© 2013 Sigma Management Development Limited THE VALUE IMPROVEMENT PROGRAMME & HOW IT WORKS COMMERCIAL DIRECTORS FORUM 3 DECEMBER

© 2013 Sigma Management Development Limited AIM To:- give you some background to the Value Improvement Programme (VIP) and how it has worked in the past show how we have developed New VIP in the light of that experience and how it could help improve collaboration going forward explain the rationale behind the four pilot workshop programmes run over the last 18 months or so 2

© 2013 Sigma Management Development Limited BACKGROUND WHAT IS VIP? CONTEXT First established in 2002, VIP is a rail industry initiative based around an agreed Code of Practice which is embedded via externally facilitated workshops. The workshops are facilitated by Sigma MDL and Russell Chesterman Their objective is to drive improved efficiencies, added value, and reduced costs via promoting & establishing more open behaviours and collaborative working The VIP Code of Practice is a short document, available on both the RIA and Network Rail websites. You all have a hard copy of the Code and these slides. 3

© 2013 Sigma Management Development Limited BACKGROUND WHAT IS VIP? – KEY AREAS OF THE CODE OF PRACTICE It encourages us to :-  Communicate well, early and often  Share plans & uncertainties  Involve suppliers from an early stage  Concentrate on value, innovation & life-cycle costs 4

© 2013 Sigma Management Development Limited BACKGROUND WHAT IS VIP? – KEY AREAS OF THE CODE OF PRACTICE (2) And:-  Obtain win/win solutions for all parties  Challenge attitudes, customs and standards where they do not aversely affect health and safety  Develop ideas for continuous improvement and cost reduction  Treat people as you would like to be treated – behave with mutual respect 5

© 2013 Sigma Management Development Limited BACKGROUND WHAT IS VIP? - EXPERIENCE TO DATE The workshops can be used on individual projects; work programmes; framework contracts or anywhere where collaborative relationships are required. We have run over 100 successful workshops to date. But the industry landscape has changed significantly since So the initiative is being re-launched as ‘New VIP’ to meet the challenges of collaboration, cost reduction and efficiency (eg post McNulty) and amend the workshop process to:- 6

© 2013 Sigma Management Development Limited BACKGROUND NEW VIP – WHAT ARE THE DIFFERENCES? o Use the workshops earlier in a process to build relationships rather than as a post-contract intervention measure once relationships had broken down o Build in measureable business outcomes through improved behaviours. o Do more to support Innovation in the industry o Develop Integrated Supply Chain teams - involving Tier 2/3/SMEs o Support the implementation of BS11000, the national collaborative working standard adopted and endorsed by Network Rail and many in their supply chain 7

© 2013 Sigma Management Development Limited WHERE NEW VIP CAN BE APPLIED Delivery Test and Commissioning Operations and Maintenance 8 Work Winning Bid Support Development and Design All relevant NEW VIP programme outputs can be used to help provide evidence for BS11000 certification

© 2013 Sigma Management Development Limited NEW VIP PILOTS UPDATE NEW VIP –GOVERNANCE & PROCESS We have a VIP Steering Group, chaired by RIA, which as well as RIA, Sigma & supplier reps, includes clients representatives from ATOC (Neil Ovenden); Network Rail (Mike Pollard), HS2 (Phil Oxley) and TfL (Dorothy Wallace) We have recently run four pilot new VIP Programmes which were 80% funded by FutureRailway The four pilots were with Alan Dick Communications, Kier, Carillion Powerlines and Alstom Here are some headlines from the Kier workshops on the national footbridge programme 9

© 2013 Sigma Management Development Limited WHY DID WE ADOPT THE NEW VIP PROCESS  Kier awarded National Level Crossing Risk Reduction Programme contract for design and delivery of 104 footbridges at existing level crossings.  Key to success was close collaboration of the supply chain (NR, Kier, Sponsor RAMs and Tier 2 suppliers) to reduce costs through o Efficient delivery o process improvement o innovative and repeatable solutions

© 2013 Sigma Management Development Limited WHY DID WE ADOPT THE NEW VIP PROCESS The VIP approach was chosen as it would:- Enable teamwork, supply chain integration & build critical levels of trust & enable innovation Capture shared ideas for process and design improvements Enable challenge of the current NR specification to establish more cost effective designs Focus on national delivery and overcome regional barriers Help to reduce programme delivery from 4-3 years

© 2013 Sigma Management Development Limited KEY OUTCOMES Key outcomes were as follows:- Helical pile installation in 18 hours of a 34-hour possession with no requirement for contingency possession Bridge superstructure in 12 hours of available 54 hour possession Overall cost savings of around 18% All parties benefitted from the innovations, reduced costs through open collaborative working & improved behaviours, enabling shared ideas to reduce time and cost

© 2013 Sigma Management Development Limited SUBSTANTIAL COMPLETION IN 30 HOURS!

© 2013 Sigma Management Development Limited WOULD WE USE THIS PROCESS AGAIN?  New VIP has proven beneficial to all parties involved in the Footbridge programme  Process improved collaboration between all parties developing areas for continuous improvement and reduced costs  Challenges attitudes, existing approaches and current standards  We are now considering a “Phase 2” to cover GRP construction Further cost savings More installations Reduced delivery time For further information from Kier contact Richard Turner at

© 2013 Sigma Management Development Limited RAILWAY INDUSTRY ASSOCIATION 22 Headfort Place London SW1X 7RY Telephone Website: SIGMA MANAGEMENT DEVELOPMENT LTD 4 The Courtyard Denmark Street Wokingham Berkshire RG40 2AZ Telephone: Website: thinksigma.co.ukthinksigma.co.uk FOR FURTHER INFORMATION