Delivering a step change in efficiency for Network Rail
Efficio helped Network Rail to design and implement an accelerated sourcing and delivery process for its National Level Crossing Harm Reduction Program
The project was chosen as a pilot to develop and test a new approach to the procurement and delivery of lower-cost, high-volume capital projects, which account for 80% of the total volume of capital projects. The strategy Efficio developed and implemented reduced like-for-like costs by 30%, stretching the budget to build up to 60% more bridges, and accelerating program delivery from four years to two and a half.
Network Rail is Europe’s largest deliverer of continuous infrastructure expenditure, spending over $7bn every year, renewing and enhancing the UK’s rail infrastructure. They operate in a very challenging environment, delivering hundreds of capital projects every day across a 15,000 kilometer live train network. With over 1.5 billion journeys annually, Network Rail runs 20% more train services than France, 60% more than Italy, and more than Spain, Switzerland, The Netherlands, Portugal and Norway combined.
Making the railways safer is Network Rail’s number one objective. The National Level Crossing (NLX) Harm Reduction Program was launched in 2011 to accelerate safety improvements to level crossings through improved barrier protection and the erection of footbridges. Since 2011, the program has reduced public harm by 26%, but with thousands of crossings in the UK, the client needed to find a step change in delivery efficiency – simply build more bridges, faster, for less money – to accelerate the program and save more lives within the budget allocated by the Office of Rail Regulation (ORR).
In November 2012, Efficio was engaged to design and implement an accelerated sourcing and delivery process for the NLX Footbridge program. The project was chosen as a pilot to develop and test a new approach to the procurement and delivery of lower-cost, high-volume capital projects, which account for 80% of the total volume of capital projects – hundreds of schemes every year, renewing embankments, tunnels, stations and platforms.
A joint Efficio/Network Rail cross-functional team was formed to interview stakeholders, gather data and conduct value-discovery workshops with Tier 1 (Construction) and Tier 2 (Bridge Manufacture) suppliers. This team was able to:
- Source and deliver the four year footbridge replacement programme as a single-delivery program, sourced in one competitive tender, bundling contractor design, build and install
- Build innovation into specification and ITT strategies by running strategy workshops with contractors and manufacturers
- Appoint a single construction contractor to spread overhead across multiple schemes, while optimizing plant, labor and materials
- Contract directly with bridge manufacturers, offering the entire four year volume to maximize leverage and enable significant manufacturing and design efficiencies
- Introduce Efficio’s powerful automated tender consolidation tools to create a more efficient tender evaluation process, providing more time for negotiation and a rich fact base due to the detailed cost breakdown structure of the tender
- Conduct competitive value-engineering as part of the tender process to lock-in identified innovations and create a standardized, modular bridge design
- Build a total cost of ownership model to ensure the best “whole life cost” is considered in making the award decision
- Create a co-located integrated Network Rail / contractor program management team to improve communication
Efficio helped us make a step change in our NLX Footbridge program - proving that smart sourcing can help save lives. Efficio proved they could successfully challenge our thinking, and deploy innovative tools and techniques to identify the root-cause of problems and run powerful procurement events - the results speak for themselves. They are a good example of consultants making a real difference.
Efficio’s engagement helped deliver a number of significant benefits for Network Rail including:
- Reduced like-for-like costs by 30%
- Created potential 60% increase in the number of bridges planned in original budget due to lower costs
- Delivered program in two and a half years versus the four years originally planned
- Innovation- best technical innovations adopted a thorough, rigorous, value engineering process – this innovation pipeline is expected to reduce bridge cost by a further 10-15%
- Reduced bridge manufacturing lead time by 40% due to forward program visibility and modular production
- Major reduction in workload for NR and supplier tender resources (i.e. number of tenders reduced from c. 40 to two– saving over 6,000 man-days across Engineering, Project and Commercial staff)