Rail Industry Focus

01.09.12

Transforming perceptions

Source: Rail Technology Magazine Aug/Sept 2012

Network Rail is transforming its relationship with its supply chain, and the results of the 2012 suppliers’ perceptions survey back up its claims of greater engagement. Kate Ashley reports.

At a roundtable event held on August 7, industry professionals from Network Rail Infrastructure Projects (IP), RIA and CECA discussed the results of the 2012 suppliers perception survey and how a new confidence in the industry was making it possible to drive forward engagement throughout the supply chain.

Attending were Network Rail Infrastructure Projects finance & commercial director David McLoughlin and its head of supplier engagement Katie Ferrier; Ian Sexton, director of contracts and procurement at Network Rail; Mike Cocks, UK rail director at the Civil Engineering Contractors Association (CECA); and Peter Loosley, policy director of the Rail Industry Association (RIA).

A quantum jump

Overall, the survey results (see box, right) paint a positive picture, with more and more suppliers becoming confident to raise issues with Network Rail and highlight areas for improvement.

McLoughlin said: “It’s fair to say that in the past the results have been mediocre at best. The results in 2012 have been, I would say, a quantum jump from where they’ve been in the past.”

This improvement correlates with work over the past year, he added, and continuous effort is being targeted at the issues highlighted by suppliers.

Loosley highlighted the verbatim comments from suppliers as a key way to gauge opinion, and an honest appraisal of how they really feel: “Last year I think people would say, ‘We know everybody recognises what the problems are but not much seems to be happening’. I think now we are seeing that.

“It’s clear that the results are very positive – the result of an awful lot of hard work over the last year.” But he added: “This is not job done; we are not out of the woods yet. There is still quite a lot to do.”

Room for improvement

Loosley highlighted four key areas raised in the survey; better planning, workload visibility and longer term contracts; more consistency of approach; more collaboration and openness; and earlier supplier engagement.

He then described ongoing work to improve that, with tender events, estimates of probability, timescales and successful tenders currently being published on Network Rail’s website.

But this database needs to be updated regularly and consistently, with awareness strengthened among suppliers. Stable project specifications could help to reduce late changes and improve relations between suppliers and Network Rail, and coordinating timescales could ensure suppliers are neither under-used nor overloaded. In terms of consistency from Network Rail centrally and the actual contracts signed, Loosley cautioned: “There is a perception that the message is fragmented.”

He added: “We also need to look at consistent behaviours and culture across the organisation. That’s very easy to say and hard to do but it’s beginning to happen; we are seeing some of this but there is a long way to go.

“We are doing an awful lot, people recognise we’re doing a lot, we just need to do it quicker.”

Speed of change

Speaking of the speed of transformation, many at the event were impressed by Network Rail’s ability to move from theory to practice in such a short period of time.

Cocks said: “The speed of change is quite phenomenal. The listening now is followed up by actions and ‘what can we do about it’.”

But he added: “There’s no complacency that those things should be ducked.”

McLoughlin acknowledged that the organisation needed to constantly improve, especially in the areas of collaboration and consistency.

All Network Rail attendees were in agreement that Sir David Higgins provided a “catalyst” when he joined the company as chief executive in early 2011, with a different way of thinking and a new approach to engagement. He is often credited with ushering in a new and more collaborative ethos at Network Rail, following the ‘command and control’ period when Iain Coucher was in charge and the organisation was trying to deal with a legacy of problems from the Railtrack era.

Loosley said: “The level of engagement we have now with NR is higher than it has ever been, both strategically and at working level, through various different forums. The whole relationship is a much more interactive one – there is actually dialogue and things happen as a result of that dialogue.”

Ferrier pointed out that this speed of change was reflected in the way information was published to their website.

She said: “It’s really important to us to act on change immediately.”

The Commercial Directors’ Forum was also cited as a key example of change, where the rail industry can now meet and make joint decisions on how to drive performance

“It definitely isn’t a Network Rail-led thing in that we have a pre-set outcome that we’re just using that forum to get to,” McLoughlin said. “It’s genuine discussion and decision, from the floor, about how we move forward.”

Talking to tier 2

Whilst communication is improving with tier 1 suppliers, the rest of the supply chain has often felt ignored in the past. On March 22, Network Rail held its first tier 2 suppliers’ conference – for many companies, it was the first time they had ever spoken to someone from Network Rail, let alone been invited to give their views on engagement and delivery.

The majority of Network Rail’s spend actually goes through the supply chain to these companies, meaning that it is important for Network Rail to manage this relationship, Ferrier highlighted.

RTM attended that conference and saw firsthand the discussion and ideas that were evident further down the supply chain; the April/May 2012 edition of the magazine reported on the event in detail.

Cocks labelled it a “bold step” and added: “There’s an expectation now that that’s going to happen more often.”

The conference was due to be repeated, McLoughlin confirmed.

He reiterated: “The most important thing we have to do is follow that up with action; we’re not just talking the talk; we’re actually doing this stuff as well.”

A kaleidoscope of perspectives

To improve confidence and to have more effective discussions with suppliers, Network Rail has introduced the ‘PRISM’ process. Whilst the title is not actually an acronym, it could be interpreted as a ‘kaleidoscope of perspectives’ on the performance of various projects, attendees suggested.

Prism requires each Network Rail project manager and supplier to sit down together to evaluate and document their respective performances. This can present a clear picture of the areas where performance needs work and exactly why things are going wrong.

Ferrier clarified that Prism also scores and ranks individual projects to celebrate the best and – perhaps more importantly – identify where efforts need to be focused to improve performance, “before it’s too late”.

Making the first move

Discussing the Fair Payment Charter, which requires suppliers to pledge to pay their contractors within 28 days, McLoughlin said: “Someone has to put their hand up and start.”

Network Rail’s top 30 suppliers have signed up to the charter, promising to pay their contractors quickly and efficiently. This would take some time to embed, McLoughlin admitted, and called for the industry to collectively continue to put pressure on suppliers to live up to their word.

He explained: “It’s the start of a fully engaged supply base, a belief from the suppliers that when you say you will do something, you will do it.”

To take the supply chain through this journey, “you have to give something” and in this instance the initiative required Network Rail to make the first move and adjust its payment periods accordingly. The company has now moved to paying suppliers in just 21 days, down from 56 – leaving suppliers seven working days to move the money on down the supply chain to comply with the Charter.

McLoughlin said: “We’re moving into an environment where all of that is possible, right now. We’ve got a great chance of grasping that and making the best of it and making this industry the best place that we can for people to work in.”

Tell us what you think – have your say below, or email us directly at opinion@railtechnologymagazine.com

Comments

Chris Williams-Lilley   03/09/2012 at 16:12

Interesting to note the key points coming out of the discussions, were transparency (from both within Network Rail and within the supply chain), ethical business practice (incl. faster payment, sharing ideas etc) and a strong desire for change. From my own experience, I believe that the true extent of change has yet to benefit suppliers further down the supply chain (i.e. Tier 5-10?), as they often are too far removed from where the key decisions are made and struggle to get their voices heard. I hope that the PRISM process will allow that vital interaction to take place; and perhaps encourage fresh ideas, reward innovation and inspire others to take up the challenge.

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