CASE STUDY / SKANSKA
CASE STUDY
the value of good procurement. The approach taken on this major road project was so successful it won multiple awards for both the leadership team and the supply base, and it is now the blueprint for how major projects are done.
YOU’RE ONLY AS GOOD AS YOUR SUPPLY CHAIN
Valuing collaboration from the start
Spencer, who is now procurement and supply chain director for Skanska’s highways business, says right from the start, the A14 project operated differently to those before it. Procurement and supply chain had a top-level role alongside the stakeholder director, finance, head of operational excellence, the integrated management office, health and safety, planning and more. “This was not your normal commercial set up, which in itself delivered benefits by empowering different organisations,” he says. “Having procurement and supply at a senior level enabled us to demonstrate value.” The tagline for the procurement and supply chain strategy was “You’re only as good as your supply chain.” Focused on this message it split its plan into four areas: best value, collaboration, sustainable development and motivating the supply chain to want to work on the project by giving them a voice. “None of our strategy was to deliver the lowest cost, it was to deliver the programme,” says Spencer. Among the packages delivered included £120m of earthworks, £20m of concrete, £10m of drainage, £75m spent on pavements and £30m on archaeology. A key member of Spencer’s team was supply chain collaboration lead Ben Cross. “The function he headed doesn’t normally exist on these projects but this is where a lot of the gold dust came from,” says Spencer. Cross, who is now head of strategic performance at L Lynch Plant Hire and Haulage, says a lot of the collaboration work the team did mitigated risk, waste and spend.
QUICK FACT: A SIGNIFICANT VALUE OF THE WORKS HAD BEHAVIOUR AS PART OF THE SUPPLIER SELECTION CRITERIA.
T HE UK’S A14 ROAD is a crucial transport link that connects major ports in East Anglia with the West Midlands and the north. It carries more than 85,000 vehicles a day, a quarter of which are HGV traffic. It used to be slow, congested and susceptible to accidents – thwarting economic growth and poorly impacting the environment as engines idled along its route. In 2015 a Highways England project began that pulled together some of the country’s biggest construction, design and engineering contractors to deliver a £1.5 billion upgrade to a 21-mile stretch of the highway. Skanska played a leading role in the Integrated Delivery Team (IDT) for Highways England, a joint venture that also included Costain, Atkins and Balfour Beatty. Andrew Spencer, was procurement and supply chain director on the delivery team that collaborated to deliver and coordinate the activities of 14,000 people throughout the supply chain, across this complex, five-year project. Part of the work he led was to choose contractors based on their ability to work together, testing their behaviour and following up with on-site visits as part of the tender process. Once the project was live, the team took an evidenced- based approach to managing the supply chain, which aided strong relationships and helped to demonstrate
Behaviour-based supplier selections
Spencer and Cross credit a large part of the collaborative success of the project to the manner of supplier selection, which had a significant behavioural rating. In some packages as much as 15-20% of the score was determined by behavioural alignment and collaboration. This was tested in workshops and then on-site visits were used to verify that what was written in tender documents matched the project’s requirements. They especially wanted to ascertain how strong potential providers were in the project’s top three areas of focus: safety, customer and delivery. Spencer: “More than half of the £700m of supply chain spend had a behavioural assessment weighting of more than 20% in a balanced scorecard. So a significant value of the works had a behaviour as part of the selection criteria.” →
After selecting suppliers based on their ability to collaborate, Britain’s biggest road project to date finished in May 2020 on-budget and eight months ahead of schedule.
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STATE OF FLUX
2021 GLOBAL SRM RESEARCH REPORT
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