Comment | 08 March 2021
Mega by name, mega by nature. ‘Megaprojects’ are large scale infrastructure builds – the International Space Station, for example – that can cost up to $150 billion, impact millions of people, involve multiple public and private stakeholders, and take decades to complete.
Although the numbers and scope paint an impressive picture, they are often associated with poor performance against initial forecasts of budget and schedule. Much of this is down to the millions of components that all need to work in perfect harmony, with even minor delays causing big knock-on impacts.
As the UK Government promises to ‘build back better’, Wincanton’s Commercial Director, Jonathan Shortis, explores some of the big challenges facing the industry and how optimising each step of the supply chain can catalyse the UK’s economic recovery.
What are the big challenges facing major infrastructure projects through 2021 and beyond?
Although 2020 has changed the supply chain landscape across many areas of UK industry, the challenges remain fairly settled when it comes to supporting major infrastructure builds. The key issues are: delivering product certainty to the point of use, reducing waste and inefficiency (both material and supply chain inefficiency) and maximising productive engineering time.
"On-site construction professionals are less than 35% productive, with up to 15% of downtime associated with materials availability issues at point of use."
The simple solution to all of the above is to make the end-to-end supply chain as efficient as possible, whilst removing materials management accountability from the engineering workforce. Unlike some other supply chains, ‘megaprojects’ are fed by numerous suppliers that often span the entire globe. Factor into this the number of stakeholders – from procurement through to construction - and the sheer complexity becomes obvious.
The enemy of large-scale project and infrastructure delivery and maintenance is engineering downtime. For example, it is estimated that, in most cases, on-site construction professionals are less than 35% productive, with up to 15% of downtime associated with materials availability issues at the point of use.
Thus, solutions which ensure that every part of the supply chain ahead of the point of deployment to the engineering teams runs as smoothly as possible, are essential to the delivery of projects to time and cost.
How can these supply chains be optimised?
Megaproject supply chains are complex and involve many different entities – these range from global suppliers, through to businesses involved in specialist areas of the construction process. When this is the case, there’s a risk that accountabilities may be unclear, leading to a lack of control and a loss of material visibility and traceability. Ultimately this can negatively impact on material availability and, of course, expenditure.
At a simplistic level, there are a number of key challenges to increasing engineering productivity, materials spend and supply chain efficiency. These include: materials acquisition (with a preference for OEM supply), visibility across supply chain interchanges, materials receipt, storage and dispatch, and delivery to point of use – all of which have an impact on just-in-time availability. If these processes can be joined up – integrating from planning and procurement through to supply chain and build – then the points of inefficiency can be reduced.
Standardisation of system and process is also critical and drives visibility and traceability across the complex in-bound supply chain. Clearly, single-point accountability for the supply chain can help in this respect, backed up by the use of agile systems for materials control. Through the correct application of supply chain disciplines, an opportunity exists to manage vendors more closely, and the call-off of products against the plan – to reduce local stockholding and working capital, without the risk of reduced availability.
Being able to manage this process through a single provider, or a system that seamlessly links all, will ultimately reduce friction at each stage.
How can a supply chain specialist integrate into this process?
The goal of any supply chain integrator is aligned to the major construction businesses – namely to help drive project time and cost reduction, through increasing engineering productivity, by the application of best-in-class supply chain management processes and principles.
"Significant value is generated when engineering productivity is maximised."
An established supply chain partner, like Wincanton, can provide such solutions at great pace – cross-fertilising best practices from across a wide variety of market sectors to bring supply chain innovation to major infrastructure projects. This is where the added value in working collaboratively with an experienced partner becomes apparent.
For these major projects, significant value is generated when engineering productivity is maximised. In short, we need to ensure that materials supply chains don’t inhibit the construction process by diverting engineering resources away from the job at hand.
An active example of Wincanton’s expertise in this space is EDF Energy’s Hinkley Point C nuclear power plant construction in Somerset. Wincanton’s role through the life of the project is to effectively manage materials and coordinate construction site deliveries to help keep the build on-time and to schedule. In this way, we can help the country reduce the reliance on fossil fuels for energy generation.
Megaprojects of this nature are sure to remain high on the Government’s agenda as we continue into 2021. As such, a clear opportunity exists to implement resilient supply chain management processes for in-bound material delivery and hence ensure projects are realised to plan.
With established expertise across many different areas of the UK supply chain, Wincanton is well-placed to use its’ knowledge base to help in the delivery of these essential, high profile projects.
Away from efficiency, sustainability is a topic high on the agenda. How can major infrastructure supply chains deliver more sustainably?
Sustainability is a key part of any supply chain. While Environmental, Social, and Corporate Governance (ESG) isn’t typically a primary driver, this will be a concern that supply chain specialists need to factor into their operations, Wincanton included.
"Being more efficient with resources is more sustainable."
ESG issues continue to rise up the agenda, so we expect to see more requests focused on sustainability concerns in the future – whether this be driven by regulation, or the desire to drive efficiencies. Being sustainable cannot be an afterthought - it needs to be embedded at each and every step of the supply chain.
Being more efficient with resources is more sustainable, while methods such as offsetting can come into action in areas where carbon emission reduction is not yet 100% feasible.