Infrastructure projects need early supply chain collaboration

1 September 2011

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1 September 2011 | Adam Leach

Involving the supply chain at an early stage is “at the heart of what is required” to improve UK infrastructure projects.

Research carried out by the Department forBusiness, Innovation & Skills (BIS) found that earlier engagement between the private sector contractors, suppliers and public sector clients - by outlining future plans and setting up cross-sector working groups - is needed to improve the process for carrying out infrastructure projects in the UK.

Infrastructureand supply chains: barriers and opportunities, published this week, concluded: “The emphasis on transparency and certainty as well as whole life outcomes and earlier supply chain involvement go to the heart of what is required.”

The report - which make recommendations for improvements to current policy, but does not have to be taken on board by the government - highlighted a number of problems with current strategy. Describing current contracts as “short-term”, it called for government to inform companies of the long-term plans and use more outcome-based criteria.

In order to stimulate innovation, it cited the need for greater expertise in procuring organisations and to change the low-risk culture so that more innovative solutions could be identified when available.

The report said: “Even where there is expertise, procuring organisations will tend to opt for the low risk option, thereby choosing existing suppliers and hindering the emergence of more innovative ideas.”

Other issues raised in the report included:

• Private sector identified the need for the Green Investment Bank, which will provide public sector investment in sustainable business and technology, to be established immediately to motivate investment in more innovative technologies. Currently it won’t be fully implemented until 2015.

• Suppliers in the rail industry called better demand management and less red tape in the purchase of rolling stock.

Back in July, Cabinet Office minister Francis Maude stressed the need for public sector buyers to make themselves aware of the innovative solutions offered by small and medium enterprises (SMEs).

Speaking at the Innovation Launch Pad event, which put SMEs in front of public purchasers, he said: “We as buyers need to be up-to-speed with the innovative solutions out there. There’s been good progress so far but not enough.”

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