Supply Chain DevelopmentA step-change in Supply Chain performance

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Supply Chain Focus Group – 17th September 2014Vic Carlill

Our drivers for change

• Need excellence in our key strategic themes – safe, secure site stewardship, demonstrable progress, and return on investment

• Accelerate hazard reduction, deliver to plan, ensure value for money to the UK taxpayer

• Supply Chain vital link - deliver products and services safely, to schedule, at correct quality and to agreed cost

• Step-change needed in Supply Chain performance, inc. SL’s role• Supply Chain Development programme established to catalyse

and deliver this step-change

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Programme synopsis and next steps

Scope –a step-change in the relationship between SL and the Supply Chain at all levels. Adopt a continuous improvement cycle, embedded from baseline assessment, the measuring of performance and then identifying the need for further supplier assessments and improvement activities.

September to December - mobilisation, design, assessment– Contract awarded to KPMG - Arup

– Partners induction - nuclear safety and culture ,security

– Baseline performance data-gathering of our suppliers

– Review assessment matrix, using best practice and parent body support (AREVA)

– Design assessment method

– First assessment planned November - selected from our Strategic Supplier Relationship identified listing

– Developing training partner resources, KPIs, ROI and performance-tracking models

– Target – up to five assessments by February in first phase

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Principles of our approach

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Assessment

Improvement Activity

Performance Tracking

ROI & Benefits

Realisation

Robust Method

Capability Building

Enabling IT

Socio-Economic

Attitudes & Behaviours

Principles

The assessment process includes technical conformance and operational performance.

Improvement activities are embedded in the normal way of working.

Benefits are tracked in cost, scheduling and maturity.

Supplier performance improvement should be enabled by IT system to support this

Selection and operating principles

• Consistent criteria for qualification and programme roll-out priority – transparent approach to programme schedule

• Selection process – risk, value, medium/long-term involvement• Coaching and training provided to raise standards and build future

preparedness• Behavioural engagement approach to enable innovation• Consolidating existing approaches – single engagement

programme in conjunction with Supply Chain• Integrated approach, aligned with support areas (e.g. Commercial,

EHS&Q)

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Performance tracking

Structured way of monitoring performance - key component of the programme. Three key elements to monitoring:

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Safe, secure site stewardship

Performance-tracking of each supplier / group, using dashboards with consistent KPI structure and metrics that are applicable and appropriate to the area. Metrics aligned with SL strategic goals

Demonstrable progress

Assessments identify improvement opportunities; resulting plans managed within the software platform, including progress against plan and performance outcomes

Return on investment

Jointly find and develop opportunities - save time, effort, cost and resources (benefit for all, no detriment to end objectives). E.g. improving delivery capability, streamlining processes, reducing waste, and / or value engineering

Programme goal

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Team (including the strategic supplier base) autonomously conduct a range of key activities, including assessments and a range of Improvement activities (developmental, proactive, and remedial).

Performan

ce

Maturity