Industry

01 APR 2022

DISRUPTION IS THE MOTHER OF INVENTION WHEN IT COMES TO PROJECT DELIVERY

A perfect storm of challenges is forcing clients, contractors and materials suppliers to reconsider how they best deliver the UK’s infrastructure programmes, says Tarmac’s Andrew Rowley.

The climate emergency, material and resource availability, changing energy costs and a need to maintain programme. This perfect storm is shaping the delivery of many UK infrastructure programmes and the challenge now for clients, contractors and materials suppliers is how to adopt change that can be positive. 

Some people say that disruption is the mother of invention. The good news is that there are some excellent examples of client leadership, collaborative delivery and enhanced performance across the supply chain.  

Equally, there is also scope to make these exemplar standards and behaviours the norm across all programmes. Some areas of UK infrastructure could start thinking more about how they engage and collaborate with the materials supply chain in terms of procurement and their sourcing requirements. Here are some reflections and recommendations to help drive enhanced performance.   

Firstly, materials are no longer commodity products readily available on-demand and therefore procurement decisions for some major programmes should no longer be driven solely by price. 

The long-term security of materials supply is integral to programme and the critical path. There are many clients and contractors who fully understand this, and they are delivering new supply chain strategies, forging new relationships and agreeing enlightened trading terms with suppliers. However, there are others in the market who are still operating on an outdated model where they work in the belief there is always a better deal out there. 

Positively, exemplar programmes have also recast procurement to consider the climate emergency and the transition to net zero. We are now seeing that the lowest carbon solution is sometimes more important than price. 

The drive for material certainty from major programmes must also deliver low carbon benefits. Some clients now genuinely have a greater forensic environmental focus on where their materials come from, as well as a careful consideration of how multi model logistics can deliver even greater carbon savings. Taking this approach will also stand clients and the supply chain in good stead when it comes to net zero. 

Delivering supply certainty must also come with an acceptance that input costs for energy, haulage and the carbon price are ever changing. Thinking long term, collaborative partnerships with client and contractors need to consider cost mechanisms that provide suppliers with a way of reflecting a changing macro-economic backdrop. Equally, this demands transparency from both sides.

For clients in the industry, I would suggest that it’s time to be clear about the pipeline and the long-term opportunities ahead. Again, enlightened clients and contractors are investing in their industrial strategies and are being proactive in wanting to understand the supply chain, its challenges and how it can drive innovation. There is undoubtedly scope in the marketplace to do more. 

In exchange, material suppliers must help deliver enhanced supply chain performance. We need to go ‘above and beyond’ as a standard. That’s a significant cultural and behavioural shift for a construction industry that has a habit of accepting mediocre performance. 

While we are all operating against a perfect storm of challenges, this is also a time of opportunity for UK infrastructure. We need to navigate the transition to net zero, understand that input prices are volatile, resources – both in terms of people and materials – are in demand, while simultaneously keeping committed projects and investment on track. 

The best possible outcome is one where genuine collaboration models become the norm to deliver stronger trading partnerships that pave the way for further innovation.

Andrew Rowley is the national commercial director at Tarmac.

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