INTERVIEW / HITACHI RAIL GROUP CPO RORY LAMONT
Relationships are rooted in our values
Interview with Rory Lamont, CPO
Image credit: Hitachi Rail
Bullet train manufacturer Hitachi Rail is no stranger to speed, but it is the Japanese values of wa, makoto and kaitakusha–seishin that help it run so smoothly and make strong relationships the norm.
signed an exclusive agreement to develop battery packs to power zero- emission trains and create a battery hub in the UK’s north east. Future plans include aiming to expand further into key geographies, such as North America and India, and deliver new digital and Internet of Things (IoT) products, drawing on the wider Hitachi Group’s technology capabilities and R&D.
And while its cultural roots remain in Japan – where its first steam and electric locomotives were built in the 1920s, followed 40 years later with the now world-renowned bullet trains – around 80% of Hitachi Rail’s annual revenue, which in 2019 reached ¥580.3bn, now comes from elsewhere. It continues to deliver Shinkansen (bullet trains) for Japan but has successfully exported its technology and expertise to multiple rolling stock projects across the globe. These include high speed, light rail and metro, and driverless technologies for passengers and freight. It has a presence in 38 countries, 11 manufacturing sites on three continents and some 12,000 full-time employees. Organic expansion in the UK led to major contract wins including the Class 395 rolling stock for High Speed 1 and the Intercity Express Programme, followed by the acquisition of global brands AnsaldoBreda and Ansaldo STS. Now it has teamed up with competing train manufacturer Bombardier in a joint venture for the UK’s second high-speed rail project (HS2). A £2.75bn contract to design, build and maintain at least 54 trains for the first phase. And in July, Hitachi Rail and Hyperdrive Innovation
from Japan to the UK in 2015. “Hitachi Rail has spent around £1.8bn in the UK supply chain since we opened our UK manufacturing facility in 2015. For every pound we’ve spent, we calculated that a further £1.30 is generated by our suppliers and members of their supply chains,” says Lamont. “We haven’t typically gone to traditional suppliers, but have instead worked with a lot of small suppliers like those for metal parts, glass and kitchens. “We invest in relationships and take time to build them, then suppliers want to work with us again and again.” It built up from an initial base of 10 UK employees to the current count of 2,500, around 400 of whom are in procurement.
D espite struggling through a bout of sinusitis “thankfully it’s not Covid”, the vagaries of video-calls (an audio glitch our end), and juggling work and home life (as he awaited a call to secure his son’s birthday present), when asked how supplier relationship management works at Hitachi Rail, Group CPO Rory Lamont immediately enthuses. “People here see the development of long-term relationships as the absolute standard way of thinking, which is a real breath of fresh air.” Lamont, who joined the business just under three years ago says he’s never worked anywhere where relationship management thinking comes so naturally. “We don’t talk much about ‘SRM’ here, it’s just expected that you collaborate with the supply chain. It’s not only procurement, but everyone. The engineers appreciate the importance of long-term relationships
and it’s very much understood at a senior level. “Supplier relationships are viewed as something to be invested in, nurtured and brought on. We’re very lucky.” The approach mirrors the company’s Japanese values of ‘wa’ meaning harmony and showing respect to colleagues, suppliers, clients and stakeholders; ‘makoto’, for sincerity and acting with integrity; and possessing a pioneering spirit – ‘kaitakusha-seishin’.
Partnership working
Success and expansion is in part credit to an invested and supportive supply chain, a fact Lamont publicly acknowledged in an open letter to suppliers posted on his Linkedin account earlier this year. That message thanked suppliers for their ongoing and pragmatic help, noting that nearly all the providers it had worked with in the past year operated in countries affected by Covid-19. The company also reached out to vendors in individual letters and asked them to get in touch if they were experiencing challenges. “We like to think our approach gives us a point of differentiation in the supply chain,” he says. “I always ask account managers what it’s like working for us and they tell
Embracing change
If you listen, the business will tell you what’s important, then you know what you have to focus on.
Leading with ambition and flexing to meet the changing needs of the business is what kaitakusha-seishin is all about. It is this focus on adaptability that saw Hitachi Rail trial its technology in the UK market in 2002, and following massive success, shift its headquarters
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2020 GLOBAL SRM RESEARCH REPORT
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