Strategic relationship management should reach beyond the framework provider, clients, manager and suppliers and should include tier 2 and 3 supplier chain members. Although relationships with subcontracted supply chain members are managed primarily by framework suppliers, strategic supply chain relationships can also be supported through collaborative initiatives led by framework providers.
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The Southern Construction Framework reports that 'Framework managers and contractors have jointly made decisions around Employment and Skills, Health and Safety Sustainability, and Supply Chain. Some of these such as Supply Chain have proved to be difficult conversations due to the commercial sensitivity to the contractors. For example, contractors consider their supply chains unique to them, and their commercial advantage. We were able to carry out a review with them of all sub - contractors used across the framework, and to openly discuss which of these could be exposed to over-use. The results surprised our contractors and led to the establishment of the supply chain portal, so that there is even more visibility of the package procurement process, as well as much better pipeline and opportunity visibility for the supply chain.' |
Where the framework provider, clients, manager and suppliers see the potential to improve value by formalising strategic supply chain relationships, they can agree to implement the ESI processes of Supply Chain Collaboration described in Sections 7 and 13 and in Annex 5.
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Recommendation 23: Improve framework outcomes by creating collaborative systems for the management of framework relationships and strategic supply chain relationships To drive improved framework outcomes through clear mutual understanding, effective problem-solving and dispute avoidance, this review recommends that framework providers, clients and managers create collaborative systems for managing framework relationships and that these are mirrored by suppliers in strategic supply chain relationships. These systems should include a 'Core Group' or equivalent joint decision-making group through which to manage strategic planning, value improvement, risk reduction and dispute avoidance. |
Specific actions include:
Framework strategy
■ Engage with the market and senior internal stakeholders to understand what type of relationships may be most appropriate for the proposed framework programme.
■ Align the evaluation strategy with the intended supplier relationships.
■ Align the framework contract terms with the intended supplier relationships, including risk allocation, liabilities, payment, incentive structures and management processes.
■ Create flexibility in the framework contract to enable the types of relationship to change if required.
Framework procurement
■ State the commitment of the framework provider and clients to strategic supplier relationship management at an organisational and portfolio level.
■ Evaluate supplier proposals to work together with the clients, manager and other suppliers in order to drive mutual understanding, solve problems more effectively and achieve better and faster delivery.
■ Evaluate supplier commitments to implement strategic supply chain relationships.
Framework contract
■ State how the framework provider, clients and manager will act together with suppliers at an organisational and portfolio-level in order to drive mutual understanding, solve problems more effectively and achieve better and faster delivery.
■ Align the contract terms with the intended supplier relationships, including risk allocation, liabilities, payment, incentives and management processes and with the suppliers' commitments to strategic supply chain relationships.
■ State the terms of reference for a framework core group or equivalent joint decision-making group.
■ State the strategic supplier relationship management systems by which the framework provider, clients, manager and suppliers:
■ jointly seek improvement in the value originally agreed and manage value improvement at an executive level
■ undertake joint strategy development, objectives and planning
■ commit to collaborative behaviour and working
■ jointly manage and monitor their relationships
■ jointly manage aggregated performance and risk.