“People think of England as a rainy place, but London now gets the same amount of annual rainfall as Jerusalem,” says David Wylie, Director of Commercial and Procurement. “We’re having drier summers and a greater risk of drought, as well as sudden downpours where we get a month’s rain in a few hours which can overload the network.” The business, which is two years into an eight-year transformation programme, led by CEO Sarah Bentley, is working to improve water resilience. “We’re looking at how we can build a more resilient and reliable water supply network as well as reducing water consumption. The average person uses around 140 litres a day. We need to significantly improve water efficiency alongside upgrading our network and developing new sources of water if we’re to build in greater resilience.” We spoke to Wylie as the UK experienced a record high of 40.2 degrees in conditions slapped with a ‘Red: Extreme Heat’ warning by the country’s weather service. The July heatwave led to the highest water consumption Thames Water has seen in over 30 years. And while it had enough supply, the challenge was to be able to process quickly enough. Plans not only include greater water resilience, but also improvements to the quality of river water, reduced environmental impact and better social value. The company transformation, which is aimed at getting the organisation fit for the future, is focused on simplification, improving quality, investment in assets, radically improving customer service and digitalisation. “We’re at an inflection point,” says Wylie. “Not all the suppliers who have got us to where we are now will be the same people who will get us to where we want to go. It will depend on which suppliers can pivot on the journey with us and which new suppliers we need.
“Thames is going through a big change. We have a major, long-term transformation plan to improve the service we provide and we’re not going to be able to deliver everything we need to if we don’t bring our suppliers with us.” For him the case for supplier relations has never been stronger. Running the business Thames Water spends around £2bn a year on goods and services sourced from 3,500 suppliers. A segmentation process has identified 50 key suppliers. These are split into ‘tier 0’ which includes around 15 of its most critical partners. They have executive-level sponsors and dedicated contract and relationship managers. A further 35 ‘tier 1’ strategic suppliers also have dedicated senior staff to oversee the contract and manage the relationship. And Wylie heads a 120-strong department that supports all the organisation’s procurement and supply chain needs. “Around 80% of our spend is with third parties, so the management of it is key. We’re looking at how we can educate everyone in the business to drive consistency in our treatment of suppliers,” he says. When Wylie joined two years ago and asked suppliers what it was like to deal with Thames, the immediate feedback was that it was unresponsive, difficult to engage with and uncommunicative about future plans. He describes the organisation’s previous treatment of suppliers as largely taking a ‘parent/ child’ approach; where it is now
Suppliers part of ‘Team Thames’
“We’re coming out of a procurement transformation at the moment: we want an internal function that is centred around what internal stakeholders need; what’s going on in the market; and knowing our suppliers. We need to put all those elements together to present a more joined-up view and ultimately improve delivery to the end customer.” One immediate way in which he’s sought to improve communication and contact with suppliers is through a new innovation scheme. Where previously suppliers would send in ideas which “disappeared into the ether” and then typically gave up trying; ideas now go through a triage process within a set time limit. Of 300-400 ideas already submitted, Thames is acting on or investigating around 10% of them, with more in the pipeline. “There are a lot of brilliant ideas out there and the more ideas we get, the better outcomes we can achieve.” →
The utility company is talking to suppliers about plans far into the future and how it can improve water resilience
working to move to more peer-to-peer interactions.
“The business case for supplier management has fundamentally changed over past two years”
The water sector typically works in five year cycles to fit with its regulatory cycle. This year, however, Thames Water is developing its vision for 2050. It is the first time it’s attempted to look so far into the future and it is seeking supplier input into how it is shaped.
This work is crucial to bolster water resilience that will ensure taps won’t run dry. Climate change and population growth are having a fundamental impact on water resources and Thames Water, the UK’s largest water and waste water company, is working to future-proof its provision.
A near-pristine Bronze Age spearhead was among historic artefacts found during work to build a new wetlands at a sewage works
Hi-tech GPS trackers have helped it track down companies that steal water without paying
The utility company services 15 million customers across London and the Thames Valley
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