Sir Roy McNulty’s recently published review of Britain’s railways lists 10 main barriers to efficiency in the industry and makes recommendations to deliver savings of £1 billion a year by 2019. In asserting that ticket prices are “already too high”, the report highlights the need for the industry to offer greater value to the travelling public and a 30 per cent efficiency improvement target has been presented as the way to achieving this aim.
Making savings of this magnitude will require the rail industry to work far more collaboratively and much smarter. In procurement, an initiative is underway to reshape the way buyers and suppliers work on pre-qualification and tendering processes. The governance for the industry’s supplier qualification scheme, Link-up, has changed to make it accessible to the whole industry on a collaborative basis – creating a scheme that will be “by the industry, for the industry”.
Buyers and suppliers now have a unique opportunity to engage in the newly formed steering committee - chaired by Richard Sharp of J Murphy & Sons and facilitated by Achilles - to influence the way suppliers are pre-qualified and audit protocols for the industry are formulated. By working together, the systems in place can be further developed to meet the needs of the entire industry and to facilitate the easy exchange of all supplier and audit information, so making pre-qualification for tenders a simple matter of referring to a single source of verified information.
Although Link-up has been established for many years, with origins in the state-run British Rail, the scheme is in the midst of a transformation that will create the more collaborative format common to other successful schemes run by Achilles in the utilities, oil and gas, and construction sectors. With the strong support of Network Rail for this initiative, Link-up will become an open scheme more closely aligned to the needs of all members of the rail industry.
In many respects, buyers will have to change too. Attitudes and practices in the sector have tended to diverge through a lack of communication and collaboration. Far too many buyers, despite being members of Link-up, send out their own pre-qualification questionnaires for tenders, rather than taking advantage of the up-to-date and verified information that is already easily available through the scheme. Work for the buyer, too, becomes unnecessarily tiresome in compiling and analysing the completed and returned spreadsheets of unverified material.
Inefficiencies of this nature will need to be removed if the government’s target of a 30 per cent reduction in costs is to be achieved. The way forward for improvement in rail industry procurement is to open up the governance of Link-up to all and to make collaboration work. Only then will attitudes and practices change. Besides other areas of improvement, there is room to closer align and recognise the different audit programmes – focusing the audit programmes on specific elements of risk and removing duplication between programmes.
Looking to the future, the industry has the potential in Link-up to take a great leap forward in its move towards embracing CSR issues and incorporating environmental ‘best practice’ into the working practices of a modern rail industry. The complexity and futility of individual organisations battling with these issues makes little sense. The open and collaborative nature of the transformed Link-up scheme provides the perfect forum for defining a joint approach towards raising the CSR performance and helping the rail industry to promote itself as the environmentally friendly way to travel.
Buyers and suppliers to the rail industry have an opportunity to get involved, to shape procurement for the benefit of the whole sector and to make rail procurement fast, efficient, and cost-effective. The opportunity is there for the taking.
* Annette Poehl is director rail and transport at Achilles