Using collaborative supply chain accreditation to drive responsible sourcing objectives

Transcription

1 services for professional procurement be better informed, make better decisions Using collaborative supply chain accreditation to drive responsible sourcing objectives

2 Where BuildingConfidence began... In Suppliers were sent prequalification questionnaires (PQQ) by every project, information was not shared Focus on safety only sustainability not considered Supplier selection was largely a tick-box exercise driven by process, not risk managed by projects not centrally Suppliers selected mainly on price and time drivers commercial focus The highest spend on suppliers was spent with the lowest performers Average performance was 59% in top 150 Mediocre supplier performance continued as a result, with little understanding of true risks Lend Lease went into partnership with Achilles to build a new accreditation service 2

3 Background BuildingConfidence launched 2007 to manage accreditation and risk management of suppliers Sustainability at the core of the accreditation process Driven by corporate governance, legal compliance, best practice/innovation & clients! Drive supply chain improvement not just compliance Collaborative approach Open to other major buyer construction firms contractors, suppliers and clients Cost efficiency of shared common process buyers and suppliers 18 major construction firms & c2,000 suppliers

4 Overview Process Output Online PQQ 1 or 2 day onsite audit (high risk) desktop audit (medium risk) Protocols for contractors, manufacturers, materials providers and consultants/designers Pass/fail based on risk & compliance Star rating to drive continual improvement & recognise best practice Risk management process for buyers, business improvement & education process for suppliers Application Pre-contract award in procurement process Risk management throughout contract period

5 Sustainability Content Environmental Social Recyclability and recycled content Greenhouse gas emissions Water use Transport impacts Biodiversity Waste management Safe and healthy working conditions Slave/child labour Fair wages Working hours and holidays Equality Skills and training Community relations Economic Ethical business practice Contribution to diversity and stability of local economy Long-term financial viability (From BS 8902: 2009) 5

6 Legislation & Best Practice Drivers Health & Safety at Work Act etc 1974 Environmental Protection Act 1990 Immigration, Asylum & Nationality Act 2006 Bribery Act 2010 Equality Act 2010 Enterprise Act 2002 Carbon Reduction Commitment 2009 Integrated Pollution Prevention and Control Directive (IPPC) 2008 Corporate Manslaughter and Corporate Homicide Act 2007 Employment Relations Act 1999 Construction (Design and Management) Regulations 2007 Protective Equipment at Work Regulations 1992 Working Time Regulations 1998 First Aid at Work Regulations 1981 Reporting of Injuries, Diseases, Dangerous Occurrences Regulations 1995 Control of Vibration at Work Regulations 2005 Control of Substances Hazardous to Health 2005 Site Waste Management Plan Regulations 2008 Environmental (Duty of Care) Regulations 1991 The List of Wastes Regulations 2005 Provision and Use of Work Equipment Regulation 1998 Lifting and Other Lifting Equipment Regulations 1998 Town and Country Planning (Environmental Impact Assessment) Regulations 1999 Environmental Noise Regulations 2010 Noise at Work Regulations 2005 Hazardous Waste Regulations 2005 Management of Health Safety (at Work) Regulations 1999 Work at Height Regulations 2005 Confined Spaces Regulations 1997 Producer Responsibility Obligations (Packaging Waste) Regulations 2007 The Safety Representatives and Safety Committees Regulations 1977 ISO 9001 (2008) Quality Management Requirements ISO (2004) Environmental Management Systems OHSAS (2007) Occupational Health & Safety Management Systems ISO Information Security Management Systems (2005) Forest Stewardship Council (FSC) Sustainable Timber Chain of Custody Strategic Forum for Construction s Health & Safety Code Constructing Excellence Constructing Excellence Requirements (Chapters 1-6) BS EN 365: Fall Arrest & Fall Prevention Equipment HSG - Guide to measuring health and safety performance BS Environmental Management Work Book HSG 61 Health Surveillance at Work Considerate Constructors Requirements BRE Environmental Assessment Method BREEAM BS Business Continuity Management BES 6001 Responsible Sourcing of Construction Materials SA8000 Social Accountability ISO14064 GHG Emissions Achilles Group Limited 6

7 Some Associations & Key Influences Achilles Group Limited 7

8 Sustainable Procurement: Building a competent supply chain Nick Baker Procurement Manager, Skanska UK November 2012

9 Skanska global supply chain Latin USA 8.8b (2011) 80% of Skanska Revenue USA Sweden Norway UK 1.2 Billion spend 6,550 suppliers 83% of UK Revenue UK Czech Poland Finland

10 Why? 1.Stakeholder requirements 2.Supports our values & goals 3.Business priority

11 Why? 1. Stakeholder requirements Skanska is determined to be the leading ethical and green project developer and contractor Johan Karlström, President and CEO, Skanska AB The demand is in the market place and we believe it is a great business opportunity, right for the planet and attractive for our people.

12 Why? 2. Supporting our values and goals

13 Why? 3. Business priority Sustainable procurement within Skanska contributes to the successful winning and execution of profitable projects Mike Putnam, President and CEO, Skanska UK In the UK we spend over 80% of our revenues with our supply chain. To be a leader in safety, green and ethics we need a supply chain that is safe, green and ethical.. Full Stop!

14 Why? Our licence to operate To win work To manage risk To attract stakeholders

15 How? 1.Set the standard 2.Transformation programme 3.Align supply chain

16 Skanska Sustainability Agenda

17 Vanilla: Construction progress or product performance is compliance with law, regulations, codes and standards Green: Construction process or product performance is beyond compliance, but not yet at a point were what we construct and how we construct it can be considered to have near-zero impact Deep Green: Construction process or product performance is future proofed - for example, it consumes zero net energy and produces zero waste Our Journey to Deep Green

18 1. Set the standard Code of conduct Policy Embed

19 Sustainable procurement Meeting our customer requirements by the value for money sourcing of products and services taking into account environmental, social and ethical aspects over the whole product or service lifecycle.

20 Agreeing to the principles of our Code of Conduct and Sustainable Procurement policies is an absolute requirement when working with Skanska.

21 2. Transformation programme

22 Transformation People + Organisation Process + Systems Performance Business Relationships Good to great External Accreditation Sustainable Procurement Professional recognition Supply Chain Management E commerce Cost saving Margin growth Vision To be recognised as the leading construction procurer in the UK by our: Procurement people. Attracting, developing and retaining the very best people Project teams. Who want us as a key member of the team delivering excellent service, value and expertise Customers. Who want to use us due to our leadership in sustainable procurement Supply chain. The best suppliers and subcontractors wanting to work with us to deliver safe, green, ethical and best value innovative solutions Peers. Who see us as the benchmark to aspire to and who to partner with Opinion formers. Influencing future best practice / legislation and to be seen as a leader and responsible corporate citizen Making a significant contribution to Skanska UK profitability. To enable us to become the leading UK contractor To enable us to become the most valued member of the Skanska family. 22

23 3. Align supply chain Part of selection process Portfolio Manager during delivery

24 Improving supply chain performance 1. Prequalification 2. Selection 3. Management 4. Review Suppliers and subcontractors approved before use Key suppliers and higher risk trades audited before use Regular reassessment Supply chain selected using a balanced score card Past performance has a significant weighting Adoption of IFE & Green principles influences selection Pre-start meetings (project specific capability, capacity and competence) Induction (rules, behaviours and skills assessment) Supervision (responsibilities, cooperation and coordination) Measure supply chain performance (360 o ) Review performance with supply chain and agree action plans to reward or improve Feedback into future selection

25 Skanska Accreditation Levels Accreditation Level Accreditation Process Type of Accreditation Risk Annual Spend ( ) Comment 5 BC Level 5 2 day Audit High High Any trade 4 BC Level 4 (or UVDB Verify or Link- up audit) 3 Skanska E- PQQ + Internal audit 2 Skanska E- PQQ (or UVDB or Link- up) 1 Expired E- PQQ (or BC / UVDB PQQ or Audit or Link- Up PQQ / Audit) 0 No PQQ in place 1 day Audit High Medium Any trade (T/O less than 5m) Desktop + Skanska Audit Medium Medium Desktop Low Medium Inc SRW pre- let assessment and PQQ Lite N/A Minor Medium E- PQQ s over 2 years old or 1 year for BC / UVDB / Link- Up. Includes referred or expired BC / UVDB / Link- up audits N/A Minor Low Includes failed BC / UVDB / Link- up audits

26 Building Confidence Statistics Number of Supplier Actively Nominated 220 Total % of Supply Chain on BC 58% % Shared 40% Going forward - Improving compliance - Looking at the next tiers of the supply chain - Review of internal PQQ

27 70 Risk Improvement (Yr 1 - Yr 4) Year 4 A3 Year 4 A2 Year 4 A1 Year 1 A3 Year 1 A2 Year 1 A

28 35 Star Ratings Breakdown (24%) 27 (23%) (21%) No. of suppliers (10%) 18 (15%) Number of suppliers 10 9 (8%) Stars 1 Star 2 Stars 3 Stars 4 Stars 5 Stars

29 Thank you

30 Using collaborative supply chain accreditation to drive responsible sourcing objectives Jonathan Larter Senior Manager, Procurement

31 Introduction to Tarmac Aggregates Asphalt Ready mixed concrete Cement Lime Tarmac National Contracting 31

32 A responsible business Our Sustainability Framework RESPONSIBLE SOURCING ENERGY MANAGEMENT ENVIRONMENTAL PROTECTION BUSINESS PERFORMANCE PRODUCT QUALITY MANAGEMENT GREENHOUSE GAS MANAGEMENT EFFICIENT USE OF NATURAL RESOURCES HEALTH AND SAFETY SUSTAINABLE PRODUCT PERFORMANCE BE A RESPONSIBLE AND ETHICAL BUSINESS STAKEHOLDER ENGAGEMENT 32

33 Managing our supply chain We spend 750m p/a procuring goods and services Responsible procurement BES 6001 Reducing risk for customers Ethical Reputation Information and evidence Checking and audit 33

34 Collaborative accreditation Why BuildingConfidence through Achilles? A comprehensive scheme Aligns with our framework approach Gives us greater intelligence across our supply chain Competence and risk management Helps to align with our key customers It works for us 34

35 Implementation and engaging the supply chain Support from CEO and the Tarmac Board Support from key stakeholders both internally and externally Clear communication of requirements to suppliers Formal audit for Tier 1 and 2 by Building Confidence is a Condition of Contract Tarmac and Building Confidence provide support to supply chain improvement plans 35

36 Appropriate segregation of our supply chain Risk based approach high risk / high spend LEVEL 4 or 5 LEVEL 2 or 3 LEVEL 3 or 4 A.T Kearney The Purchasing Chessboard 36

37 Great progress to date Over 50 Tier 1 and Tier 2 suppliers have now registered and been through a Level 4/5 auditing process. This represents 50% of our spend. By the end of 2013 we aim to have 85% of our supply chain via Building Confidence levels 3 to 5 (JV dependant) By the end of 2014 all of our suppliers will require BuildingConfidence to trade with Tarmac - Standardisation of tendering, saves time/effort - We now know our supply risks, actions plans in place - Tracking progress online - Increasing the standards for our industry - New suppliers introduced - Our customers have confidence in us 37

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39 Next Steps for BuildingConfidence Continue to... expand the collaborative network major contractors, materials providers and clients work with key industry best practice bodies & standards BES6001, Supply Chain Sustainability School improve the accreditation process & standard supported by empirical evidence Achilles Group Limited 39