Supply Chain Structure Case Study
The Client had several framework contracts in operation that were not delivering the value for money benefits expected. The Client was unable to identify the issues due to internal relationships that existed with the framework suppliers at different levels of the organisation.
Stenmoore were tasked with:
- Reviewing the structure of the framework contracts
- Reviewing the operational management of the contracts
- Developing a change programme to address the issues and improve performance
We needed to understand some fundamental aspects of the framework contracts:
- Why were the framework contracts established – what were the objectives?
- Did the Client have too many framework contractors?
- On what basis are projects allocated to contractors?
- Who makes the decision on which projects are allocated to which contractors?
- Who manages the relationship with the contractors?
- Who is responsible for the Tier 1 and 2 contractors?
In conjunction with the Clients Procurement Director we developed a process to build an understanding of the issues:
- Stenmoore structured and managed a series of workshops to examine the existing supply chain structure and identify the need for change
- We also held a series of meetings with the framework contractors to establish what was wrong with the existing arrangement and what needed to be changed.
Upon completion of this process we issued a report and methodology to deliver significant performance improvement.
The report included:
- A comprehensive analysis of the framework structures and their operation
- Identified the arrangements with the Tier 1 and 2 suppliers
- Analysis of who had responsibility for managing the framework contracts – both internal and external to the Client organisation
- A Route map for driving change and improving performance
We were also able to identify savings in both cash and efficiencies of approximately £545,000 annually by restructuring the framework contracts.