Network Rail has published its plan of action for working more effectively and closely with small and medium enterprises (SMEs). The plan also considers how Network Rail will achieve the government’s target of 33% of its annual expenditure to be spent via SMEs by 2022.
Alongside the SME action plan, a new commercial and procurement structure is in place at Network Rail since November last year (2019) as part of Putting Passengers First: five regional commercial and procurement teams are supported by a central team in Route Services. Network Rail say this means there is greater alignment over commercial categories, a consistent approach and empowerment of the regional teams that will lead to better visibility of the work bank.
During the 2018/19 financial year Network Rail contracted directly with 4,000 suppliers; 71% of these were small to medium sized enterprises, and Network Rail has increased its annual expenditure with SMEs by 5% in the last three years, to 30%.
Network Rail says it recognises the importance of SMEs to Britain’s local communities and economy, with SMEs providing around 16 million jobs nationwide. It says its new action plan is designed to create a more mutually beneficial partnership, with Network Rail benefiting from the business community’s adaptability and innovation.
The plan focuses on six areas of improvement: engagement, pre-procurement, procurement, contract management, supplier management and innovation.
This is in response to feedback from focus groups with SMEs and engagement with working groups including the Rail Industry Association (RIA), Railway Industry Contractors Association (RICA), the Civil Engineering Contractors Association (CECA), the Rail Safety & Standards Board (RSSB), Midlands Rail Forum (MRF), the Department for Transport (DfT) and the Department for Business, Energy & Industrial Strategy (BEIS). As well as continued working and focus groups, there will be future ‘Meet the Buyers’ events to increase face-to-face discussions with suppliers.
Ken Blackley, commercial director at Network Rail, has been appointed as a central SME champion at Network Rail, and regional SME champions are also being appointed.
Blackley said: “The SME action plan is an excellent opportunity to build on what we’ve learnt from speaking to businesses in our supply chain and listening when they tell us we haven’t always got it right. The steps we are taking will make us easier to do business with, from simplifying our processes and providing clarity on what we want from suppliers, to better supplier management, clearer sourcing pipelines and a move away from zero-value frameworks.”