PROCUREMENT & SUPPLY CHAIN
‘A supplier-dependent organisation’: Network Rail Infrastructure Projects and how it is changing
Network Rail’s Infrastructure Projects business is likely to spend around £23bn during CP5 – and is determined to change the way it works with its supply chain and key contractors to improve performance, delivery, safety and sustainability. RTM heard from finance and commercial director David McLoughlin, national supply chain director Guy Stratford, and commercial projects director Stephen Blakey.
N
etwork Rail says the past 18 months to two years have been a period of major
change in its relationships with its suppliers and partners, with far more emphasis now on collaborative working, alliancing, speedy and fair payment, sustainable working practices, supplier engagement, new contract models and a far more transparent pipeline of upcoming works.
The next round of supplier feedback surveys, conducted by Ipsos MORI, is due soon – but the last set for 2012 already showed very positive movement, with 63% of suppliers saying they’d speak highly of Network Rail, and only 34% saying they’d speak critically. That was a big change on 2011 (52% speak highly, 44% critical) and there has been vast improvement since the lowpoint in 2009 (43% speak highly, 55% critical), though Network Rail also notes that some specific factors were in play that year, including the fallout from decisions to defer major works, and the huge fall in business confidence around the country due to the recession.
Network Rail generally, and its Infrastructure Projects division particularly, is a supplier- dependent organisation, and 70-80% of its multi-billion pound budget (around £4.5bn a year) is passed to suppliers.
Commercial projects director Stephen Blakey said: “We’re a supplier-dependent business: their performance is a huge reflection on our performance, and there’s a mutual dependency.”
He said the improvements in the 2012 feedback survey were “really important to us”, adding: “It’s an independent temperature check of support and of views of us as a progressive organisation, on the degree to which we collaborate, the degree to which we’re turning aspirations into tangible differences. We got a really strong response; that’s brilliant and our fingers are crossed that that trend will continue in the next round of the Ipsos MORI poll.
“There shouldn’t be any surprises – if we were fumbling the ball in some way, we’d expect,
with all the touchpoints we have, to have picked up on that already.
“It’s about trying to drive outstanding value in a collaborative context – that’s what we’ve achieved in the last 18 months.”
‘Generating outstanding value for taxpayers’
Network Rail’s Strategic Business Plan would have IP spending £23bn over the five years of CP5, and while that will be reduced slightly if the ORR’s draft determination published in early June is what comes to pass, it is still a vast amount of money.
IP has about 4,500 staff, but once the cost of employing and training them is accounted for, plus its own internal business spending, the lion’s share goes straight to its tier one contractors, who again pass much of that funding through to their own sub-contractors.
Continued Overleaf >
rail technology magazine Jun/Jul 13 | 47
Below: Network Rail IP handles the procurement of the organisation’s major projects like London Bridge, and the Hitchin Flyover (overleaf).
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