Procurement David Swinburne – Head of Procurement.

ProcurementDavid Swinburne – Head of Procurement

AGENDA

Introduction

Supplier Engagement

David Swinburne

John Green

Performance Feedback John Green

Validation Process John Green

Labour Supply Strategy Simon Carr

Link Up EngageJohn GreenAnnette Gevaert - Achilles

IntroductionDavid Swinburne – Head of Procurement

Supplier EngagementJohn Green – Supply Chain Assurance Manager

Supplier Engagement

Identification of Key Suppliers

High Spend Analysis Category of spend Prioritisation

Supplier Engagement

Update on Zero Harm and improved efficiency targets

Report on supplier performance/KPIs etc

Report on how things are working from supplier's perspective

Review of improvement initiatives and measurement of results (safety, efficiency and Sustainability)

Any concerns or blockages encountered on both sides

Supplier Engagement

RELATIONSHIP MANAGER

To co-ordinate and arrange the specific 1 to 1 meetings To liaise with SHEQ Representative To Manage any “Strategic Agreements” Not to get involved in “day to day” site issues To manage interaction with suppliers to maximise value Measuring and valuing relationship To provide a close, more collaborative relationship Realise new value, reduce risk and identify innovation To provide a 2-way mutually beneficial relationship To consider how any competitive advantage can be realised

from working collaboratively with our strategic suppliers To work with strategic suppliers to identify and realise Cost

Savings

Supplier Engagement

RELATIONSHIP CHAMPION

Appointed by Relationship Manager Does not have to be a “Procurement” person To communicate with supplier at one to one meetings BBRail Business specific topics to be identified by SCAM to

ensure that a consistent message is given. May get involved with site specific issues Performance statistics to be provided by SCAM BBRail SHEQ representative may be present at 1-1 meetings Business units can add business specific issues Generally will be appointed from “lead” business unit (by

spend) Record meeting minutes.

Supplier Engagement

SHEQ REPRESENTATIVE

To establish a close working relationship with the supplier

To keep the supplier informed on any key BB Rail SHE initiatives that may have a potential to impact upon their business (Zero Harm/ Sustainability/Fatal Risk Working Group outputs etc)

To review the monthly sub contractor SHE performance reports and provide feedback to the sub contractor

To act as a contact point for any ‘overall’ SHE issues that the relevant subcontractor may wish to raise, ensuring that the issues are adequately addressed

Supplier Engagement

Performance Reporting

Performance Reporting

What are Balfour Beatty Rail are doing?

Currently Birse Rail undertake performance reports each period.

This process is being rolled out to the whole of the Balfour Beatty Rail OpCo

Process provides information regarding:

- Assurance- Programme- Quality & Competence- Commercial

Performance Reporting

Performance Ratings

75% - 100% Acceptable

50% - 74.99% Caution

0% - 49.99%

Unacceptable

Performance Reporting

Current Process:

The current process is only one way It is a snap shot in time May be distorted by individual’s bad experience

The Future:

Looking to develop a 360 process Meeting with NWR to understand their “PRISM” process BBRail are moving to ORACLE – what are the options? Supplier help!

Validation Process

Validation Process

What are Balfour Beatty Rail doing?

Single database

Collate all the various Balfour Beatty Rail Business’s information

Update supplier information- Company Details- Contact Details- Services Offered- Geographical areas covered.

Revalidate every 2 years

Possible Validation Process

SUPPLIER

SUB-CONTRACTOR

SUPPLY ONLY

NON SAFETY CRITICAL

SAFETY CRITICAL

NON SAFETY CRITICAL

SAFETY CRITICAL

OVERALL VALUE OF CONTRACTS WITH BB

RAIL <£100K

OVERALL VALUE OF CONTRACTS WITH BB

RAIL >£100K

LINK UP ACCREDITATION

REQUIRED

LINK UP ACCREDITATION

REQUIRED

LINK UP ACCREDITATION

REQUIRED

BASIC REGISTER

OHLE WORK, SIGNALLING, P-WAY,

RRV SUPPLY, SAFETY CRITICAL LABOUR

SUPPLY

OHLE WORK, SIGNALLING, P-WAY,

RRV SUPPLY, SAFETY CRITICAL LABOUR

SUPPLY

Small & Above SMEValue of contracts > £2m

Micro SMEValue of contracts < £2m

REGISTER PLUS

REGISTER PLUS

Balfour Beatty Rail Category Councilfor Onsite Temporary LabourSimon Carr – Subcontract Manager

Agenda

Introduction

Introduction to the Category Council for Rail ‘Blue Collar’ Labour

Introduction to the 6 Stage gate Sourcing Process

Data & Market Analysis

Determine Business Requirements for all areas of the Rail Business

Develop Blue Collar Labour Strategy for Rail UK

Cross Business Functional Representative

Provide Functional Category knowledge

Knowledge of current processes, practices and systems

Supplier relationships and supply market knowledge

Introduction to the Category Councilfor Rail ‘Blue Collar’ Labour

Introduction to the Category Councilfor Rail ‘Blue Collar’ Labour (cont…)

Access to spend/business requirements/other sources

Represent Business Function to ensure alignment

Introduction to the 6 Stage Gate Sourcing Process

Spend analysis / validation

Supplier data analysis

Sourcing Work Plan

Develop strategies & tactics

Supply Market Analysis

Sourcing Strategy and approach

4 Review Gate 4 –COMMITMENT

Negotiation

Develop transition plan

Supplier Short List Generation

Pre-qualification / RFI

RFQ

Category Baseline

Finalise engagement / disengagement

3 Review Gate 3 –TACTICS

2 Review Gate 2 –STRATEGY

1Review Gate 1 –REQUIREMENTS & BASELINE

5 Review Gate 5 –IMPLEMENTATION

Review Gate 6 –REVIEW

Demand analysis

Confirm to-be process

Confirm key principles

Draft specification / SLA

Review analysis

Assess options and select

Data & Market Analysis

Determine business

requirements

Develop category strategy

Supplier Selection & Negotiation

Implementation

1 2 3 4 5 Supplier & Contract

management

6Data & Market

Analysis

Determine business

requirements

Develop category strategy

Supplier Selection & Negotiation

Implementation

1 2 3 4 5 Supplier & Contract

management

6

Supplier relationship management

Manage contract obligations

Demand management

6Contract award

Develop category governance RACI

Develop category compliance framework

Confirm benefits

Design new processes & systems

Assess people impact

MI reporting

Introduction to the 6 Stage Gate Sourcing Process

1

4 Review Gate 4 –COMMITMENT

3 Review Gate 3 –TACTICS

2 Review Gate 2 –STRATEGY

1 Review Gate 1 –REQUIREMENTS & BASELINE

5 Review Gate 5 –IMPLEMENTATION

Data & Market Analysis

Determine business

requirements

Develop category strategy

Supplier Selection & Negotiation

Implementation

1 2 3 4 5 Supplier & Contract

management

6Data & Market

Analysis

Determine business

requirements

Develop category strategy

Supplier Selection & Negotiation

Implementation

1 2 3 4 5 Supplier & Contract

management

6

6

Review Gate 1 - Requirements / Baseline

Scope agreed (category, geography, OpCo)

Determine detailed baseline (volumes, unit prices/spend, etc) against which benefits will be assessed

Agree specification, service, process and system requirements

Review Gate 3 - Tactics

Agree short list and/or supplier selection Finalise negotiations approach and

tactics Agree required degrees of freedom (e.g.

specs adjustment …) Confirm opportunity

Review Gate 2 - Strategy

Validate assessed opportunity Approve category sourcing strategy

(e.g. make or buy, tactical/strategic, sourcing levers, etc)

Approve sourcing option and plan (eg. approach to market,

Review Gate 4 - Commitment

Formalise negotiation results and any outstanding issues

Present team recommendations and projected benefits

Confirm supplier and move to contract award

Agree resource requirements for implementation phase

Review Gate 6 - Review

Review of implementation and any issues

Supplier performance review (cost and service)

Benefits confirmation & budgetary impact

Governance and compliance review

Review Gate 5 - Implementation

Agree new processes & systems Agree transition plan, timing and

implementation resources Approve ongoing category governance

arrangements and compliance framework

Agree budget / forecast changes

Introduction to the 6 Stage Gate Sourcing Process

Data & Market Analysis

Determine business

requirements

Develop category strategy

Supplier Selection & Negotiation

Implementation

1 2 3 4 5 Supplier & Contract

management

6

KEY OUTPUTS

Spend analysis / validation

Supplier analysis

PQQ

RFI and results

RFQ and results

Evaluation criteria

Suppliers debrief

Key communications

Contract and narrative (risks & issues, concessions)

SLAs / KPIs

Implementation plan

Key internal & external communications

SLA & reporting

Post implementation review & lessons learned

Benefits mgt process

Governance process

Supplier mgt process

Compliance mgt process

Transactional processes/ systems documented

RACI

Mobilisation

Team & key stakeholders

Category objectives

Scope

Key success factors

Risks

Data & Market Analysis – Spend for 2011

Total Spend for Blue Collar Labour across the Group was £125 million.

Total Spend for Blue Collar Labour across the Rail Business was £29 million

A Total of 29 Labour Suppliers used across the Rail Business

Out of the 29 Labour Suppliers, the Rail Business spent £21.5 million with 10 of those Labour Suppliers.

Data & Market Analysis – Spend for 2012

The recorded spend from Mid September 2012 was £19.8 million

UK Projects Spend - £8.7 million

Birse Rail Spend - £2.2 million

Track Partnership & Mainline Renewals - £8.9 million

Data & Market Analysis – Spend for 2012

Total of 31 Labour Suppliers used across the Rail Business

Out of the 31 Labour Suppliers, the Rail Business spent £15.4 million with 10 of those Labour Suppliers.

Determine business requirements for allareas of the Rail Business

Current/Future requirements for on-site labour across the BB Group.

Supply Chain Selection & Engagement

Labour Types to include/exclude

Labour skills matrix

Determine business requirements for allareas of the Rail Business

What type of Group agreement do we put in place?

Benefits & Savings

Risks to this Project?

How do we communicate this to all Operating Companies across the BB Rail?

Time Scales

Development of a Blue Collar Labour Strategyfor Rail UK

Stage Gate 1 - Data & Market Analysis

Stage Gate 2 - Determine Business Requirements

‘Without identifying the above we will be unable to develop an effective strategy for the Rail Business’

What is Link-Up?

Link-up is the UK rail industry supplier qualification scheme, providing a single common registration, qualification and audit process for suppliers that is shared by the UK rail industry.

The Link-up scheme has three clear objectives: - To provide a single shared qualification process for the rail

community - To reduce duplication, administrative effort and to be

recognised as efficient and cost-effective - To offer a fair, open and transparent process and supports

compliance with EC Procurement Legislation.

How can Link-Up help?

The benefits for a buyer using the Link-Up process include:

- Reduction of duplication- Provides a single shared qualification scheme- Search Facility to source suppliers by category and / or

location- Transparent process supporting EU Procurement Rules- Can be used as part of business Assurance Processes &

Procurement Processes- Provision of up to date information for suppliers including

Audit information Company Information Insurances

What is Link-Up?

In 1997 Achilles were requested to manage Link-Up by Railtrack

Link-Up (formerly Proof) was launched in 2000

The level of industry change meant that necessary technical input from them into Link-Up and Proof was low priority

This led to Version 1 (V1) falling behind both Network rail and industry needs and proof not moving forward as originally intended

Network Rail and Achilles jointly developed Link-Up Version 2 (V2) to deliver an industry solution and this was launched in 2007

Further changes in the Rail Industry & the recognition that V2 was not user friendly or was reflecting current issues has resulted in the need for Link-Up Engage

Link Up “Engage”Annette Gevaert – Director Rail & TransportAchilles Information Ltd

services for professional procurementbe better informed, make better decisionsservices for professional procurementbe better informed, make better decisions

Link-up Engage – a new version is on its way

October 9th 2012

Link-up today

An active community uses Link-up extensively

113 Buying Organisations

3,500 Suppliers

6,000 Portal Users

11,000 Monthly Searches

36

“Link-up has provided us a valuable tool to manage risk, reputation and as a supplier, supported us with our business development requirements. Since our takeover in December 2011, the company has performed exceptionally well which has led us to winning even more business thanks to Link-up.”

Rob Illsley, Sales & Commercial Manager, Alan Dick Communications

“Link-up has provided us a valuable tool to manage risk, reputation and as a supplier, supported us with our business development requirements. Since our takeover in December 2011, the company has performed exceptionally well which has led us to winning even more business thanks to Link-up.”

Rob Illsley, Sales & Commercial Manager, Alan Dick Communications

Link-up Engage at a glance

The new version of Link-up will deliver great benefits to suppliers... Shortened & streamlined questionnaire Revised product coding structure Modern look and feel and intuitive navigation Easy questionnaire updates Price reduction for 75% of suppliers Introduction of a small supplier tier Global, cross-scheme platform – shared common data

And to buyers...

Flexible supplier search suite Additional questions – survey tool to identify the right supplier Reports from other audit programmes

Furthermore... The revision of the Link-up audit programme is well under way A Sustainability module is soon to be introduced

37

Q3

Jul Aug Sep

Q4

Oct Nov Dec

Q1’13

Jan Feb MarJun

Q2 Q2 ‘13

Apr May

Link-up EngageCommunication Plan

38

2012/2013

Buyer

SuppliersSupplier Training

Transition e-shots

Transition e-shots

Letter from SG Chair to all members

Organisation specific communications: intranet, internal newsletters, meetings etc.

Buyer Training

Generic Communications

Link-up Newsletters to all Scheme membersMedia coverage: magazine articles, advertorials, press releases, interviews etc.

Conferences and exhibitions: Infrarail, Railtex, CECA/RIA/RICA/Rail Alliance Forums

Supplier engagement

Scope agreed

Refinements / Specifications

Scheme configuration

Developments and testing

UAT, Data migration Supplier

LaunchLink-up Engage

PlatformBuyer

Launch

BuyerBuyerSupplierSupplier

Overview of the new Pricing Model

£365

£565

£1,050

£1,700

Small Supplier(max 2 PCs)

Standard Supplier(3 – 39 PCs)

Large Supplier(40 – 749 PCs)

Super Large Supplier(750+ PCs)

StandardRegistration Patron

Basic buyer

Premium package

Super Buyer

+ £485

+ £485

Notice

+ £425

+ £425

+ £425

• Supplier questionnaire

• Company Profile (logo, marketing statement etc. – replaces MARKiT)

• Supplier search via product or company name

• Company Profile• Basic Q data• Contact persons• No audit reports

As before:• OJEU notifications

service

+ £425

• Full search suite• Full Q information• Full Audit Reports• Account Mgmt• Option for Steering

Group membership• Alerts (Supplier

tracking)

• Additional Questions

+ £1,500

£7,450(Buyer with super large

supplier record)

£25,000 (TfL)

and £50,000 (NR/NRIP)

Very large Organisations:NR, NR IP, TfL

• Functionality same as Basic Buyer plus Premium package

£6,800(Buyer only)

£6,800 minus

supplier fee (Buyer with Small, Standard or

Large supplier record)

39

Thank you

40www.achilles.com

Annette [email protected]

Director Rail and TransportAchilles Information Limited

Achilles.com/LinkedIn Twitter.com/Achillesltd Achilles.com/Facebook