National Commercial Directors’ Forum
Day 2 – Supplier Performance Metrics
4th December 2015
16-Mar-16 / 1
Welcome Back
Stephen Blakey,
Commercial Projects Director, Infrastructure Projects
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Today’s Agenda – Friday 4th December
Time
Session Name
Session Hosts
08.30
Coffee and Seating
08.45
Supplier Performance Metrics – The Vision
Stephen Blakey
09.00
Supplier Performance Metrics – Central Region’s Journey
Rob Offord, Sean O’Brien & Colleagues
09.45
Break Out Session 1 – Obstacles to Successful Deployment
10.15
Panel Q&A
10.30
Coffee
10.50
Break Out Session 2 – Solutions to a Successful Deployment
11.20
Panel Q&A
11.30
Break Out Session 3 – Action Planning
12.00
Panel Q&A
12.15
Open Forum
12.30
Next Steps
12.55
Summary & Close
13.00
Lunch (Restaurant) / Depart
Central Team
Central Team
Central Team
Stephen Blakey
16-Mar-16 / 3
Todays Objective
•
•
•
•
•
To fully understand the proposition
• what, why, when, how & the impact to date
To acknowledge the potential blockers
• And learn from the Central Team’s experience
To identify the solutions
• And learn from the Central Team’s experience
To develop a credible action plan
• And be guided by the Central Team’s experience
To reach consensus on what needs to be done to hit
the April 2016 target
/ 4
Supplier Performance Metrics –
The Vision
Stephen Blakey,
Commercial Projects Director, Infrastructure Projects
(08.45 – 09.00)
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Context: Supplier Performance
● Safety: Pursuit of a greater contribution in the procurement process to delivering a step change in
safety.
● Engagement: Driving industry change through dialogue in industry forums, joint problem solving
and the development of progressive commercial relationships that improve industry performance.
● Collaboration: Greater use of frameworks with an emphasis on corporate behaviours and
values and the introduction of progressive forms of contract from NEC through to Pure Alliance
Models. Expansion in the number of collaborations certified under BS11000 and active support to
our key suppliers where they are seeking similar certification.
● Performance: Progress across three elements, namely; 1. Supplier Performance: Increased focus
on industry acceptable performance metrics and their use in supporting and illustrating improved
performance; 2. Asset Performance: Procuring for asset resilience and performance surety; 3.
Commercial Performance: Promoting consistency and clarity of costs and efficiencies through
standard approaches to cost modelling, benchmarking and measurement.
Francis Paonessa,
IP’s Managing
Director is the
Senior Executive
Responsible for our
Supplier
Performance
Management
Executive Sponsorship
● Innovation: Rewarding innovation by supporting the development, deployment and promulgation
of new and effective techniques of delivery and commercial stewardship.
● Sustainability: Building on the 5% weighting in tender evaluations to integrate and develop
sustainability dimensions into all that we do.
● Communication: Continued dialogue through forums such as the CDF, industry bodies and
professional institutions, supplier forums and account meetings.
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Supplier Conference: Breakout Sessions
Collaborative Working
(G1 – Blue – E13)
The
need to better
Communicate
more,
define,
identify
and
especially face-to-face
nurture collaborative
meetings
behaviours to
promote consistency
across the supply
chain
Structured Continuous
Improvement
Consistent Performance
Measures
(G2 – Green – E9)
(G3 – Yellow – E1)
The need to ensure
that improvements in
safety, efficiency and
delivery are
imbedded in our
industry
The need to bring
greater consistency
in what we do and the
progress we are
making through
common metrics &
measures
Health & Wellbeing
(G4 – Red – E11)
Our ongoing commitment to support the health & wellbeing of our industry’s people
/
Consistent Performance Measures/Metrics
Q1: Do you think that a common set of Performance
Metrics will improve our performance & be beneficial to
NR and suppliers?
1.
No and I see no benefit in doing so
2.
No because I can see some real
87%
dis-benefits to our business
3.
Yes I can see the benefits and would like
NR to define what they want to measure
& how
4.
Yes I can see the benefits and am happy to
participate in the development /
refinement of processes & metrics
3%
5%
4%
1
2
3
4
/
Consistent Performance Measures/Metrics
Q2: If NR builds from existing metrics and works with
suppliers to establish a broad consensus, a National
set of Performance Metrics could be deployed in?
1.
3 months
2.
4-6 months
3.
7-9 months
4.
10-12 months
5.
It can’t be done by consensus.
39%
29%
20%
NR should develop a set of metrics
and deploy
6%
5%
1
2
3
4
5
/
Context: Where are we now…………
•
•
•
•
•
•
•
•
•
•
•
•
The 2013 CP5 National Supply Chain Strategy
committed to industry collaboration
IP has procured 85 key frameworks
Most of these allow local development of
KPIs/KRAs & incentives to drive performance
80 Frameworks make use of target cost &
pain/gain to incentivise vfm & cost control.
KPIs & KRAs are now established across 58
frameworks covering £6.5bn
Performance against these KPIs moderates gain
‘Local’ KPIs/KRAs have common themes & align
to corporate, programme & project priorities
Building on best practice, a national approach to
a standard set of KPIs/KRAs is being developed
These KRAs are 1 of 4 ‘performance
dimensions’
Supplier sentiment positive to national approach
We recognise the ongoing challenge in
demonstrating the benefits of collaboration
In particular illustrating improved performance
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Supplier Performance Metrics – The Vision
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Supplier Performance Management - 60 second Brief
The need for
change
(The Problem
Statement)
KPIs have been developed locally for many of our Frameworks & Alliances. Whilst they reflect
common themes, they do not have common or consistent definitions, methodologies or IT
platforms. This prevents NR in forming a view on a like for like basis of the respective
performance of our suppliers and inhibits our ability to promote structured continuous
improvement.
What good
looks like
(The Solutions)
One national set of performance dimensions (Key Results Areas) supported by a standard suite of
Key Performance Indicators, with consistent definitions, business process (data gathering and
calculation methodologies) and systems (IT platforms, data gathering and reporting systems) that
allow like for like performance comparisons that support the structured continuous
improvement of our suppliers .
How will we
get there?
(Deployment)
By the national deployment of a successful performance management regime piloted in Central
Region. Building on the experience & lessons learned from the Central team (NR & its Suppliers)
and identifying the People, Process & Systems issues to be addressed in support of establishing a
national set of performance metrics by April 2016. Running these metrics in parallel to existing
KPIs (with no fiscal impact) for a minimum of 6 months prior to the phased & negotiated ‘swap
out’ of the old for the new.
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Supplier Performance Metrics
Central Region’s Journey
Network Rail’s Perspective
Rob Offord, Sean O’Brien & Colleagues
Central Region, Infrastructure Projects
(09.00 – 09.25)
/
Network Rail
Supplier Performance Framework
/
Supplier Metrics
Objectives of this session;
“Provide a full understanding of IP Central’s
Supplier Metrics Model”
Why do it?
What is it?
How does it work?
What she impact to date?
15
Reasons for the Supplier Performance Framework
Efficiency, productivity and quality – meeting the performance criteria will
encourage measurable continuous improvement. Encourages a high
performance culture.
Set the standard - achieve a high standard across all aspects of project
delivery and to apply this consistently within IP.
Opportunity to improve – through facilitated sharing of best practice and
lessons learnt.
Benchmarking – supplier metrics drive innovation and will therefore encourage
the bringing of excellence from other sectors.
Performance comparison - to enable objective review and comparison of our
suppliers’ performance, and the collaborative development of robust
improvement action plans.
16
Supplier Performance Framework - Structure
Health & Safety
- Behavioural Safety
- Life Saving Rules
- Health & Safety Assurance
- Occupational Health
- Accidents & Incidents
Design Management
- Building Information Modelling
(BIM)
- Approach to Design
- Delivery of Design
9 KRA’s
(10th NR Feedback survey))
Programme Management
Quality
- Opportunity & Risk Management
- Integrated Scheduling & Access
Planning
- Integrated Progress
Measurement & Reporting
- Handback & Close Out
- Quality Management Planning &
Process
- Quality Management System
- Competency & Capability
- Inspections
- Audits
Collaboration & Behaviour
31 KPI’s
Commercial
- Development & Management of
Target Cost
- Management of Estimated Final
Cost (EFC)
- Strategic use of the Supply-Chain
- Cost Capture & Verification
- Commercial Close Out
Continuous
Improvement/Innovation
- Idea Generation
- Continuous Improvement
- Innovation
109 Performance
Sustainability
& Stakeholder
Measures
(under Customer
Management
- Procurement, Sourcing &
- Community Liaison
review)
Resource Usage
- Third Party Approvals
- Behaviours
- Collaboration
- Communication & Engagement
with Staff
- People
- Pollution & Waste
- Leaving a Legacy
- Environmental Assurance
- Environmental Risks & Incidents
17
Supplier Performance Framework - Structure
KPI Applicability

Lead KPI’s (54 total):




When Measured? Every Quarter
Lag KPI’s (55 total):

1.1.5 - Consistent close call reporting
process across the lot, including how the
resulting data and trends are used to
improve safety performance.
Example evidence: Company wide close
call reporting process
When Measured? Every Period

1.1.6 – Number & quality of Health
& Safety Close Calls reported

1.1.7 - Close out of Close Calls

Example evidence: Site specific
close call data
Maximum applicable measures:
GRIP stage
1
2
3
4
5
6
7
8
(Lead & Lag Period)
18
30
40
45
68
88
76
10
Lag only
2
7
15
18
29
49
37
7
18
Supplier Performance Framework - Structure
19%
19
Supplier Performance Framework - how does it work?
Assessment process by supplier and KPI Review Team
Who: Supplier KPI Coordinator
Supplier selfassesses scores
against each
applicable measure
Who: T&T KPI Review Team
When: Week 1 & week 2 of following Period.
When: Periodically & Ad hoc
as required
• Performance information
used in SAM meetings.
• Bi-monthly Action
Improvement meetings.
Who: Supplier KPI
Coordinator
Reports produced to
inform performance
improvement
activities.
Supplier submits
Period scores
online to KPI
Review Team.
• Bi-Annual Supply Chain
Best Practice Forum
When: Friday week 2.
NB: All evidence to
substantiate ‘stretch’ &
‘excellence’ submitted
Who: T&T KPI Review Team
Who: T&T KPI Review Team &
Supplier KPI Coordinator
When: 2 hour meeting week 4
T&T KPI Review
Team review,
challenge &
validate supplier
self-scores.
Periodic Review
meeting to confirm
agreement of
scores.
20
When: Week 3
This stage frequently requires
communication between KPI Team &
Supplier to ensure accuracy of scoring.
Supplier Performance Framework - how does it work?
1 - Health
& 1.2.1
- Process to by defined criteria
Score
levels
determined
Safety
embed Network
Rail's Life Saving
Rules
Excellence (120)
Stretch (100)
Expected (0)
Below
Expected
(-100)
- Does not meet all
of the
requirements for
'Expected' level
- Campaigns and
communications
in place to drive
continuous safe
behaviour
- Up to date plan
for delivering Life
Saving Rules
training for all
personnel
- Incentivisation for
operatives to provide
suggestions to
solutions to breaches
of Life Saving Rules
- Schedule of
workshops to take
place with all
personnel,
subcontractors and
materials suppliers to
review compliance to
Life Saving Rules on
sites, put action plans
in place, and to share
across supply-chain
Performance
Improvement
Contractual &
Commercial impact
- Up to date plan
to embed Life
Saving Rules into
toolbox talks and
engagement
conversations
The performance levels can be characterised by generalised themes.
21
Performance Improvement
The Supplier Performance Framework is a platform for driving best
practice across the CP5 lots through collaboration.
Action Improvement Meetings (Bi-Monthly)

Improvement actions are focused on areas of under performance.

The contractor functional lead is accountable for all improvement
actions within their area.

These actions are reviewed at agreed intervals to ensure
progress is on track.
Best Practice Forums (6 monthly)

A collaborative and integrated forum.

Suppliers share Best Practice and improvements.

Standardisation of similar processes to increase
efficiency. (eg LSR test)
NR Enablers
Measurement of NR activity to enable more effective contractor delivery, as
measured under CP5 Panel/Programme contract KPI frameworks
REMIT:
1.
Which of the project life cycle areas can NR affect most influence on successful outcomes for the contractors
delivery?
2.
Whether it is currently measured or not, what activities and performance should NR monitor and improve upon?
3.
1st time doing this, so start small with a few, and monitor. Over time we will better understand dependencies of
true performance improvement.
4.
This is WORK IN PROGRESS.
23
Outputs and Reports
24
Performance Trends
Lead & Lag periods
Improvement in Lead policies &
processes is driving improvement
in Lag performance
25
Supplier Performance Metrics
Central Region’s Journey
The Suppliers Perspective
(09.25 – 09.45)
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KRA/ KPI Review
CP5 Contractor Perspective
Initial Thoughts
Murphy KPI Timeline
•
•
•
•
Appoint an overall manager in charge of KRA’s
Appoint leads for each area of the KPI’s
Investigate current processes and policies
Benchmark current maturity levels against KPI
requirements
• Create a business case with associated timescales for
achieving Expected, then Stretch, then Excellence
• Senior Manager holds regular review meetings with
the leads to ensure progress is on track
Communicate
Repeat Exposure
Create a Habit
VolkerRail KPI Timeline
• Benchmark position at award (0) and position that
could be achieved without major investment (70)
• Appoint a Senior Business Manager to Lead each KRA
• Processes and Standards reviewed and amended
• Introduced new processes and procedures where
none existed (Bright Ideas & Collaboration Maturity
Assessments)
• Create an action plan for each year.
• Appoint an KPI Analyst to identify opportunities &
drive improvement
Story KPI Timeline
• Appoint Senior leader to take ownership of KPI’s for
the Rail business
• Undertake a review of Story process against KPI
requirements
• Set improvement targets against KRA by individual
KPI
• Appointed KRA ‘Champions’ to lead improvement
plans
• Lead to review and improvement of existing
processes in a number of areas
Benefits so far
• Murphy Apps commissioned
• Contractors collaborating much more openly
• Strengths & Weaknesses Identified
• New processes and systems introduced
addressing value engineering, innovation, risk,
collaboration
Benefits so far
• Review of existing process has lead to
improved processes in a number of areas
• Now reviewing additional business process to
looking at Process and System improvement
Any questions?
Break Out Session 1 – 30 minutes
Obstacles to successful deployment
1) Identify a scribe (use the flip charts)
2) Discuss in your table groups the key
blockers to achieving the objective
3) How could this initiative be
sabotaged, by who and why?
Be ready to discuss in open forum and
challenge ‘The Panel
(09.45 – 10.15)
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Obstacles to successful deployment
Panel Q&A
Central Team
(10.15 – 10.30)
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Coffee and Conversation
(10.30 - 10.50)
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Break Out Session 2 – 30 minutes
Solutions that support a successful
deployment
1) Identify a scribe (use the flip charts)
2) Discuss in your table groups the key
solutions to achieving the objective
3) How could this initiative be
supported, by who and why?
4) What personal contribution can you
make?
(10.50 – 11.20)
Be ready to discuss in open forum and
challenge ‘The Panel’
/
Solutions that support a successful deployment
Panel Q&A
Central Team
(11.20 – 11.30)
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Break Out Session 3 – 30 minutes
Action Planning
1) Identify a scribe (use the flip charts)
2) Discuss in your table groups the key
actions necessary to meet the
objective
3) Schedule out the key milestones as
you see them
Be ready to discuss in open forum and
challenge ‘The Panel’
(11.30 – 12.00)
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Action Planning
Panel Q&A
Central Team
(12.00 – 12.15)
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Open Discussion
Do you support the objective?
What are you personally going to do
to promote & support this?
Do you support the plan?
Who does this need to be
syndicated with in your business
Who could help us?
(12.15 – 12.30)
16-Mar-16 / 42
Next Steps…
(12.30 – 12.55)
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Summary and Close
Stephen Blakey, Network Rail
(12.55 – 13.00)
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Thank You and Safe Journey Home…..
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