CASE STUDY / SKANSKA
CASE STUDY
Cross also eschewed the traditional 180-degree approach to performance management to ensure it was carried out on a 360-degrees basis. “We had to know if we were doing things that were blocking the supply chain, so we often had a whole range of people – directors, operators, tier two and three supply chain providers – in a room reviewing performance based on facts.” The scores found that of those selected using behavioural procurement, just shy of 84% met expectations, around 9% better than those who were transactionally procured. Cross: “It shows that if you invest in your people, which includes your suppliers – if you create the right environment and remove the blockers to their success – they will deliver for you.” The detail behind the headline figures shows providers who had had some element of behavioural weighting to their tender performed better across the board. This included time, cost and quality, as well as collaboration, health and safety, operational efficiency and for environmental considerations. “The fact that it impacted on time, cost and quality is what everybody is always surprised about,” says Spencer. “Our data proved you can improve cost and commercial management through behaviourally procuring suppliers.” The close working that led to improved commercial management also averted risks and meant KPIs, budgets and deadlines were achieved. It set the right tone from the start and meant good ideas were not only discussed but could be immediately acted upon.
IT’S PROBABLY SEEN AS THE PROJECT IN THE UK CONSTRUCTION INDUSTRY THAT MOVED THE NEEDLE AND DEMONSTRATED THE ART OF THE POSSIBLE.
outperforming expectations, it had only happened later than was hoped because they hadn’t been given any notice.” “We had fact-based data we could use to manage our relationships,” adds Spencer. “That made it two-way, rather it simply being the client shouting the loudest.” To influence greater change, the team embedded a behavioural maturity framework across all aspects of the project. This Highways England model enables the testing of behaviours to assess their impact and make changes. “Instead of focusing on just 10% of us involved at a high-level we did it across various operational teams, such as earthworks and delivery drivers. It’s important not to just select on behaviours, but to also measure it and make it real,” says Cross. One change from this work was an improvement in safety culture – one of the top imperatives of the project. Workshops uncovered an issue concerning the reporting of ‘near-miss’ safety problems. A blame culture and a disincentive to flag issues – because stopping work to discuss them hit driver bonuses – meant too few were reported and behaviour could not be improved. “We were trying to promote health and safety but we were driving people not to report,” says Cross. “We made a simple change to ensure any stoppage time was done on a pro rata basis.” “These kinds of things are output benefits made possible because of the way we selected suppliers,” says Spencer. “They were already aligned to our imperatives – we weren’t dropping new things on them – we just understood better how to improve things.”
Giving the example of the labour package, Cross says the team conducted blind score PQQs of potential partners to ensure they were not biased towards those they already knew. In these, they asked a series of questions to find out more about their operations besides cost. These covered modern slavery, training and development, health and safety and more. “That gave us insight into how good they were on these, rather than hearing it from a salesperson,” says Cross. They then hit the road to visit potential providers to validate what the top nine bidders had told them. In some cases, this uncovered inconsistencies. “This exercise mitigated a lot of risk,” says Cross. “There were companies who looked good on paper but were less so in practice; there were also those who undersold themselves.” Six companies made it through to the final selection process. They played games and were put through a number of scenarios to evaluate their ability to work together. “We wanted four companies to form an integrated labour team, so we had to test their capability to do that,” adds Cross.
Behavioural procurement wasn’t limited to sub- contractors. The two biggest plant suppliers in the UK worked together on this project in ways never seen before, including sharing machines, collaborating and investing together. “By sharing things like lorry movements we made savings on the number of miles travelled, the fuel used and carbon expended,” says Spencer. “There were so many benefits from suppliers operating differently.” In return, incentivised models delivered added-value for suppliers.
Outcomes and outputs
Fact-based feedback
Cross: “Our focus was on being world-class on safety, customer satisfaction and delivery. The data reflects we achieved all of those. We made it clear those were genuinely important by the way we talked about and weighted them. Words are never enough – we proved it.” “Ultimately, it was a £1.5bn project, delivered eight months ahead of the programme and on budget, which for an infrastructure scheme is unheard of in the world at the moment,” says Spencer. “We believe the collaboration within the supply chain played a major part contributing to that and we made sure we celebrated and shared successes with suppliers.” Both the integrated delivery team and members of its supply base scooped awards for their work on this project. And now other programmes are adopting the same approach, including the HS2 high-speed railway project. “It’s probably seen as the project in the UK construction industry that moved the needle and demonstrated the art of the possible,” says Spencer.
Once suppliers were aboard and the project had begun, the team drew on a digital system that gave them ‘one version of the truth’ to ensure supplier performance was judged on the basis of accurate information. The use of facts built trust and transparency between Cross's team and the supply base. Cross describes one instance when an internal complaint was made that the supply chain was underperforming. The charge was that the supply chain was late in supplying what had been requested. “We were able to find out exactly what happened,” says Cross, and when they did, they discovered the supplier had surpassed its contractual commitment. “We were supposed to give seven days' notice for requests for additional labour or materials. When we looked into it, we found we had only given them two hours' notice. The supplier managed to turn things around in one day. So the facts were, from a collaboration perspective, the supplier was
Productivity and performance
Cross and his colleagues also carried out on-site visits to see if they could make any recommendations that might boost capability, capacity and skills – areas which would help all parties and ultimately achieve better performance outcomes. At one location Cross was asked for his advice to inspire the team to collaborate. “I didn’t tell them what to do, but I noticed they shared a very small break room and suggested they invest in those who worked there before doing anything else. “Within a week they had improved the canteen where 200 staff took time off together, which we know would have motivated staff and improved their productivity.”
IF YOU INVEST IN YOUR PEOPLE, WHICH INCLUDES YOUR SUPPLIERS, CREATE THE RIGHT ENVIRONMENT AND REMOVE THE BLOCKERS TO SUCCESS, THEY WILL DELIVER FOR YOU.
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STATE OF FLUX
2021 GLOBAL SRM RESEARCH REPORT
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