Thursday, 1 August 2013

When catching the wind meets strategic procurement

Last night I heard Michael Fallon trail on Newsnight that developers of large wind farms would have to provide the government with detailed supply plans under the new Offshore Wind Industrial Sector Strategy - the idea being that UK jobs would be delivered.

Today the strategy was announced and procurement features heavily (I quote from the press release):

£20 million from the Regional Growth Fund for GROW: Offshore Wind, a new Manufacturing Advisory Service programme to support the UK supply chain to become more competitive by offering tailored support from specialists
£46 million funding over five years for the Offshore Renewable Energy Catapult Centre to join up innovation between industry, government and academia and help companies to bring new products to market
Industry-led initiatives to share information with the supply chain about their procurement timelines and contracting decision points
A proposal that would require developers of offshore wind farms above a certain size to produce a supply chain plan before they can apply for a Contract for Difference – long-term contracts to provide stable revenues for investors in low carbon energy projects – setting out how the project and procurement approaches will encourage a wider, more diverse supply chain and support innovation and skills.

This is great stuff and clearly using procurement strategically.

I really like the idea of using the Contracts for Difference as a way of incentivising the development of plans for sustainable supply chains. If it works it will be a real winner for the UK government but, as I have said so many times, there's a big difference between the rhetoric of a plan and implementation.

The action plan has procurement strategy written all over it and would be a useful template for other organisations to reflect on - give it a read if nothing else. Yet I have some big questions:

  1. Who will review, critique and risk assess the proposed supply chain plans to make sure they are not just aspirational but have a high probability of achieving the desired outcomes? 
  2. What happens if the market doesn't respond with supply chain plans?
  3. Who will then have responsibility for performance managing the implementation of the supply chain plans - not just taking the praise for achievement but being personally accountable for failure to deliver?
  4. There is a lovely summary of actions, yet when you look under the heading 'By When' you see a remarkable lack of clarity - what are the actual dates for completion of the actions? 
  5. The proposals for measuring success appear to be far too woolly - what baselines will be used to demonstrate actual success?
  6. The idea is that the strategy will deliver UK jobs and a sustainable industry, that's great, yet how can there be such confidence that the benefits will not be transferred beyond UK shores?
  7. It seems slightly bizarre to have a strategy using procurement, and in parallel the announcement of the new Crown Commercial Services, yet at first glance neither the Government CPO nor the CCS appear to have any role in the implementation - why is that?
I really do think the strategy is good yet I am reminded that Michael Fallon was going to use procurement to correct some of the retail sectors supply chain ethics way back in April - what happened next?

It does strike me that both Vince Cable and Michael Fallon understand strategic procurement and its potential, but that is seldom sufficient, there is a need for change management, performance management and 'grit'. Without those we risk just having procured hot air.  

1 comment:

  1. Great post Gordon - unfortunately neither BIS nor DECC have historically been Departments that had particularly strong procurement / commercial functions. Not being rude about current leadership, I don't know the situation well enough. But there's no history of serious procurement capability there as there would be in MOD or DWP for instance. Partly a size thing of course. But your fears about implementation rather than concept are well-grounded I suspect. And as you say, maybe a perfect opportunity for CCS to prove itself in its new role.