This article originated from the Housing Digital. you can read this article on their website here.
How has COVID altered the procurement process?
Whilst the procurement processes remain the same as they were in a pre-COVID-19 world, there have been changes to the dynamics of procurement the result of which have placed risk and emphasis in different parts of the process. Across the public sector there has been a greater sense of urgency as clients catch up from the downturn of the Summer, causing an increased number of direct awards which has resulted in a reduction in fuller market engagement.
For procurements in certain markets there will likely be new entrants including from SMEs who are responding to new opportunities which in turn places emphasis on the buyer undertaking thorough checks of experience and regular monitoring of financial health.Contractual provisions in respect of payment terms, failure and delays need to be even more mindfully considered in each contract awarded as the risk of business failure is impacted by the pandemic.A greater reliance on technology has made engagement with bidders easier and cost effective which can have a positive effect on the quality of the tenders received.
Supply chains have become more localised as a result of the pandemic. Do you see this as a permanent shift?
Our models have always promoted the use of a local supply chain with locally based contractors carrying out 92% of our landlords’ works. COVID and Brexit have made the supply chain really consider where they source their materials and labour in order to understand how sustainable this is in both the short and long term.
We feel that many of the measures that have been put in place such as local production, training and recruitment will remain and we look forward to working with our partners to enhance this element further through our local delivery models.
How do you manage an ever- fluctuating supply chain?
Communication and relationships are the key.We put as much effort into the relationships with our supply chain as we do with our landlords. We have been in regular contact with all parties during the lockdown and beyond and this has enabled us to understand how the market is being affected byCOVID and ensure all parties were ready to react.
We are in a unique position as we have a wide exposure to discussions throughout the sector with our various stakeholders and this capacity to share makes us a valuable part of the process and thus ensures we get priority on price and more importantly at the moment availability.
What lessons have you learnt from COVID from an operations perspective?
COVID has given us the space to really question how we carry out our day to day role. Our Account Delivery Managers previously spent much of their time on the road between landlord meetings but now have the capacity to virtually meet with several landlords a day, thus making the role more productive and efficient.
I think everyone was also very nervous around a wholesale move to working from home, but the removal of the daily commute and the use of and resulted in greater productivity and wellbeing. There is certainly still a valuable place for physical meetings, but the frequency and type of these meetings has certainly changed and will continue to do so.
What kind of digital transformation have you undergone?
All framework call offs are managed through our Schemes Plus system. This is a web-based application that is accessible from any device with an internet connection. Our operation team interact with the system to analyse the transactions and identify any areas for further exploration with the landlords.
Having the full set of processes from costing to ordering to valuations and invoices in one place has been invaluable during COVID as the common platform has facilitated discussions from all stakeholders during the last few months. The system provides the data and accountability for discussion and we have then embraced the new methods of communication that have arisen from the pandemic to ensure these messages are distributed and actioned.
If you were to go through those first few months of the crisis again, what would you do differently?
COVID has been a game changing event for a generation. I think the first few months gave us something we don’t often get and that was the opportunity to step back and assess how we do things and how we interact with others. There was a lot of trial and error in the beginning to identify our new way of working and this is still going on to this day.
Could we have sped this up, possibly, but I think the evolution of our ways of working and relationships have been because of the way we initially reacted as an organisation and this will continue to develop, putting us in the best place to deal with the unexpected going forward.
What preparations are you making for future spikes or crises, like we’re seeing now?
We are currently working on future demand requirements from the supply chain in the short, medium and long term. The lead times and availability for certain materials are currently being extended by many manufacturers as demand soars and component availability is globally limited. We are therefore working with our landlords to understand their future requirements and place the orders to ensure programmes keep moving as well as sourcing alternatives where appropriate.
We have also been looking at the initiatives that are emerging from government to ensure contractors and suppliers have both the capacity and skillsets to deliver these works as well as develop innovative new solutions. We are constantly reviewing our current suite of frameworks and dynamic purchasing systems to ensure we have the best service providers available for call off and will be refreshing certain procurements in the near future.
What problems do you see persisting in the long-term as a result of the pandemic?
I think one of the areas we could see a change is the appetite for risk. There has been lots of debate around the contractual mechanisms that can be utilised in a pandemic and where the cost of any delays sits. This is leading to redrafting of schedule of amendments to clearly define who carries the risk and how it will operate. We had already seen shifts in the insurance market prior to the pandemic with large increases in premiums or refusals to insurance certain types of works leading to a reduced pool of service providers available to landlords.
We find to deliver an excellent service at a reasonable price the risk needs to be shared between the parties and I hope that the pandemic does not push people to be more contractual going forward.
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