John Adams

Group Procurement Director

Barratt Developments

Supply Chain Management

22nd March 2016

John Adams

Group Procurement Director

Barratt Developments Plc

Topics

• Importance of supply chains

• Creating a supply chain

• Managing a supply chain

• Improving a supply chain

An approach to Supply Chain Management

This is not a lecture ……. just some food for thought !!

Importance of supply chains – Current context

• Increasing volume, improving quality & reducing cost

• Capacity constraints

• Inflationary pressures

• Changing customer needs

• Changing legislation & performance requirements

• Sustainability agenda

• Need to innovate

Where to start ? – Designing a supply chain

First step in creating a responsive supply chain is to design it!

• What do you purchase?

• Who from?

• What do you need from your suppliers?

• How do you select suppliers?

Data Management

Selection Criteria

Barratt Journey

Start point – Acquisition of David Wilson

• Each of the 27 Divisions had its own coding practices plus 2 ERP systems

• Fragmented, poor, missing and duplicate data

• Suboptimal and overlapping framework agreements across Group

• Lack of spend visibility

What did we do – Data management ?

• Mapped, integrated supplier and transaction data for Barratt and David Wilson

Homes

• Cleansed, backfilled, normalised and de-duplicated to a consistent output

• Ensured a unified coding system for information completeness

Data improvement / maturity

• Supply chain includes manufacturers, distributors, contractors and subcontractors

• Lack of subcontractor spend visibility at transactional level (sub contractor supply &

fit)

• No insight into what actual cost for discrete materials

A complex supply chain

• Understood distributor, contractor, manufacturer supply chain

• Achieved better insight into what they were paying for discrete materials

• Gained a complete, granular picture of spend across Group

What did we do – Selection criteria

• What is important?

• Create clear list with prioritisation / weighting

• Score each criteria

• Compare relative performance

Output

+ =Supply Chain Strategy

&

Supplier Selection

What did we get

• Supply chain with managed structure

• Rationalised products and suppliers across the entire Group

• Achieved total spend visibility across Group

• Optimise framework agreements with suppliers

Supply Chain Management

• Communicate, communicate, communicate !!

• Set clear objectives & priorities

• Demand forecasting

• Measure performance

• Accept you influence supplier performance

• Cooperate

• Continuous improvement culture

• Challenge

• Engage

• Listen !

Are all suppliers pigs ???

• Who are you “strategic” suppliers ?

• How do you differentiate ?

• Why do you differentiate ?

• What do you do differently / additionally ?

• What is the benefit ?

Barratt Approach – Key Suppliers

• Annual supply chain conference

• Regular performance monitoring

• Business review process

• Innovation forums

• Ongoing engagement

Performance Improvement

• Performance improvement has to start with performance appraisal

• Acquire reliable feedback – data

• 360˚ feedback preferable

• Identify need for improvement

• Share with supplier

• Create action plan

• Monitor implementation & results

Summary

• Supply chains significant impact on performance

• Good SCM will help meet challenges

• Don’t let your supply chain form by accident – create it!

• Data is your friend in whatever form

• Are all suppliers equal ?

• Communicate, communicate, communicate

• Set clear agenda’s and priorities

• Encourage cooperative working

• Measure and review performance

• Set culture of continuous improvement