Surrey County Council set up a supply chain framework alliance with Kier and supply chain members Aggregate Industries and Marshall Surfacing to create an integrated team for a five year £100m programme of capital highways and repair works.
Adopting ESI through Supply Chain Collaboration created a culture of collaborative working at all levels of the supply chain and led to agreed savings in excess of 12% sustained over a period of five years in exchange for:
■ Visibility and continuity of pipeline of work through larger scale, longer term call-off appointments (5%)
■ Advance planning of work on each annual cycle (2%)
■ Prompt payment of Marshall Surfacing and Aggregate Industries by Kier (1%)
■ Closer involvement in design and planning (2%)
■ Availability of storage facilities in Surrey depots (2%).
Agreed qualitative benefits from Supply Chain Collaboration comprised:
■ Improved whole life value, including a ten-year warranty for material and pavement design
■ Improved quality control through joint risk assessments, agreement of appropriate surface treatments and joint monitoring of work on site
■ Improved apprenticeship commitments by Kier, Marshall Surfacing and Aggregate Industries, supplementing employment and skills commitments already agreed by Surrey and Kier in accordance with the CITB Client-Based Approach
■ Lean programming of individual tasks leading to time savings
■ Innovation through collaborative working, for example to increase recycling and reduce landfill.
Analysis of work on site showed no major remedial work required, no major health and safety incidents and improvements to drainage systems and footways as part of the agreed design solutions. Surrey Highways received over 100 complimentary letters from residents and Council members, having never received any before.
Surrey and Kier then agreed to extend their highways maintenance contract, subject to Kier re-procuring its supply chain in order to deliver the strategic goals of:
■ Increasing collaboration between Surrey, Kier and the supply chain
■ Achieving the objectives of the Surrey Business Plan
■ Demonstrating value for money, targeting a 2.5% saving
■ Developing a sustainable supply chain through to 2021.
Kier created an FAC-1 supply chain framework alliance with tier 2 and 3 supply chain members in each work type committed to:
■ Adopting and participating in ESI with an agreed target of 90% of all projects
■ Sharing and/or improving working practices for the benefit of Surrey and the programme
■ Implementing social value proposals.
The supply chain framework alliance agreed savings of 8% against prices under the previous contract model plus turnover-dependant supply chain social value that included (i) local supply chains, (ii) increased spend with local suppliers, (iii) local employment/skills development opportunities and (iv) local recruitment.