Supply Chain Resilience during COVID-19
We spoke to some of our Framework Partners to see just what measures have been put in place to maximise supply chain resilience during these trying times.
John Graham Construction
Measures to retain supply chain resilience
Throughout the current crisis Graham have maintained close dialogue with our material suppliers and subcontractors ensuring we understand the impact across their business and their ability to support our delivery of critical NHS projects and other projects.
We have engaged with them to understand:
• Impacts on the labour force through illness and / or the requirement to self-isolate
• Furlough numbers and timing
• Financial aspects including impact on their cash flow
• Materials and goods availability as a result of impacts on their suppliers
We have implemented the Supplier Relief principle of Cabinet Office PPN 02/20 with our supply chain members (SCMs) to support them. This ensures that they remain in a position to support our sites as we return to the new normality.
We have kept a focus on the needs of SME and Micro SME businesses we work with, ensuring impacts on them are reduced to a minimum through financial and risk sharing measures. COVID 19 has a significant impact on the project risk profiles, impacting our SCMs. As part of our dialogue with current and prospective SCMs, we review risk and accountability associated with their supply element and agree collaborative and shared ownership so that not all risk is passed down. SCMs financial standing may have been impacted and we continue to do in depth checks to understand their stability and capability to deliver, ensuring we understand any that are at risk, and importantly identifies those that may need support from us.
Where SCMs have furloughed key staff, we work with them to provide support from our own management or by ensuring enough continuity of work to allow for staff to return to work. Tests will be carried out to ensure ability of services are not compromised with reduced staff numbers. GRAHAM have engaged in open dialogue with our SCMs to discuss impacts and agree pragmatic solutions to either party’s contractual obligations. Doing this has ensured continuity of delivery by our SCMs, maintained their cashflow, and continued delivery for our clients. We adopted this approach to provide certainty to our suppliers and retain strong future relationships.
On our NHS projects, we worked with other Tier 1 constructors to enable merchants and some other key suppliers to reopen. This also included dedicated NHS Construction Hot Lines set up for priority deliveries. Members of the GRAHAM team were part of the Procure 22 Programme Management Office that supported NHSI/E in delivery of the Nightingale Hospitals. Specifically, Finlay Murray from GRAHAM, led the Procurement and Supply Chain Task Group. As a result, we have an extensive and detailed understanding of current supplier capability across the UK. Many of our suppliers were part of this exercise, providing valuable further insight and knowledge which will support delivery of projects for Clients.
The Procurement Team gathered valuable information on market source, quantity, availability, and future productivity outputs across industry suppliers enabling a thorough knowledge of capacity and capability of suppliers to support our projects.
The above demonstrates the robust nature of the GRAHAM response to COVID-19 and our commitment to maintaining the health and wellbeing of our workforce and SCMs. The robust measures taken support and ensure our capability to bid and deliver projects for our Clients in a productive and safe way.
During the COVID-19 crisis we have maintained payments to our supply chain partners in line with agreed payment terms and the fair payment charter. In some instances we have improved payment terms to support our partners and also maintain production and progress where necessary. This has been achieved through regular and ongoing dialogue with our partners to identify, and understand, pressures and constraints they may have and areas where we could make improvements together. By way of example:
M&E Contractor on one project – Have had to source materials from a wider range of wholesalers due to shortages of stock with their normal suppliers and have been asked to pay for materials up front due to no credit facilities at the alternative providers. ISG have stepped in and purchased materials on their behalf to maintain programme and assist with cashflow.
Partitioning Contractor on one project – an opportunity to catch some time up (due to COVID-19 ) was identified but required an increase in labour onsite whilst still maintaining social distancing measures. This created a problem for the contractor in question in so far as their labour is paid weekly and the increase in labour meant that they were paying out far more than anticipated, creating problems with their cash flow. We agreed to reduce their payment terms to 14 days, with fortnightly valuations to manage this issue with them.
In addition to this, we have also more recently supported our partitioning contractors across the region by bringing them together to understand the overall demand for plasterboards and bagged plaster finish etc . We were made aware of a potential issue with a major supplier, British Gypsum, suspending production so our supply chain team has worked with British Gypsum to maximise the allocation of materials across our sites and minimise disruption to the partitioning partners and the projects.
Coronavirus Project Action Plans
COVID 19 ISG Approach
1. Comply with Gov & industry guidelines for social distancing
2. Ensure we keep people healthy and safe
3. Maximise productivity and minimise impact
4. Lead the industry in shaping the ‘new normal’
Optimising safety, welfare and logistic on our projects
Avoid an over-reliance on PPE
Optimise travel arrangements for the workforce
Making the journey to the ‘new normal’ together with all stakeholders
Finding improvement, innovation and efficiencies
Supply chain solvency
Availability and flow of materials to site
Reducing / re-balancing the density of labour on site through more efficient working
Creating an environment where the workforce is motivated
ISG Business as usual
What we have learnt so far…..from our Supply Chain
Held supply chain forums with over 100 subcontractors
Listened to 25 in detail about their views, concerns and taken action
Used questionnaires to collect data focussed on trade specific challenges
Run ‘Teams’ workshops to review & share info and experiences
What we have learnt so far…..from our Own Business
Capturing programmes & resource data from our sites
Benchmarking pre & post COVID-19 site set-ups
Sharing learning across all UK construction regions
Supply chain data
Difficulty to achieve social distancing for main activities
Measures to be taken to meet guidelines
Pre & Post COVID-19 labour and production rates for key activities
Utilising off-site manufacture and DfMA
Fast construction that reduces site labour or material shortages and drives quality
Defects are minimised and quality control is high
Manufactured in factory controlled environment and tested
Assembled on-site to produce final outcome quickly reducing programme
Early testing and commissioning
How and to what extent will BIM help
Digital surveying validation of existing structure and site conditions using laser scanning (point cloud)
Collaboration platform shared information, clarity and informed decision making
Minimise waste through good design and modelling optimised component based approach and DfMA
Building services – MEP
Opportunities and Challenges
Incorporating sustainable energy solutions to provide a ‘green energy’ micro-grid solution
Ensuring that the scheme can be delivered safely. In a timely manner and within budget
Constructing a safe, welcoming space in a post Covid-19 world
Early engagement with designers, specialists and stakeholders
Coordinators design and integration of sustainable energy technologies
Plan for testing and commissioning of the development from the outset
Ongoing management and maintenance requirements
Sustainability Opportunities – Lean, Clean & Green
(Post Covid-19 Design Considerations)
Time for dialogue
Programme method & logistics analysis and buy-in
Optimum design and specification / collective understanding
Protect the programme & reduce the risk
Client, team and stakeholder interface
Site logistics & the size of welfare areas has become a key driver to the overall pace of construction
Logic, sequencing and greater efficiency will have a significant impact on programme and productivity levels
Our supply chain have reacted well & engaged positively & intelligently
Currently we are achieving 80-85% of planned resource across our UK projects with productivity close to 80%
Coordination & forward planning for all parties has become more important than ever – we must all find time to ensure this is done properly
Supply Chain COVID Survey produced
ISG Supply Chain Virtual Forum
SAFETY MOMENT – BEHAVIOURAL SAFETY IN THE WORLD OF SOCIAL DISTANCING Covid-19 Coronavirus
WE’RE SOCIALLY DISTANCING. ARE YOU?
Here are the four things we are doing on this site to protect from COVID-19:
Only coming to site if we can travel safely, avoiding highly populated public transport and maintaining a two-metre distance throughout our journeys
Not coming to site if we have a high temperature or dry cough, and self-isolating for 14 days
Remembering to keep a two-metre distance from others working on site
Washing our hands frequently for 20 seconds, covering coughs and sneezes and avoiding touching our faces
LOOKING BACK PHASE ONE FORUMS
Good feedback from you
Value to ISG and Supply Chain
Themes: moral issue / confidence, force majeure, payment / solvency, travel, pipeline / opportunities, health & safety (2mSD)
HOW WE HAVE MOVED IN TWO MONTHS…
20th March * UK prepares for lockdown, pubs, gyms, restaurants and other social venues to close
23rd March Lockdown begins * ISG pauses sites * Risk Assessment undertaken to ensure projects are safe to continue * Social distancing measures put in place on all projects
24th March CLC Version 1 issued * no non-essential work within 2m * ISG produce guidance to all projects to comply with CLC
31st March * Letter from The Rt Hon Alok Sharma MP thanking the industry for their efforts during this period
2nd April CLC Version 2 issued * SOP issued reinforcing no non-essential work within 2m (subsequently withdrawn within hours) * ISG commenced work on our COVID-19 Best Practice App to address issues
8th April * PHE guidance introduced the concept of hierarchy which permitted work within 2. * ISG updated guidance and introduced justification process
14th April CLC SOP Version 3 issued * Reinforced PHE guidance issued on 8th April
27th April * ISG produce and share COVID-19 Best Practice App Covid-19 Health & Safety App
11th May CLC Version 2 Issued * Public Health England guidance updated to reflect RPE, travel, face coverings etc
18th May CLC Version 4 issued * Reinforces the PHE Guidance * removes the additional requirement for face to face working 15 mins RPE clarified * ISG updated guidance and published on the COVID-19 Best Practice
SITE SAFE AND OPERATIONAL – NOW
Justification process ISG implemented a justification process to permit work within the 2m social distance zone.
Face covering v RPE.
Covid-19 app Real time Covid-19 information App which can be viewed on phones, ipads and laptops.
The forthcoming challenges HSE are receiving thousands of complaints a week that are being investigated. Testing regimes for those displaying symptoms.
Infrastructure and lesson learnt Created an environment where it is safe for those required to work on site. There have been some valuable lessons during this period! Visitors, RAMS, meetings, less is more.
PIPELINE AND OPPORTUNITIES
Secured work – Preferred – In tender – Target opportunity – Any risk of cancellation
HOW CAN YOU HELP AT TENDER STAGE?
Any other blockers – let us know?
Help us influence design and specification
Let us know where there may be trade / skills shortages
Keep us informed around price increase ?
Keep us informed around product availability
PROGRAMME AND PRODUCTIVITY
We asked you… What have you found? How else can we increase productivity and efficiency?
Importance of data capture
Look back to pre-con / work winning
Manufacture / order / delivery delays