Construction firm to bring more social enterprise into supply chain

3 March 2011
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3 March 2011 | Angeline Albert 

Wates aims to use a social enterprise on all of its future construction projects by building them into its supply chain, as well as offering contracts directly.

Speaking at an event in London yesterday, Wates CEO Paul Drechsler said procurement departments should tap into the long-term value social enterprise businesses can bring. “Companies need to show greater leadership by working with their clients and suppliers to encourage them to incorporate social enterprises within their own supply networks,” he said.  

For the past year it has been trying to incorporate social enterprises into its supply chain to “create a lasting legacy in the communities it works in”, taking the lead from the prime minister’s ‘Big Society'.

One of these, a charity called Green-Works, hires long-term unemployed and homeless people to remove unwanted office furniture from its sites and reuse it elsewhere – either by Wates or another organisation – effectively reducing landfill.

Drechsler suggested buyers follow the group’s example by splitting work into smaller contracts to make it easier for social enterprises to bid. He said they should also use social enterprises to fill “potential gaps in the supply chain” and encourage them to become members of a consortia.                           

By showing flexibility in its procurement, Drechsler said, Wates had been able to offer work to social enterprises as both direct suppliers and as sub-contractors to other vendors. He said strategic suppliers are happy to allow a small portion of a project to be undertaken by a social enterprise if it helps them win business. In 2010, Wates used 38 of these organisations in 60 different projects - about 10 per cent of its work.

Despite the recession, social enterprises saw strong growth in 2010 with a 56 per cent rise in turnover from the previous year compared to 28 per cent for SMEs.

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