We are pleased to launch the fourth volume in our series on Nuclear Factory Thinking – Procuring for Productivity – Transforming procurement to become the enabler . Lead author Adam Newbould has worked with an amazing team of co-writers to produce this document that clearly sets out how procurement influences productivity in nuclear projects and how to transform procurement to become the enabler.
The perception of procurement needs to change, from its current position of being seen as a barrier to progress and to become the ‘Enabler’ of productivity. The construction industry, as compared to other sectors, has flat lined in terms of productivity. One of the reasons for this is that the approach to procurement has not evolved to address the current landscape of the industry, with major clients now increasingly reliant on the expertise of external contractors to deliver complex outcomes.
It is not sufficient to just simply implement improvement initiatives within client organisations. The network of organisations that are required to come together to deliver an infrastructure project need to be coordinated and managed effectively. Therefore, the role of procurement needs to move beyond getting the contracts in place, to managing boundary-spanning enterprise-wide activities. Developing suppliers’ capabilities by implementing training and continuous improvement programmes, forming collaborative relationships not only with its own supplier network, but also between all of the suppliers in the construction sector supply chain.
It should be acknowledged that procurement, or acquisition, as it is sometimes referred to, has come a long way in recent years. However, there is still far to go and still much to do. Building on the good work done by Project 13, The Institute of Civil Engineers and the Infrastructure Projects Authority. It is acknowledged that a radical change to the way we go about procuring or acquiring the goods and services required to achieve productive outcomes, is undeniable. In this paper we examine the key issues that need to be addressed to allow this to happen.
A pan-sector workshop was held at the end of January 2019, where representatives from client organisations, major construction contractors, procurement experts, Legal Advisors and Academics were invited to participate in a Brainstorming session to collectively identify ways to make the whole procurement cycle more efficient, easier and quicker to navigate both for the supply chain and for major clients.
Specifically, the objectives of the of this exercise and ultimately this paper, are to address the four main deficiencies that are a recurring theme of current procurement practice;
- The complexity of the process (particularly in public contracts)
- Failures in proper application of evaluation criteria
- Too much emphasis on cost, over value
- The amount of time/resources/money spent on PQQ & ITT returns
The following seven chapters of the paper were identified as the key factors that need to be addressed if we, as procurement professionals are to bring about positive and radical change to a Construction Industry that is currently in a state of disrepair and could soon be broken altogether.
If this paper resonates with you and you are interested in better understanding of the principle of Procuring for Productivity and you would like to get more involved and support development of initiatives that will have a positive impact on the industry, please get in touch.