Anglian Water won the 2017 Utility Week Supply Chain Excellence Award for its @one Alliance. As part of a series of case studies looking at the Award winners, Utility Week looks in detail at the initiative.
- Category title: Supply Chain Excellence Award
- Award winner: Anglian Water
- Title of project/initiative: the @one Alliance
- Annual company turnover: £1.2 billion
- Number of directly-employed staff: 4,000
- Entry criteria:
- Quality of entry – clear, evidence-based.
- Clear goals set for the project that were met or exceeded.
- Evidence of collaboration with the supply chain.
- Measurable benefits for the business, both directly in relation to this partnership and more broadly.
- Evidence of ongoing learnings for the business and its supply chain.
The Anglian Water @one Alliance is a collaborative organisation of consultants, contractors and extended supply chain partners, working together to deliver more than half of Anglian Water’s capital investment programme.
By the end of the sixth asset management plan period (AMP6), which ends March 2020, the @one Alliance will have delivered around 800 schemes worth £1.2 billion. These schemes will cover designing and building of water treatment and water recycling centres, as well as improving and maintaining water mains and sewerage networks across the East of England.
Anglian claims the model allowed it to set “radical and ambitious” goals such as halving carbon. This, it says, has galvanised its engineers, and led to an “explosion” of innovation in digital technologies.
Moreover, the results of alliancing and collaboration can be clearly measured. It has reduced carbon, reduced cost and helped keep customer bills low.
What was the scale of the initiative?
The @one Alliance delivers projects on behalf of Anglian across its entire portfolio. More than 50 per cent of the water firm’s AMP6 schemes have been or are being delivered by the alliance.
Anglian is the biggest water company in the UK by geographic area. The firm claims its alliance model and approach to supply chain management is “held up as best practice” by companies and experts across the engineering and construction sectors globally.
What was the target group?
The @One Alliance is a “revolutionary concept” in supply chain management built on collaboration. It has become the driving force for innovation across Anglian’s business and the supply chain sector.
It is not aimed at any one target group, because it is a concept rather than a project. It has, however, achieved certain, targeted goals such as reducing carbon and reducing cost, which have helped generate efficiencies and keep customer bills low.
Why this approach?
Having worked in the traditional way with contractor partners for each individual infrastructure project and seeing the learning and knowledge that was lost each time a new job was started with a new contractor, Anglian believed it was possible to take a more collaborative approach which would stimulate investment in innovation, and fundamentally retain learning within the organisation so it would benefit future schemes too.
After a fresh look at its approach to supply chain management, the first alliance took the company away from the traditional project-by-project client and supplier relationships found in the rest of the industry, to true partnerships with collaboration at their heart. Having proven successful at that early stage, it has since grown and evolved to the alliance model it is today.
What were the initiative’s KPIs?
The alliance delivered on all its performance targets for AMP5. It achieved: 30 per cent efficiency gains (22.5 per cent target); 54 per cent reduction in embodied carbon (50 per cent target for 2015); and 26 per cent reduction in operational carbon (20 per cent target for 2015).
Anglian says achieving its carbon KPIs has only been possible because of the relationships and shared goals of its @One Alliance.
For AMP6, the company has set even more stretching targets, including a 60 per cent reduction in carbon by 2020, and the alliance is on course to supersede these. Other KPIs include halving time in construction, and 75 per cent on-time delivery – for which the industry benchmark is 60 per cent.
Longer term, Anglian is working to become carbon neutral by 2050. This is a huge challenge, not least because delivering water and sewerage services makes the company one of the biggest energy-users in the East. Nevertheless, it intends to achieve its goal by reducing its own emissions rather than carbon offsetting.
How was creativity demonstrated?
Total incentivisation
After proving the success an alliancing model could bring, Anglian launched 15-year contracts with its @One partners and introduced a completely new system of incentivising them for their work. Partners in @One now only make a return when they outperform. If they underperform, the opposite is true.
This “total incentivisation” model is unique and means the @One partners need and want to invest and innovate – they have a vested interest in finding new, more efficient ways of working.
Innovation
The fact the @One Alliance is delivering half of Anglian’s £2 billion capital investment programme means learning is not lost between construction projects.
Halving carbon in construction demanded a fundamental step-change in the company’s approach. The challenge inspired engineers within the @One Alliance and across the business and led to an explosion of innovation in digital technologies, construction techniques, the development of standard products and new ways of working. For example, below ground – the company adopted technologies to repair and replace pipes and equipment without needing to dig, and above ground – it avoids building new assets by maintaining and reusing existing ones wherever possible.
Landmark schemes
Thanks to landmark schemes such as Raithby water treatment works and the Grafham resilience scheme, the @One Alliance is settingnew industry standards.
Anglian’s water treatment Works at Raithby, Lincolnshire signified a step-change when the company challenged the project team to build a new works for the same embodied carbon as a refurbishment of the existing one. It resulted in a radical rethink of the way sites are designed, built and operated.
Anglian claimed Raithby is one of the most eco-friendly water treatment works ever built in the UK. Its carbon footprint was reduced by 55 per cent, and it sailed through local planning, despite it being in an Area of Outstanding Natural Beauty, thanks to its strong eco-credentials and beautiful design.
The company says it has achieved similar savings at many other sites, including the huge new extension to Cambridge water recycling centre, where the project’s carbon was reduced by 64 per cent.
What has Been the impact on the company?
In 2008, Anglian made a collective commitment to halve embodied carbon. By 2010 the company had begun to work on this target through the @One Alliance and, in 2015, it had achieved the goal.
Having proved the success an alliancing model could bring, Anglian now has an array of different alliances covering its entire supply chain and business, from water and water recycling maintenance to IT.
The company has also set its sights on solving more altruistic problems through the @One Alliance. Together, the company’s partners are helping benefit deprived parts of its region, donating to WaterAid and taking their expertise overseas to countries like Nepal to help deliver safe drinking water to millions more people.
Who was involved?
The alliance works closely with Anglian Water operations teams and other key stakeholders.
In addition to the Anglian Water asset delivery team, the @One Alliance partners are Balfour Beatty, Barhale, Mott MacDonald Bentley, Stantec, Skanska and Sweco.
Were there any hurdles along the way?
Halving carbon was an ambitious goal, and Anglian says it was only through collaboration, a total alignment of goals and leadership throughout the business, and a belief that it was possible that the company was able to engage engineering colleagues to meet the challenge.
What was the cost of the initiative?
The @One Alliance is delivering half of Anglian Water’s £2 billion capital investment programme. As per the total incentivisation model, partners in @One now make a return when they outperform.
What the judges said
The judges said the winning entry was about more than a single project – it demonstrated an industry-leading way of working strategically with the supply chain.
Chris Newsome, director of asset management, Anglian Water
“Alliancing has been recognised as best practice by the World Economic Forum’s report on Construction and through the IPA’s Infrastructure Client Group, and now also Utility Week. This true model of collaboration, a total alignment of goals and leadership and focus throughout the businesses has achieved great results which we’re proud of, but we’re far from complacent the journey continues. We’ve extended the collaborative alliancing model to all areas of our business and have set even more stretching targets in carbon reduction.”
The Utility Week Awards are held in association with CGI and Capgemini.
The 2018 Utility Week Awards will be opening soon. Sponsorship opportunities are available – contact Utility Week business development manager Ben Hammond on benhammond@fav-house.com or 01342 332116 for more information.