Switching to a single roofing manufacturer has cut millions from the cost of fixing leaks, the head of supply chain at Willmott Dixon has revealed.
Although moving to a single supplier could add around 10-15% to the price of materials, the amount the construction firm spends on fixing defects has already fallen from around £3.5m a year to just £1m, said Stephen Watson, national supply chain director.
The change is part of a larger supply chain strategy, Better Together, that has resulted in the launch of a new partner framework that is working towards Willmott Dixon working closer with fewer suppliers, Watson told SM.
“As a business we’ve gone about quite a lot of change in terms of our strategy and our focus,” said Watson. In 2016 the firm’s chief operating office, John Waterman, released a business strategy that focused on quality and customers. Watson’s response was to develop his Better Together strategy, aligning the supply chain with the new business objectives.
“Better Together is all about working with our supply chain better, making sure that they feel part of our business and that we select our supply chain based on their values and beliefs, attitudes and behaviours rather than just expertise,” he said.
Consolidation is also part of the plan, with the aim to reduce the number of suppliers by 10% year-on-year until there are around three partners per trade area, depending on the needs of each region, said Watson. “We actually would like to get to the position where we can go one on one with our supply chain,” he said. However for now most customers still ask for at least three quotes on work.
Having a small number of trusted suppliers has benefits, said Watson. Standardising products, for example roofing, has meant lessons learned on one project can easily be transferred to the next, speeding up processes and reducing defects. It has also saved surveyors’ time by making it easier to place orders and reducing the need to call suppliers back or charge them for poor performance.
Willmott Dixon now only has one paint supplier, one sanitary wares supplier, one carpet manufacturer, one ceiling manufacture and one lighting manufacturer.
Suveyors initially pushed back on the consolidation, said Watson. “They’re there to save money and they don’t like having decisions taken out of their hands,” he said. “But when they’ve realised this bigger picture – we are saving money but in other ways – then they actually start to come on board. We got them on board by relentlessly communicating our ‘why’.
“What we’ve come to understand as a business is the fact that everyone thinks differently, you’ve got people who think very much about facts and others who feel more emotionally about things, so it’s making sure that in the sell we covered all those things that are important to people and how the relate to how they think.”
There was also campaign to change the culture and build trust on both sides. It started with changing the language, said Watson. Subcontractors or “subbies” became “works partners”, and suppliers became “goods partners”, he said.
“We want there to be no difference between our people and our supply chain. If our customers meet our supply chain or a Willmott Dixon person, they can’t tell the difference between the two of us.”
They also installed supplier hot desks in the regional offices – which are now always full, said Watson – and created Better Together academies where the firm and its suppliers can find collaborative fixes to recurring problems. “Sending an email with an attachment that says, ‘Do this on Monday’, is completely unfair. Now we invite them in for a day and say, ‘What is it we need to do and how do we learn?’”
The ultimate aim of all this work is to be able to hand over buildings that are 100% defect free. “We’re an industry that rushes to practical completion,” said Watson. “Could you imagine buying a brand new Audi and turning up to the garage and they say, ‘That little scratch there, don’t worry we’ll be out in three weeks to repaint it for you.’ It’s just not right.”
☛ Want to stay up to date with the news? Sign up to our daily bulletin.