Programme Procurement in Construction

About the authors xi List of figures and tables xiii Forewords from Sir John Armitt CBE, Howard Shiplee CBE, Martin Rowark and Professor Geoffrey E. Petts xv Preface xix List of acronyms xxvii 1. Purchase and Supplier Engineering and the London 2012 Olympics 1 Introduction 3 The concept of Purchase and Supplier Engineering 4 Programme organisation – an Olympic case study 8 Procurement organisation structure – the Olympic Delivery Authority 11 Roles and responsibilities 11 Projects and programmes 13 Concluding remarks 14 Reference 15 2. A framework for understanding markets in construction 17 Introduction 18 Managing the supply market 19 The client and construction 23 Projects, programmes and construction dynamics 25 The client and the supply chain 27 Defining the supply chain 28 Outsourcing and subcontracting 31 Understanding and managing conflict in construction 34 Concluding remarks 39 References 40 3. The client’s values and the balanced scorecard 43 Introduction 44 Developing a framework for measuring performance 46 All from a project vision 47 Performance measurement 50 Using balanced scorecards to communicate values and measure performance 53 Developing a balanced scorecard 56 Measures including key performance indicators 58 Construction KPI measures of economic sustainability 58 Social sustainability: Respect for people KPI measures 59 Environmental sustainability: Environmental KPI measures 59 Creating appropriate KPIs from a project vision and scorecard 62 Concluding remarks 63 References 64 4. Packaging and contracting strategies 65 Introduction 66 What, why and how to buy 68 Packaging strategy 70 Gestalt theory 73 Programme clusters 75 Programme application 78 Contracting strategy 79 Forms of contract used in the 2012 Olympics procurement 79 Classifi cation of contracts 82 Concluding remarks 85 References 88 5. Common component and commodity strategies 89 Introduction 90 The benefits of a common component strategy 91 Factors infl uencing the procurement of common components 93 Market leverage 93 Supply chain security 95 Future maintenance and operations 95 Design efficiencies 96 Developing a common component strategy 96 Stage 1: Performance criteria 97 Stage 2: Assessment of benefits of implementing a common component strategy 98 Stage 3: The benefi ts of a common component purchasing strategy 99 The common component procurement strategy 100 Concluding remarks 102 References 102 6. Engaging with suppliers: How to attract suppliers and increase interest and awareness 103 Introduction 105 Gathering market intelligence 107 Supplier dialogue 109 One-way supplier dialogue – Supply chain events 110 One-way supplier dialogue – Industry days 110 One way supplier dialogue – One-to-one meetings 111 One-way supplier dialogue – Meet the buyer events 112 One-way supplier dialogue – Meet the contractor events 113 One-way supplier dialogue – Supplier guide 114 One-way supplier dialogue – Business opportunities website 115 One-way supplier dialogue – Opportunity slides 117 Two-way supplier dialogue – Supplier registration and pre-assessment questionnaires 117 Two-way supplier dialogue – Market soundings 120 Concluding remarks 125 Reference 126 7. eSourcing and process codifi cation: Standardising programme procurements 127 Introduction 128 The guiding principles of a robust procurement process 129 Standardising procurement documentation 130 Security of the procurement system 131 Evaluation of tenders 132 The application of electronic tools in the procurement process 133 eSourcing 134 eEvaluation 139 Aspects of managing systematic procurement processes 141 Standard processes 141 Schools of excellence 142 Governance 143 Assurance 144 Training 145 The milestones of procurement reporting 146 Standardisation and codification of the procurement process 147 Stage gate 1 – Agreeing the procurement strategy 148 Stage gate 2 – Tender documentation completion 148 Stage gate 3 – Tender list agreement 149 Stage gate 4 – The tender report 149 Procurement reporting 151 Concluding remarks 151 References 154 8. Managing supply chain involvement across a programme 155 Introduction 156 Supplier relationship management 157 Remaining in contact with all firms who tender for work 159 Supply chain mapping 162 Concluding remarks 167 Reference 168 9. Due diligence and the management of capacity 169 Introduction 170 Modelling supplier utilisation 170 Monitoring the fi nancial strength of suppliers 180 Sub-tier supplier engineering 182 Identifying critical suppliers 185 Concluding remarks 189 References 191 10. Performance management 193 Introduction 195 The Purchase and Supplier Engineering model and programme management 195 Purchase and Supplier Engineering and the programme management office 197 Performance management within Purchase and Supplier Engineering 197 Analysis 198 Control 199 Performance improvement through Purchase and Supplier Engineering 200 Benchmarking 201 Concluding remarks 201 Index 205