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JO HN A DA M S, G R O UP PROC U RE M E N T D I R E C TO R AT BA RRATT D E V E LO P M E N TS E XPLO RE S H OW T H E CO M PANY’S CO MPE TI T I V E E D G E CO M ES FRO M S U PPLY C H A I N C A PA B I LI TY
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n recent years, an increasing number of organisations have begun to recog-
nise supply chain and procurement as a key facet to their operations. As a result, the very perception of supply chain has changed and is now being positioned as a key competitive advantage and in places where it can’t it represents an opportunity for businesses to unlock opportunity and other greater benefits. To put it simply, gone are the days where supply chain simply represented a means of saving money. “Clearly that’s part of what we do, but there’s much more to it than that,” explains John Adams, Group Procurement Director at Barratt Developments Plc. “The business or businesses generally should 4
B A RR AT T D E V E LO PM E N TS
see it as a strategic operation now. It’s about a much broader span of topics, and the organisations see procurement as an integral part of the efficiency of the business, not as a side act.” Barratt Developments Plc. is the largest house builder in the United Kingdom and is the only major house builder that has successfully achieved and retained the highest customer rating for ten consecutive years. Key to this success is a vision for leading the future of house building that is driven by putting customers at the very heart of what the company does.
YEAR FOUNDED
1958
REGION HQ
London, UK
w w w. b a rrat td evel o p m e n ts . co. u k
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In order to realise this vision, Barratt has
cheaper components,” explains Adams.
spent the best part of the last decade
“The availability of product is of course
investing in and reorganising its supply
very important but there are many other
chain in order to redefine how the business
areas such as the sustainability angle
works with its customers so that it can
which are becoming increasingly prevalent
better serve them. For any business, the
and heavily influencing the supply chain
supply chain is a complex ecosystem that
and how it operates.”
needs to run like a well-oiled machine and
“I spend a lot of time with some of the
for Barratt Developments, this is no differ-
key stakeholders in the business trying to
ent. “In the role I’m in it costs us more not
help them understand why supply chain
to have components than it does to have
is important, why things they do influence w w w. b a rrat td evel o p m e n ts . co. u k
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“ T H E B U S I N E S S OR BUSINESSES G E N E R A L LY S H O U L D S E E I T A S A S T R AT E G I C O P E R AT I O N NOW. IT’S ABOUT A MUCH B R OA D E R S PA N O F TO P I C S , A N D T H E O R G A N I S AT I O N S S E E PROCUREMENT AS AN I N T E G R A L PA R T O F T H E EFFICIENCY OF THE B U S I N E S S , N OT A S A S I D E AC T ” —
J O H N A D A M S , G RO UP P RO C UR EM E N T DI R E C T OR , BA R R AT T D E V EL O P M EN T S
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B A RR AT T D E V E LO PM E N TS
what the supply chain can, and cannot do
“So we need those subject matters to be
for us, and how they can change some of
engaged with the suppliers so we can get
their behaviour to enable the supply chain
the best answers to them.”
to be more effective and more efficient, which then benefits them.”
Barratt Developments central procurement team controls around £500mn
The goal here for Barratt is to engage all
of annual spend, both direct and indi-
facets of the organisation into the impor-
rect. Direct spend accounts for close
tance of the supply chain, removing the
to £450mn of that overall spend and
reliance on the notion of a single procure-
Barratt’s success is defined by its aim to
ment responsibility but a much more
provide its customers with the products
shared one. Adams believes that every-
they want at the right time and of the right
one should be talking to suppliers, not just
quality in order to receive the positive
procurement professionals. “At the end of
experience of a new build. In recent years,
the day, we are not necessarily the subject
the scrutiny on the quality of the products
matter experts on everything,” he says.
has tightened while the volume output w w w. b a rrat td evel o p m e n ts . co. u k
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has rapidly increased in recent years and
or remove the requirement for skill onsite
so Barratt works tirelessly to ensure that
wherever possible. This is where the
it has the supply chain in place in order to
company embraces ‘modern methods of
feed the machine. “Our main focus has
construction’ in which Barratt’s design
been making sure that we have a supply
and technical teams work closely with
chain in place that’s capable of feeding
the supply chain in order to both trial and
the machine that we’ve got now and the
mature technologies and practices the
one that we will have in the future,” says
business wouldn’t traditionally use. Barratt
Adams. “We also have to look at new ways
will then integrate this into its day-to-day
of producing housing because there’s a
business as usual production facility and
skill shortage that’s coming and we have to
capability. “From a strategic point of view,
be ready for that.”
it is matching supply chain capability with
In order to ready itself for this skills shortage, Barratt works to either de-skill
our demand,” says Adams. “And then in the long term it’s looking at new methods w w w . c p o s t r a t e g y. c o m
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B A RR AT T D E V E LO PM E N TS
of construction, and developing a
the capacity to meet the demands
supply chain capable of supporting
of Barratt and its customers. This
us over a long period of time.”
required more focused and some-
One of the largest challenges
times challenging conversations.
in trying to constantly feed a
“It’s been an interesting journey
machine that is responsible for
because in this industry, some
more than £500mn in spend is
of the supply chain partners are
that of coping with demand fluc-
not necessarily as mature in their
tuations. Over the last decade,
thinking in capacity planning, in
market upswings and downturns
root cause analysis, and all the
have been unavoidable and this
things that we need to be good
of course will impact the supply
at, in order to make sure that they
chain ecosystem. Trying to trans-
make the best of the capacity
form a supply chain while operat-
they have available,” says Adams.
ing in a volatile market is no easy
“We’ve spent quite a lot of time
task and Adams acknowledges
trying to develop the supply chain
that Barratt has had to ride both
because I’d much rather work with
the highs and the lows in order to
somebody that I know is willing to
remain successful.
work with us than bring somebody
“Market upturns and downturns both present challenges, just
in that I don’t know, and start a brand new relationship.”
different ones!” he says. “Through
Refocusing supplier relation-
the downturn we very much had to
ships is never an easy endeavour.
focus a demand on fewer suppli-
On paper it makes sense and is
ers so that we keep those suppli-
easy to break down, but the real-
ers in a good state of order and
ity of the situation is never that
that they were able to support us
simple. For Adams, the key to
in the upturn.” This approach saw
successfully navigating this was
Barratt work with suppliers during
to break down what he describes
this downturn and then continu-
as ‘very adversarial’ old working
ing to work with them during the
practices that are common within
upturn so that the suppliers had
the industry. “It’s about trust. If w w w. b a rrat td evel o p m e n ts . co. u k
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you haven’t got that between yourself and your supplier, you’re not going to get very far,” says Adams. “The first thing to do is to change people’s view of what our supply chain is, what it does for the business and how important it is. Once you achieve that, then you have a much easier engagement model.” Barratt has a tiered approach with regards to its supplier engagement model that sees the executive engagement level shift accordingly based on the strategic nature of the supplier relationship. “As you go down the tier of the supply chain, the relationship engagement will fall to either myself to have the leading relationship or my team leading the relationship explains Adams. “We ensure that we have a relationship with a senior management team of all of our suppliers, so that we can get the right level of engagement with them.” Through this approach, Barratt is able to work to identify any issues between it and the supplier that will prevent either party from being efficient and get to the root cause of those issues by making changes where necessary. Part of this dynamic is built upon that trust and understanding and so in order to achieve this Barratt hosts a number of supply chain conferences that brings all of its suppliers together to explain what is going on, 14
B A RR AT T D E V E LO PM E N TS
John Adams
Group Procurement Director Barratt Development Plc.
Experienced Director Of Procurement with a demonstrated history of working in the construction, manufacturing, Automotive, Nuclear and Telecommunication industries. Responsible for sourcing strategy, supplier management and supplier development of all goods and services for Barratt Developments, the largest housing developer in the UK.
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what the vision for the future is and what
broader commitment that Barratt has to
expectations Barratt has for its supplier
its supply chain and make sure that the
base. “They understand our objectives
company has a set of suppliers that can
and how they fit into that,” says Adams.
deliver what it needs to the right quality
“We then have somebody in our team who
and at the right price. Barratt has been
is specifically engaged to look at supply
investing in and reshaping its supply chain
chain development. They have tools for
now for over a decade and in that time,
cause analysis that can help the suppliers.”
thanks to shifting market dynamics, it has
“But, what’s important is that we don’t
been clear that the road is never truly a
just go to the supplier with the tools and
straight line. In order to successfully navi-
say: fix this. We provide a methodol-
gate this and any journey, organisations
ogy and a suggestion as to how they can
need collaboration. This is where Barratt’s
understand the problem and solve it.”
supplier relationship model really stands
For Adams, this all forms part of the
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B A RR AT T D E V E LO PM E N TS
tall above others as a true competitive
“ O U R M A I N F O C U S H AS B E E N M A K I N G S U R E T H AT W E H AV E A S U P P LY C H A I N I N P L AC E T H AT ’ S C A PA B L E O F F E E D I N G T H E M AC H I N E T H AT W E ’ V E G OT N OW A N D T H E O N E T H AT W E W I L L H AV E I N T H E F U T U R E ” —
J O H N A D A M S , G RO UP P RO C UR E M E N T D IR E C T O R , BAR R AT T D E V E L O P M E N T S
edge. “Not every egg is going to be a bird, so you have to be prepared for investing in something that may not provide a business benefit in the end,” says Adams. “You will have failures and you can take learning from them. What’s important here is sitting with suppliers and working it all out. What went wrong? Why did it go wrong? What was the process? And so on.” “I think it’s incredibly important to be able to go through that with your suppliers in a structured way, regardless to the success of the project or not, and be honest so that every single person understands the highs and the lows so that you actually learn from the whole experience. That’s what our approach allows us to do.” After 10 years of change, Barratt is already having discussions about the next 10 years. The future is very much here and now for Adams and Barratt and so this supplier engagement model becomes a w w w. b a rrat td evel o p m e n ts . co. u k
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state of constant conversation and investment. As Adams noted, it’s about having to constantly feed the machine of today and of tomorrow. The market is already showing signs of significant change with sustainability impacting the legislation and governance of building homes. Barratt’s approach remains the same. “There’s quite a challenge for us to make sure that the supply chain is aligned to those changes,” says Adams. “Key to any of that, is people. People. People. People. The ability to deliver absolutely rests on the people who are doing that delivery. They are pivotal to what we do, and to everything we do. The basic building block is people in the team and their capability, and their ability to be able to relate to, develop and embrace the supply chain that they’re working with.”
LIST EN TO JOHN ADAMS ’ PODCAST ON THE DIGITAL INSIGHT ’S OUTPUT CHANNELS BELOW
w w w. b a rrat td evel o p m e n ts . co. u k
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