Thames Water went to Estonia in search of a new supplier after becoming disillusioned with a monopoly in the UK.
Tessa Fayers, head of managed procurement services at the water company, told a conference the company “found a new supplier in Estonia to replace one in the UK which was charging a lot of money”.
Speaking at Procurex South in London, Fayers said the example demonstrated the innovative approach they took to procurement.
“We are looking for suppliers with an innovative culture,” she said. “If they haven’t got an innovative culture, they are not going to bring us innovation.”
Fayers said Thames Water had a procurement spend of £1.5 billion and the supply chain had a “crucial role” in business improvement.
However, she said the company had a reputational problem with suppliers, which they were working to change. “Thames did not have the best reputation for dealing with its supply chain. We had to look hard at what we were doing,” she said.
Fayers said they invested in pre-procurement and contract management. “We are starting to build good relationships with suppliers,” she said. “Where we are building those relationships, they are helping us achieve better value in the contracts we have today.”
Fayers said a chemical supplier went around Thames Water’s sites to identify areas where operations could be optimised, reducing the cost of chemicals by £1 million a year. “Why would they do that if they are losing revenue? But they are a better supplier for Thames,” she said, adding this would be taken into account when the contract came up for renewal.
Fayers works for Efficio, who took on Thames Water’s procurement in an outsourcing deal in 2011.
“Over the past three years we have managed that transformation, to take it from something that was really good to incrementally improve it,” she said.