Water & Wastewater Treatment Magazine
Issue link: https://read.utilityweek.co.uk/i/971076
www.wwtonline.co.uk | WWT | MAY 2018 | 31 " The challenges faced by and expecta ons placed on supply chain management have never been greater. There are an increasing number of risks that challenge compliance and reputa on of businesses through new legisla on such as the Modern Slavery Act and GDPR. These areas alter the dynamic for procurement leaders away from seeking to protect the business through contract clauses and into proac ve management of risk and much greater visibility of the opera on of the supply chain. Coupled with this increased need for eff ec ve risk management is the ever increasing need for effi ciency seen through progressively challenging price determina ons, driven by real aff ordability issues for customers. Most organisa ons deliver a signifi cant propor on of their work through third party spend and as a result this effi ciency challenge falls to a great degree on supply chain managers. The levels of effi ciency required mean that innova on both in terms of solu ons delivered and contract models are required. Many organisa ons are looking at tradi onal risk alloca ng contract models and the high overhead that is typically associated and re-evalua ng whether more inter-dependant risk sharing models would represent be er value. Alliances are generally considered to be some of the most mature risk sharing models and a good fi t for delivering complex and high risk infrastructure. Alongside this drive for more sophis cated models is a reversion to more straigh orward contracts for simple works. This move towards a "Tier 2 model" has been increasingly prevalent in the electricity and gas sectors and is now becoming more common in water as the need to fi nd lower overhead delivery routes becomes more pressing. The drive for innova on also requires supply chain managers to consider whether the contract models and arrangements which are established create innova on- ogenic environments or whether they s fl e innova on. To promote innova on, suppliers need early access to risk development and a more embedded working process to gain the insight, data and strategic understanding to drive change. Clients are likely to have to take or at least share delivery risk for suppliers to be truly freed up to innovate and this challenges some of the risk-averse prac ces of u lity clients. The drive for effi ciency also challenges commercial func ons to be agile and responsive to the needs of the business. Access to be er data, whether that is consump on history to aid procurement or contract usage to aid eff ec ve KPI management - can give the opportunity for savings for both the procurer and bidder." w w w . u t i l i t y w e e k l i v e . c o . u k ● The majority of u lity companies see technology changing procurement and that alliances can be eff ec ve ● 57.8 per cent feel technology is changing their businesses' approach to procurement ● 52 per cent feel alliances are the most eff ec ve and effi cient approach to the delivery of major capital programmes ● 45.4 per cent expect supply chain partners to have a much more ac ve role in infrastructure management and opera on in fi ve years' me, while water/network operators focus on data management ● 43.8 per cent said their businesses' supply chain arrangements allow it to be open to disrup ve innova on KEY FINDINGS Disrup on and the supply chain: the results and why they ma er Andy Clark, Head of procurement and contract management, Yorkshire Water I N A S S O C I A T I O N W I T H www.wwtonline.co.uk | WWT | MAY 2018 | 31