Putting the customer first: the shift to an outcome-focused supply chain

October 26, 2018

Jonathan Harry, Procurement Director at Tarmac

The UK’s £600 billion infrastructure pipeline presents substantial opportunities for our sector. It also poses a significant challenge. Together with the pressing demand for new housing, there is an unprecedented requirement for the construction industry to deliver major new projects both efficiently and economically.

This is a collective challenge and one that does not sit with clients and tier one contractors alone. Delivering high-productivity, low-carbon projects at competitive costs requires innovation from every part of the supply chain.

Crucial to unlocking innovation and value in the supply chain will be behavioural change. Clients and asset owners have a responsibility to deliver this in the first instance, but we should all look to drive this agenda as we engage with suppliers of all sizes and disciplines. Progressive procurement and the adoption of management models that enable and reward high performance are key to encouraging innovation.

It’s important that perspective changes from an output-focused supply chain to one that is outcome-focused. This goes beyond consideration of ‘the bigger picture’ and recognition of one’s own place in the world of contracting. It is the end user – the building occupant, the driver, the homeowner – that we must all keep in mind. Essentially, this means ensuring that the customer is always right at the heart of a project from the start.

An outcome-focused approach is already beginning to generate success in the utilities sector, where regulatory bodies such as Ofwat and Ofgem are directing the water and energy industries to become more consumer-centric. Incentivising companies to engage suppliers for innovation encourages invention to drive efficiency and ultimately benefits the end user. It will be up to us, the construction industry as a whole, to invigorate our own sector with this approach.

Innovations are already being seen on major infrastructure projects, with a move away from just building and maintaining assets to providing better customer outcomes. Embedding this mindset across our industry will require every part of the supply chain to have a clear vision of the overall project and desirable end user outcomes, not only consideration of the closest step in the supply chain.

Consider a highways project – our industry is continually fighting against time. Tight possession windows aside, the economic implications of prolonged road closures are well understood. Accordingly, greater innovation might be the way that a supply chain partner can introduce small improvements to cut project timescales.

Tarmac, to take just one example, has developed Ultilow, a range of low-temperature asphalts that offer improved workability at 40ºc lower than conventional hot asphalt. This reaches trafficking temperature faster than the regular equivalent, allowing earlier reopening of carriageways. The positive customer outcome is that a project finishes as early as possible, keeping busy roads moving with minimal disruption to users.

Developing customer-focused solutions is at the heart of Tarmac’s technological innovation. Our commitment to customer experience is why earlier this year we launched the Innovation Challenge: an initiative that rewards our supply chain partners for sharing ideas to deliver better client and customer outcomes. Encouraging a culture of collaboration and meaningful engagement helps us to support the knowledge and innovation present in every part of the supply chain.

Whether a multinational company or an SME, every business has the power to improve the delivery of the UK’s construction pipeline. By collectively anchoring our activity in outcomes rather than outputs, we can ensure creativity and innovation become integral parts of the supply chain and our customers get the best solutions.