01.05.07
Suppliers still critical of Network Rail
RTM has recently received a number of complaints from suppliers about the way in which Network Rail has managed the product approval process. One of the main complaints is about very long delays in processing applications and products not being approved.
This comes a something of a surprise because only last year Network Rail conducted a supplier perception survey which found that more than one third of suppliers were not satisfied with their working relationship with Network Rail.
As a result of the survey, Network Rail made a commitment to improve supplier relationships and identified ways in which the procurement process could be improved. A number of measures were put in place which would “deliver lasting change and would be embedded throughout 2007”.
We put the complaints to Network Rail and received the following response.
“Network Rail has no desire to irritate good suppliers, we see that in order to ensure best value for our company that we have a key role to play, which is why Network Rail devotes so many resources to the process. We readily acknowledge that we are not perfect and we are always looking for ways to improve the process.
But our overwhelming concerns in running the railway infrastructure are that it is safe and reliable. As such we have to ensure that all components, parts and equipment used to operate the railway infrastructure must conform to the highest standards of safety and reliability. Consequently, product approval is something we take extremely seriously.
As a responsible company Network Rail has a view of how it wishes to protect and develop the assets for the nation. These translate into asset policies which are used to refine which products we wish to use as part of our business. Clearly, not every product is going to fit in with our view of how to do business even though in itself it might be a very good idea. Hypothetically if it were our policy to throw away/recycle ballast after the first 2 years it would not be a good idea to invest in ballast cleaning equipment no matter how good it was. Therefore a product has to align with our policy. If the idea is such a good idea that it changes our asset policy then reversing it will take time, as it would with any company.
Every time we adopt a new product we have to ensure that our engineers and contractors have the right level of training and experience to ensure the product is properly installed and used, with the appropriate handbooks and guidance updated accordingly.
Therefore accepting a new product is an expensive matter in a necessarily tightly controlled environment. As a result there has to be a very good reason to accept something from a financial perspective.
Furthermore, just because something is 40 years old does not mean it is no longer fit for purpose. In actual fact in some cases the old product is probably better value. Obsolescence is a word that until recently was not a great concern. However, in the modern world computers dominate many products. These devices are continually advancing and in some cases the computer chip you bought one month is obsolete a few months later. This creates a great headache from a maintenance perspective given typical asset life cycles of 30 years or more.
In old products the components were often simple to understand and use, meaning that even if the manufacturer stopped supplying, a specialist repair supplier could fix it. With the wide spread use of ASICs this is no longer the case. This means when the prime supplier moves on the product instantly becomes difficult to maintain.
Being part of this continual obsolescence cycle creates a large drain on resources, so we needs to be a good reason for moving from a stable product to a new one because of the hidden costs of obsolescence.”
This seems entirely reasonable and it’s understandable that safety and reliability are of paramount importance for Network Rail.
However, the complaints we have received suggest that Network Rail is failing to deliver in two of the areas in which it committed to improve-making the procurement process more transparent and improving communications with suppliers.
It seems that Network Rail still has some way to go to keep all of its suppliers happy.
Tell us what you think – have your say below, or email us directly at [email protected]