Comment

01.09.13

Why supply chain maps could prevent the rail industry from having its own horsemeat scandal

Source: Rail Technology Magazine Aug/Sept 2013

Annette Gevaert, Director of Rail and Transport at Achilles, describes a worrying lack of knowledge among businesses about their supply chains – and what can be done about it.

Rail companies should create maps of their supply chains to prevent an ‘industry version’ of the horsemeat scandal. Research shows that 40% of businesses procuring only in the UK have no information about their suppliers’ suppliers. Despite this lack of information, 92% felt ‘confident’ in their ability to manage potential issues.

Achilles runs Link-up, the supplier registration and pre-qualification scheme for the industry. The company commissioned an independent survey of 130 procurement professionals working in a wide range of sectors – including rail and transport – to ascertain their key supply chain challenges. 

Achilles runs Link-up, the supplier registration and pre-qualification scheme for the industry. The company commissioned an independent survey of 130 procurement professionals working in a wide range of sectors – including rail and transport – to ascertain their key supply chain challenges. 

Results showed that:

• 40% of companies procuring only in the UK – including the rail and transport sector – had no information about their tier 2 suppliers

• 18% of all companies – including those in the rail and transport sector – had no information about tier 2 suppliers

Annette Gevaert, Director of Rail and Transport at Achilles, said: “Like most businesses, the rail sector is now dependent on increasingly complex and globalised supply chains. 

“Rail is a safety critical industry, with people at its heart, and we must take proactive steps to address potential risks in supply chains before they affect people, planet and profit. The horsemeat scandal unfolded in a different sector but the same issues – caused by a lack of supplier visibility – could easily affect the rail industry.

“Our research suggests that businesses do not know who their tier 2 suppliers are and yet they remain ‘confident’ in their risk management processes – without the benefit of a complete picture of information. This suggests that procurement professionals are either unaware of the risk posed by tier 2 suppliers, or overly complacent in their existing systems. By creating maps of supply chains across all tiers the rail industry could gain visibility and traceability of potential risks and act as a role model to other sectors.”

The situation is also reflected among SMEs. A third (30%) of companies with a turnover below £25m have no information on their suppliers’ suppliers, compared to only 13% of companies with a turnover of over £1bn. 

Edward Funnell, rail policy spokesperson for the Chartered Institute of Logistics and Transport, said: “This study should come as a wake-up call to rail companies and the Institute welcomes the fact that this research has been undertaken.

“While many companies take good care to ensure their suppliers comply with high standards of care to ensure that products are safe, how many are checking the levels of compliance with quality and safety standards of their suppliers’ suppliers? 

“Many ‘tier 2’ suppliers may well be excellent providers, but as recent events have shown, when it comes to the manufacture of safety-critical products, companies who procure products from their suppliers need to ask questions of their suppliers’ suppliers too. Dented reputations, safety scares, unwanted media attention and additional financial and legal costs are much costlier than taking a little time to carry out checks on those who supply your suppliers.” 

Achilles provides Supply Chain Management and Supply Chain Mapping services. This allows companies to maintain accurate data and ‘map’ their extended supply chains, to view supply information beyond tier 1 suppliers. 

An automated ‘cascading invitation’ from buyer to supplier to supplier’s supplier ad infinitum gathers comprehensive information about the supply chain, protecting buyers from global events and allowing best practice in the mitigation of risk.

* Research was conducted on behalf of Achilles by IFF Research in March 2013 amongst 131 directors, procurement managers and buyers of large UK businesses with over 250 employees.

Comments

There are no comments. Why not be the first?

Add your comment

 

rail technology magazine tv

more videos >

latest rail news

View all News

rail industry focus

Leader of Rotherham Council and Mayor of Doncaster ask Government to re-think HS2

30/09/2019Leader of Rotherham Council and Mayor of Doncaster ask Government to re-think HS2

Leader of Rotherham Council, Chris Read and M... more >
Developing the future of UK infrastructure invested in Southampton

27/09/2019Developing the future of UK infrastructure invested in Southampton

The University of Southampton officially unve... more >

editor's comment

23/01/2018Out with the old...

Despite a few disappointing policy announcements, especially for the electrification aficionados amongst us, 2017 was, like Darren Caplan writes on page 20, a year generally marked by positive news for the rail industry. We polished off the iconic Ordsall Chord (p32), hit some solid milestones on Thameslink (p40), progressed on ambitious rolling stock orders (p16), and finally started moving forward on HS2 (p14) ‒ paving the way for a New Year with brand-new infrastructrure to... read more >

last word

Encouraging youngsters to be safe on the railway

Encouraging youngsters to be safe on the railway

This summer, Arriva Group's CrossCountry and the Scout Association joined to launch a new partnership to promote rail safety among young people. Chris Leech MBE, business community manager at the TOC, gives RTM an update on the innovative scheme. Recognising that young people are more likely to take a risk trespassing on railway tracks, C... more > more last word articles >

'the sleepers' daily blog

NPR, TRU & Fleetwood Mac

18/10/2019NPR, TRU & Fleetwood Mac

Switch up your playlist with the first #WeAreRTM podcast, gain exclusive insight into the leaders running the rail industry their opinions on recent headlines, visions for the future and meet the personalities behind the job titles. It's not your average interview. Anna-Jane Hunter, Network Rail’s director, North of England rai... more >
read more blog posts from 'the sleeper' >

interviews

Andrew Haines, CE of Network Rail, tells BBC News his organisation could issue future rail franchises

24/06/2019Andrew Haines, CE of Network Rail, tells BBC News his organisation could issue future rail franchises

Andrew Haines, the Chief Executive of Network Rail, has told the Today programme on Radio 4's BBC’s flagship news programme that he wo... more >
Malcolm Holmes, executive director of West Midlands Rail Executive, announced as TCR Midlands speaker in Birmingham

24/06/2019Malcolm Holmes, executive director of West Midlands Rail Executive, announced as TCR Midlands speaker in Birmingham

Ahead of his appearance, Malcolm Holmes spoke with Rail Technology Magazine about what key leaders in the industry were doing to improve rail in ... more >
Advancing the rail industry with management degree apprenticeships

08/05/2019Advancing the rail industry with management degree apprenticeships

In answering the pressing questions of how current and future generations of managers can provide solutions to high-profile infrastructure projec... more >
Women in rail - is the industry on the right track?

12/03/2019Women in rail - is the industry on the right track?

RTM sits down with Samantha Smith, sole female member of the TransPennine Route Upgrade Alliance Leadership Team, to find out more about encourag... more >