Railway Strategies Supply chain Conference Working With Achilles

Introduction

Andy Harrison Director – Rail and Transport Achilles Information Limited

Contents

! Supply Chain Management and Why It Matters

! The Challenge – Attaining, Maintaining and Retaining Supplier Accreditation

! Accreditation in Practice – Link-up v.2

Supply Chain Management & Why It Matters

It’s All About Risk!

EVERY…..

60 seconds, a supplier’s risk profile changes 8 minutes, a supplier files for bankruptcy 3 minutes, a supplier ceases operations (Source: Dun & Bradstreet)

Risk Reduction

Health and Safety Corporate Responsibility

Financial

Legal / Statutory

Risk management issues

Compliance

Scarcity of Supply

Data Control Environmental

Focus on HSQE Issues

Hatfield Rail Disaster, UK, in Oct 05 " Network Rail fined £3.5 million " Balfour Beatty fined £7.5 million " Operator / contractor jointly implicated " Total costs for operator over £700 m " New corporate manslaughter bill (UK) Network Rail now require that all contractors & suppliers undergo an Achilles audit before they can work on site

Corporate Responsibility Management During the 1990’s Nike’s brand image was severely damaged by a series of reports about the conditions of it’s suppliers’ factories. Reports focused on:" Poor factory working conditions " Child and forced labour " Health and Safety Achilles collect CR information on critical suppliers. Along with Nike, Achilles are an active member of the United Nations Global Compact

Performance Management ! Need to know how your Supply Chain is Performing " Allows clarity for new entrants " Allows right selection criteria to be in place " Enables informed dialogue with Supply Chain to deliver improvement

! Win-Win for both Buyers and Suppliers " Suppliers know what you want " Can work together to deliver improvements " Collaborative Approach can spread improvements quickly

Increased Quality of Supplier Information Keeping ahead of the game on… Risk management Cost reduction Global sourcing Supplier relationship management Scarcity of supply Compliance / document management Continuous improvement Analysis and reporting

Increased Quality of Supplier Information …requires Market leading Supplier Management Services delivering: Up to date, authenticated supplier information " Company commercial, financial, asset category, HSE, CSR, legal Supplier risk profiles & metrics Supplier benchmarking and performance feedback Market intelligence & audit capabilities

Compliance With Legislation

! Any Supplier Management and Accreditation scheme also needs to: " Enable Buying Organisations to comply with relevant legislation " EU Procurement Rules " UK Legislation " Support organisations in knowledge sharing " Enable communities to influence legislators

Sourcing Processes

Need to: " Deliver Reduction in Administration & Costs for all concerned – Buyers and Suppliers " Deliver Right Suppliers, Right Services, Right Standards " Need to be transparent on Supplier Capability and Buyer Requirements " Need to be consistent

Fact!

A recent Aberdeen Group study has identified that: 50% of organizations do not have any formal metrics or systems to measure supply risk 45% have a lack of supply market intelligence 38% maintain insufficient visibility into supply performance & risk

The Challenge

Attaining Supplier Accreditation

! Buyers need to:" Understand and Define their needs – What do they buy, how do they buy it? " Define their selection Criteria – How do we want to select our Suppliers? " Apply a system – Existing systems in many sectors - Achilles

Attaining Supplier Accreditation

! Suppliers need to:" Understand their own offering and the Buyers requirements " Accept and Understand Buyers selection criteria " Use the Buyers chosen system

Maintaining Supplier Accreditation

! Buying Organisations " " " "

Need to use their chosen system Communicate Understand Supplier needs Listen!!

Maintaining Supplier Accreditation

! Suppliers " Provide and Maintain their information " Match their capability to Buyers requirement " Communicates

Retaining Supplier Accreditation

! Buyers " Uses the agreed system in a transparent way " Engenders trust by consistent application " Lets contracts and communicates this – allows forward planning by suppliers " Accepts the unwritten contract – if you comply you will get tender opportunities

Retaining Supplier Accreditation

! Suppliers " Work towards improved performance – bars should get higher – basic Buyer need. " Focus on what they are best at – gives best chance of success " Engage wherever possible

Accreditation in Practice – Link-up v.2

Statistics

Established in Norway in 1990 20 offices in 17 countries

7 Industry Sectors

Achilles Operations

Achilles Group Office

310 employees worldwide

Achilles’ Background

! Leading provider of collaborative supplier management solutions to supply chain communities ! Turnover more than $40m with stable, profitable, organic growth ! Neutrality and credibility are key to our business model ! Achilles core capabilities provide a blend of: " " " "

Community development and collaboration Health, safety, environment, corporate responsibility and quality expertise Data handling and information management Technology development and global operations

! Many of our systems have developed into global standards

Community-based Model

Cost lines without a common solution

…With a common solution

Achilles

Unsustainable

Sustainable

Following the Model - Link-up v.2

"Buyer – Network Rail has understood and defined their needs – What do they buy, how do they buy it? 01 Signalling

Service CO NSULTANCY

Product PRO VIDE & UNDERTAKE

SUPPLY M ATERIAL/

Design

Operate

DESIG N

O PERATE

PRO DUCT/ PLANT

ASSEM BLE

SERVICE

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Name

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HPSS

1002

Clamplock Points

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Point Machines

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Mechanical Backdrive

1005

Powerlink Backdrive

1006

SO (Hydraulic Backdrive)

TEST CO M M ISSIO N

DEM O LISH

& DECO M M .

Support, Maintain REM O VAL & DISPO SAL

INSTALL M O DIFY

Points Machines - Electric & Hydraulic

Code

Building, Installationand Testing CO NSTRUCT BUILD

M AINTAIN SUPPO RT REPAIR

REFURBISH REFIT O VERHAUL

CLEAN

DISM ANTLE DISASSEM BLE

CON

SER

SMP

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MRC

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Following the Model - Link-up v.2 "Defined their selection Criteria – How do we want to select our Suppliers? ! Dynamic Questionnaires " Code Justification Questionnaire - this is not used for assessment scoring " Supplier Profile Questionnaire -Scoring for assessment is based on these sections ! Audit " Proof Audit – Supports and verifies responses in particular areas

Following the Model - Link-up v.2 "Applied a system – Link-up v.2 - Achilles

Supplier

Complete

Buyer

Product Codes

Quality Checking

Search

Foot Print

Supplier Profile Validation

Question Set

Code Justification

Link -up v.2 Proof

Following the Model - Link-up v.2

!Supplier Community is:"Understanding their own offering and the Buyers requirements "Accepting and Understanding Buyers selection criteria "Using the Buyers chosen system

Over 500 companies already using v.2 Registration

Thank You