Supply chain management

We manage our supply chain through an integrated team of supply chain professionals who are locally based in all operating regions, including on projects and contracts, and who follow a standard approach.

Our Sustainable Procurement Steering Group is a cross-business forum for sharing and developing ideas and best practice, and is the driving force behind sustainable procurement in Carillion, including the delivery of its 2020 Supply Chain Targets.

All supplier categories are assessed through a Sustainable Procurement Risk Tool, which identifies key risks for each of our managed categories and how we mitigate them.

We have adopted the UK Government’s Flexible Framework as the methodology through which we will develop our approach to measuring and monitoring our progress on sustainable procurement. This was chosen because it is aligned with, and supports the delivery of, many of our clients’ sustainability objectives. We have now successfully achieved Level 3 and are on course to achieve Level 4 in 2013; many of the requirements for Level 4 having already been met.

Leading the way with our suppliers

Committed to...

...ensuring 100% of our contracts report on sustainability

See our progress against targets

Almost 6,000

performance reviews of suppliers carried out to date

62%

average supplier sustainability score

Our Leading the way strategy focuses on the following objectives:
 
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Purchasing responsibly and ethically sourced products and materials

Ensuring all timber sourced meets Forest Stewardship Council or equivalent standards

Targeting our top suppliers to collaborate on developing enhanced sustainable products and services

Benchmarking suppliers through Carillion’s accreditation process and providing guidance to those who meet only our basic requirements

Maximising local spend and employment, including spend with Small and Medium Enterprises

Promoting Business Action on Homelessness (BAOH) within our supply chain, with the objective of signing up suppliers as members

In 2012, we enhanced and improved the criteria by which we assess and accredit our suppliers by introducing a question set focused on sustainability. This is now measured along with health, safety and quality, and is formally approved through MyRegister, our supplier accreditation system. Suppliers are graded A–D against the question set, and we select those scoring highest.

As well as the new question set we have developed a comprehensive ‘Guidance Note’ for use by our suppliers scoring C–D. The intent is to ensure that they understand our standards and provide practical help to improve their approach.

We measure the performance of our suppliers on a regular basis using our Supplier Performance Improvement tool. The average supplier sustainability score from 6,000 reviews carried out in 2012 was 62%, which we have set as the baseline from which we will measure improvement in 2013.

The Supply Chain Academy

The Supply Chain Academy (SCA) supports supply chain teams to develop their expertise and improve supply chain performance. It is managed by a committee consisting of subject matter experts from across the business units and within the category management function, who evaluate the creation of external and internal courses. In 2012 it delivered 299 training days.

In 2012, we added more sustainability elements to the Supply Chain Academy including two-hour Sustainability Webex sessions.

In 2013, we will be adding a one-day advanced sustainability course, which will be rolled out across all supply chain and key commercial staff to:

  • support the achievement of Level 4 of the UK Government’s Flexible Framework
  • raise further awareness of our 2020 strategy and the role they play in delivering it
  • upskill our people in areas such as ethical sourcing.

We will also be supporting supply chain professionals more closely with a needs assessment process.

Raising the bar

Going forward to 2013, supplier collaboration will be the theme. We will be extracting more information from the Sustainable Procurement Survey sent to our top 250 suppliers in order to find out more about their sustainability programmes, and exploring how we can work together to develop effective community programmes.

We will also be targeting those suppliers scoring C–D in our supplier accreditation system through developing supportive guidance notes outlining our standards, and practical assistance to meet them.

Finally, we will be introducing an embodied carbon measurement tool to allow us to focus on areas of our supply chain that have the greatest impact in terms of whole lifecycle carbon emissions, and to work with suppliers to reduce this impact.

Our suppliers are also invited to participate in our S-Factor sustainability competition. In 2012, Speedy Hire and Fatra were semi finalists and demonstrated how their service was contributing to our and our customers’ sustainability objectives.

UK

Working with Speedy Hire

Working with Speedy Hire

We worked closely with Speedy Hire in the UK, our equipment and tools supplier for many years, to develop a Green Option (GO) product range. Speedy worked with their own supply chain to drive this, and we agreed a commercial model to help ensure that the initiative would deliver savings for our contracts.

Between 2011 and 2012, 27 products were added to the GO range (with 40 more planned), delivering savings of £120,000 and 270 tonnes of carbon. Our engagement with Speedy also contributed to a manless depot being developed. This uses Radio Frequency Identification technology to remove the need for daily deliveries to our contracts – so saving even more in fuel, carbon and costs.

Global

Supplier payment through e-invoicing

Data Tunnel

We have continued to roll out our e-invoicing paperless system. In 2012, around 250,000 invoices were processed through this route, a huge increase on 55,000 in 2011 and representing 64% of all our invoices. As well as ensuring a more efficient payment process, the paperless system helps us to improve our own sustainability performance, cutting costs on items such as stationery and postage, and reducing our carbon footprint.

UK

Stepping up to the mark

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Launched in 2010, Step Up is our UK initiative to standardise and streamline our procurement processes, including identifying whether suppliers meet our core sustainability criteria.

In 2012, one area we explored through Step Up was our provision of healthy hospital meals. We held extensive discussions and workshops with all the hospital trusts Carillion supplies as well as specialist consultants and dieticians. Following this engagement, we decided to appoint a single source supplier, and as a result we are now able to consistently offer a superb range of foods to our hospitals.

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