In an article published in Utility Week, Ian Bolger, Vice President at Efficio explains why procurement must be given thorough consideration by water company alliances.
As the alliance delivery model becomes more prevalent across the utility and wider infrastructure sector, some alliances are clearly struggling to make the required upgrade in procurement orientation from tactical (buying for individual projects) to strategic (optimising the supply base for the entire programme). This is not surprising. Merging three or four companies that were – and still are – intense competitors to deliver a large and demanding infrastructure programme inevitably raises significant challenges.
It is crucial that the alliance has a clear supply chain strategy aligned to the overall alliance and client goals. It also needs to select a set of best practice supply chain processes, supported by effective systems and strategic sourcing tools – often easier said than done. Most alliances end up blending parts of processes used by partner companies and
rely on systems that produce little meaningful data.
Many construction companies and, by default, alliances, have significant resource gaps in strategic sourcing and category management, largely due to lack of strategic alignment and ineffective processes, tools and systems. These issues are not exclusive to construction companies, but the impact is greater among alliances where teams from different companies fuse together rapidly to source large programmes of work under pressure from project delivery teams.
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