When it rains more than 39.5m cubic metres of sewage is discharged from London’s Victorian structures into the River Thames ©PA Images
When it rains more than 39.5m cubic metres of sewage is discharged from London’s Victorian structures into the River Thames ©PA Images

How I buy indirects for London's new Tideway super-sewer

3 February 2017

The head of indirect procurement for London’s Tideway super-sewer has described how she was faced with a "greenfield landscape" when she joined the project two years ago.

Morag Powney, indirect supply chain manager at Bazalgette Tunnel Limited (BTL), was brought on board to take care of the procurement of things including archaeological and marine surveys and health and safety training, but there was no formal structure in place.

“There was a greenfield landscape in terms of the indirect procurement and how to set up the team structure,” she told SM.

“This is a start-up business… There were obviously procurement people there but there was no proper structure.”

Tideway is a scheme that will see a new 25km sewer built under the River Thames to relieve London's overflowing Victorian drains. Powney joined BTL after it received its licence, or permission, to build from the regulator Ofwat. 

Her first job was to analyse Tideway’s corporate services legacy spend – the money it spent before it was awarded the licence to build. She then looked at forecasted spend and the volume of future contracts and procurements required across the business. 

“This resulted in my recommendation to senior management to implement a category management structure across the corporate services piece,” Powney said.

Her team of six category leads works across information services, finance and regulations, HR and project-wide services, property and facilities, external affairs and asset management, and health, safety and wellbeing. She also has a dedicated procurement administrator.

The team has forecast savings of £4.1m since August 2015, when BTL got its licence, on an annual spend of £35m. This has been achieved by making spend more visible and rationalising Tideway's supplier base, a process that is continuing.

The project is expected to have a whole-life cost of £4.1bn and is one of Europe’s biggest infrastructure projects. Tunnelling is due to begin next year with a finish date in 2024.

Procurement for construction works is the responsibility of the three consortiums that have been contracted by BTL, each of which is working on a section of the sewer. Powney and her team handle the corporate services across all the work teams.

Powney said on the whole her stakeholders, mostly budget holders and department heads, were receptive to the introduction of category management. “It gives a partnership approach,” she said. The relationships with stakeholders were there before, “but not as prevalent as with category management, where they’ve got a direct category lead in each area”.

Currently when it rains more than 39.5m cubic metres of sewage is discharged from overflow pipes into the River Thames. The Tideway tunnel is expected to reduce this to less than 2.4m.

“We have a fairly typical professional services footprint in terms of what we buy, as well as the supporting services you’d expect within a head office corporate services function,” she said. “Things that are more unique to the project would be land referencing professional services, archaeological services, an independent technical advisor and quite an unusual one was aquatic ecology research.”

She and her team work from Tideway’s open-plan office near Paddington station. Powney’s team sits metres away from the CEO’s desk and are easily accessible to all the departments. The office has a relaxed atmosphere, said Powney, which helped institute the category management system. “People are friendly and approachable,” she said.

With all large infrastructure projects, one of the challenges was finding the balance between cost, scheduling and quality, said Powney. Any delayed critical procurements can have a knock-on effect. “Obviously the suppliers will have a mobilisation time, but it’s down to us to get our planning right to give us enough time to go to the market,” she said.

BTL also works in a heavily regulated environment because it is a water infrastructure project.

“Planning in anything is key, and that’s where the category management methodology helps. You can sit with the budget owners, get to know their budgeting process, get to know what’s coming in our pipeline. And that really helps.”

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