIVES

PHASE: WORKSTREAMS

(WORKSTREAM 2: INTEGRATED SUPPLIER (SME) MANAGEMENT

1 OCTOBER 2015

Version History 3

Terms of Reference 4

Discussion Outline 6

Project Profile 6

Project Outputs 8

Workstream: Facilitation Process 9

Information Distribution and Archive 10

Appendix A: Q&A For SME Engagement 11

Notes, Goals and Action Items: 12

Collaboration Nation: Creating an environment for growth 14

Further Reading on SME Engagement from Fujitsu 15

About Rail Champions: 16

TABLE CONTENTS

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The VIP Roundtable steering group wishes to express its gratitude to Fujitsu who, through their generosity, have helped to make this event possible. Thank you!

Version History

This preliminary report has been specifically developed to provide a narrative to the RICS VIP Round Tables, where there is a need to explore hypothesis, identify action steps and share lessons learned. Good leadership requires the integrity, honesty, consistency and a willingness to stand up and be counted. The benefit from this approach is we all learn together, and develop stronger supply chain solutions by uncovering clients unmet needs.

Template Version: 01/06/2015

Version Implemented By Revision Date Approved By Approval Date Reason

1.0 Chris Williams-Lilley 06/06/2015 Chris Williams-Lilley 07/06/2015

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Terms of Reference

These Terms of Reference set out the basis of this joint development initiative that aims to promote current thinking on supply chain efficiency, and to share that knowledge and influence across a wider industry audience.

The future of procurement in the rail transportation infrastructure sector.

Transportation infrastructure covers rail, highways, aviation and ports. However the project leadership team have elected to restrict the focus to just rail for this next stage in order to establish a more focused outcome, rather than to attempt to become truly representative of the overall sector.

Supply chain imperatives:

• Creating an environment where the supply chain consistently delivers innovation.

• Identify and eradicate duplication and waste, in all its forms.

• Seek out collaboration and co-operation in the supply chain, harness it and build on it.

• Optimise the processes and develop the people.

• Track the benefits – uncover the hidden profits and ensure they are realised.

• Capture the knowledge and share it easily and quickly.

Leadership Team:

*Note: Point of contact.

Organisation Contacts

RICS Alan Muse (Director, RICS)

RICS *Robert Mallett (Editor, RICS)

RICS Matt McDermott (Sales and Marketing Director, RICS)

CH2M Hill Richard Graham (Director, Rail Networks)

Rail Champions Chris Williams-Lilley (Managing Director, Leadership Champions (UK) Ltd)

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VIP Panelists: Integrated Supplier (SME) Management Date/Time : 01 October 2015 / 13:30 - 17:00

Venue : Fujitsu, 22 Baker Street, London, W1U 3BW

Issues : SME Engagement, collaboration / culture, and commercial management.

Role Person

ChairStephen Blakey Commercial Projects Director Network Rail

Leadership Team Member (to monitor progress)

Chris Williams-Lilley Managing Director Rail Champions

Client RepresentativeGraham Sprague Lead Commercial Manager BCV, Commercial COO Transport for London

Tier 1 RepresentativePaul Paddick Head Of Supply Chain Carillion

SME RepresentativeAndrew Frank Managing Director Opentree

Subject Matter ExpertsRussell Goodenough Client Managing Director: Transport Sector Fujitsu

Stephen Pryke Course Director University College London

Scott Smith Chief Operations Officer CompeteFor

Observers Person

RICSDr. Robert Mallett Editor, RICS Journal

RICSMatt McDermott Sales and Marketing Director

RICSEd Tooth Marketing and Communications Specialist

MTR Corporation LtdOliver Bratton Operations Director, European Business

BridgelightJames McGilvray Co-Founder and Director

Discussion Outline

In advance of the Roundtable, participants should consider the following key issues relating to SME Engagement in the supply chain:

• What does this project wish supply chains to do?

• How will the final model work in practice?

• What will the benefits of adopting this model be?

• What is the correct way to achieve collaboration across supply chains?

• How do clients engage with the market to get the best value out of procurement / delivery?

Project Profile

The Challenge

The government’s Construction 2025 document published in 2013 sets out a clear vision for the future functioning of supply chains in that it seeks:

“An industry that has become dramatically more sustainable through its efficient approach to delivering low carbon assets more quickly and at a lower cost, underpinned by strong, integrated supply chains and productive long term relationships.”

This and subsequent roundtable discussions will begin the process of evaluating and considering the future nature of the supply chain process within the rail construction industry, in order eventually to meet the government’s stated objectives.

Project Hypothesis

Over the last year the project leadership team have established a working hypothesis based on a commonly perceived need for vertical dialogue and understanding across rail infrastructure supply chains, in order to arrive at the government’s calls for greater integration.

The project to date has demonstrated that there is value in sharing the outputs of this initiative across supply chain Tiers with the aim of reaching commonly agreed, integrated solutions to the existing barriers to greater collaboration.

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Our working hypothesis, which underpins each of the three work streams dealing with (i) BIM / engineering data management; (ii) Integrated supplier (SME) management; and (iii) Supply chain skills and training, is formed of the following core thematic areas that the panel member should take into careful consideration:

• the existing barriers to effective vertical supplier integration that this project is in the process of clearly identifying;

• the rail infrastructure industry is naturally fragmented but that better alignment could be secured through reaching a better understanding of enablers and measures (technology, policies, training) and by focusing on ways of removing such barriers;

• that policies and their measurement drive change and encourage best practice, but that change must be led by client standards and practice rather than by government;

• government’s role should be to create the appropriate environment that will facilitate understanding and dialogue vertically across the supply chain;

• that regular communication and measurement of a few key drivers for change would function more effectively than any attempt to address every issue;

• there should be a focus on evidence (for instance industry case studies) as a measure of effective change over a period of time;

• work streams are encouraged to ensure that they are aware of the work of existing third parties and published documents on which they can, in part, base their deliberations.

Project Objectives

This project has been established as an industry-level, politically independent initiative with the aim of promoting neutral knowledge that will act as an influencer for positive cultural change. Its work to date has purposely spanned a range of interests vertically across the rail infrastructure industry supply chain, from government (client) through to SME. Drawing from a broad and comprehensive range of expertise the project has, and will continue to pursue the following key objectives:

• identifying the relevant barriers and drivers from existing work streams (e.g. those of the Infrastructure Client Group) in order to identify, assess and ultimately address relevant gaps within existing activities;

• ensuring that the work streams are fully engaged with the project’s aims and managing their deliberations to ensure that focussed and realistic recommendations for the industry are arrived at;

• generating high quality, succinct published reports and virtual integrated supply chain models that can be adapted by each area of the supply chain;

• establishing channels of communication ( social media, trade and national press etc) in order to communicate the project outcomes and encourage / influence positive change across the industry;

• monitoring the progress and adaption of the recommendations through regular dialogue with the rail infrastructure supply chain industry;

• organising future discussion forums to assess progress to date and fine tune recommendations accordingly if required.

Project Outputs

Successful SME Engagement

SME’s typically access public sector markets via two routes – they either bid for and win small contracts and therefore act as a ‘specialist supplier’ or alternatively, they act as Tier 2 or Tier 3 sub-contractors to the main contractor. The type of work carried out by SMEs acting as the principal contractor could typically include the supply and delivery of M&E Services and other assets on a contract to refurbish a Station or Plant Room, or perhaps repair and maintenance works on an Multi Asset Framework Agreement.

Although small firms dominate the rail and wider construction industry in terms of both output and employment, this dominance is not usually reflected in the success rate of SMEs when tendering for public sector contracts. More than 50% of all those working in the construction industry are employed by firms employing fewer than 115 people and a third are employed by companies employing less than 13 people10.

Confusing procurement processes and unclear tender requirements do not always give the required reaction for SMEs trying to access the rail industry market. At the same time, the industry has broader issues that weaken SME activity. How can progressive clients engage with SME’s, cut red tape and access innovation from the lower tiers?

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Workstream: Facilitation Process

This facilitated session is a highly structured meeting in which the Chair (and facilitator) will guide participants though a series of predefined steps to arrive at the result that is created, understood and accepted by all participants.

Every work stream has a specific purpose or result to be achieved. For this particular session, the purpose may be to create a strategic plan for BIM implementation, to improve efficiency of a specific process, or to define a solution that meets a specific project requirement.

To create the result, participants are encouraged to share insight on knowledge on:

Situation Assessment: Where are we now? Visioning and goal setting: Where do we want to be? Strategy development: How do we get there? Action planning: How do we monitor progress?

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Information Distribution and Archive

All transcripts and documentation created during the pilot VIP Roundtable Debate will be archived in the RICS Knowledge Platform. Items may include, but not restricted to; terms of reference, industry reports and proposals, business case, charter, scope statement, schedule, project management documents, on-line surveys, status reports, checklists, and emails.

Archived items will be distributed to key stakeholders upon project close out. Note that this list may include individual without access to the project’s archive repository. In this case a SharePoint (or similar) will be utilised.

Item Distribution List Distribution Medium

Curabitur auctor TBC SharePoint

Curabitur auctor TBC SharePoint

Curabitur auctor TBC SharePoint

Curabitur auctor TBC SharePoint

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Appendix A: Q&A For SME Engagement

Starting Questions What is the current status of play?

How can the process be improved?

Q1. What do we mean be Integrated Supplier Management (or, for example, do we mean Supply Chain/SME Integration?) and what are the perceived benefits?

Q2. What do SMEs want and how do we know?

Q3. What are the blockers to Integrated Supplier Management / SME integration and what preliminary views are there as to addressing these?

Q4. Where are the best examples of Integrated Supplier Management / SME integration and what would we hope to see by way of demonstrable benefits (i.e. what does good look like?)?

Notes, Goals and Action Items:

Key bullet points:

Goals or supporting activities I am going to work on as a result of this Roundtable

Goals or action items: Results: Next action step:

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Key bullet points:

Goals or supporting activities I am going to work on as a result of this Roundtable

Goals or action items: Results: Next action step:

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Collaboration Nation: Creating an environment for growth

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Further Reading on SME Engagement from Fujitsu

Download: http://www.fujitsu.com/uk/Images/Collaboration-Nation-v08.pdf and http://www.fujitsu.com/uk/Images/Fujitsu-SME-Charter.pdf

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About Rail Champions:

Leadership Champions (UK) Limited (T/A Rail Champions) are a successful Management Consultancy that not only understands the nuts and bolts world of the rail and construction sector, but also understand the intricacies which can be the difference between success or failure. We take pride in our collaborative nature and ability to build, maintain and nurture long-term business relationships.

We focus on strategy. Customer profiling, value proposition design, business model evaluation, Collaborative Working (BS11000), sustainability (BS8903) and employee engagement.

We provide real business benefits. Project teams and organisations that use our services, are able to deliver value quicker, at a lower cost, and with higher levels of customer and employee satisfaction.

We are credible. Our people are all experienced business facilitators, and have held senior positions within major Civil constructors, global OEM's or client organisations.

We are easy to work with. We are passionate about cutting through complexity and creating a clear path to sustainable performance.

Our customers are not just clients to us, we walk shoulder-to-shoulder and 'together' build a culture of shared values and purpose. It takes hard work and an awful lot of commitment. A mindset that will make a good company great!

Find out more by visiting www.rail-champions.com or contact info@rail-champions.com

Options: Advisory Role, Consultative or Full Collaborative.

Chris Williams-Lilley Founder and Managing Director

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IMPORTANT NOTICE

The information in this close out report is strictly confidential and is intended to provide guidance on the VIP Round Table Debate. Guidance notes are very general, and subject to change without prior notice. For a more in-depth information, please contact the undersigned.

Chris Williams-Lilley

Rail Champions

Leadership Champions (UK) Limited 12a Main Street Ashby St Ledgers Rugby Warwickshire CV23 8UN

T. +44 (0) 1788 891 714 E. chris@rail-champions.com U. http://rail-champions.com

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