Lessons Learnt from Highways Supplier Relationship Development Road 2011 Conference 21st November 2011 Philip Snowling PSG Business Consulting  07590 697702  psnowling@snowling.uk.com

Agenda SRD Highlights/Lessons Learnt Principles – what is SRD, why do it Who has been involved Approach Highlights/Lessons Learnt Results from Questionnaires Best Practice identified from Negotiations

SRD - Principles To analyse the relationships between buying and supplying organisations to identify scope for greater efficiencies It’s a two-way process Opportunities to improve performance – smarter contract behaviors Opportunities to implement cost savings for mutual benefit

Why would you do it? Service & Performance Improvements Protect council interests in supply chain (e.g. credit crunch impact) Industry-shaping Efficiency Gains Cost Avoidance for All Parties Knowledge and Information Sharing Risk Management Develop Strategic Commercial Approach Benefits handout 4

What’s in it for suppliers? Reduced cost bases Develop commercial fitness Strengthen existing relationships New dialogue with clients Improve infrastructure and process Deliver best value services Develop client facing strengths

Who has been involved

SRD – Approach Series of Briefings and Meetings Create initial SRD Strategy via - Market Information - Common Assessment Framework - Project Manager Visits Appoint Negotiation Team Negotiation Sessions – best practice identification SRD Strategy document Negotiation Meetings You and Your Contractor – www.capitalambition.gov.uk/srdbestpractice   SRD White Paper -  www.capitalambition.gov.uk/srdwhitepaper   The “SRD toolkit” – www.capitalambition.gov.uk/srdtoolkit

Results from CAF Questionnaire - Overall Questions were grouped – we have averaged the scores in each group for both contractors to determine any common areas of strength/areas for improvement Billing scores lowered by responses to “Transparency of charges” (4.4) and “Discount for prompt payment” (1.0) ICT scores disappointing given that the number different of Highways systems is quite low Average for Conway and Volker ICT and Billing are the weakest areas

Lessons Learnt Process could be streamlined – 1-1 meetings take time to arrange, CAF provides some quantification Difficulty (reluctance from contractor) in getting savings amounts declared Project emphasis shifted to identification of best practice – contractors are well placed to identify/contrast these Varying exploitation of Highways Systems Mobile Accuracy of Asset Inventory Sometimes hampered by local IT support Hosted service

Overview of Findings from Negotiations Best Practice and number of Boroughs currently following them

Areas of Commonality Recycled materials – not identified by Conway – but known to be applying. Common practice Payment Mechanisms Sliding scale/Volume discount Fixed Spending profile Safety Inspections by Contractor Early Contractor Involvement Walk & Build – commonly in operation Co-Located Teams Contractor undertakes (some) Design

Other Points Points determined during SRD process Contractors can do more Approach to KPI / Contract Monitoring Conventional wisdom – its a good sign if “contract is kept in the drawer” However – don’t be afraid to invoke if situation requires it Raise and discuss issues early TRUST

Further Information You and Your Contractor – www.capitalambition.gov.uk/srdbestpractice   SRD White Paper – www.capitalambition.gov.uk/srdwhitepaper   The “SRD toolkit” - www.capitalambition.gov.uk/srdtoolkit Highways SRD - Common Assessment Framework Reports Highways SRD - Best Practice Reports Overview – Conway Clients – Volker Highways Clients - Please contact P. Snowling for details

Thank you