Towards sustainable growth

When most of us think about which section of British industry is most sustainable, especially in terms of its supply chain, many of us might think of the supermarkets with their ‘farm assured’ and ‘red tractor’ labels encouraging us to buy from local farmers.

But those of us in the construction industry know that in many ways we’ve got a lot to shout about too when it comes to supporting a strong and thriving local UK supply chain.

Just to set the scene, at least half of our spend as an industry is with small and local businesses employing 3.1 million people. Every £1 spent with these SMEs generates at least £2.84 of economic output . Our local SMEs are our lifeblood.

And while the supermarkets have been building their reputation for delivering a sustainable supply chain many people don’t know that we have also been leading the way in many areas.

We are the only sector of British industry which has invested in its own dedicated ‘school’ providing training and advice to its suppliers on how to be sustainable.

Of course, this drive to be sustainable is also coming from our customers who want to know that we have a supply chain with us as the economy picks up

The Supply Chain Sustainability School (SCSS), funded by the construction industry with the support of Action Sustainability and set up in 2012 is aimed at thousands of construction businesses and is our way of ensuring our suppliers are learning as quickly as possible about ways to meet customers’ current and future requirements for sustainable buildings and infrastructure.

It helps guarantee suppliers a part in this future. To date, there are over 3200 members and counting. It is a clear success for advancement of the British construction industry.

The SCSS ties in with the latest effort by Government to support SMEs, called the Great Business Exchange. This aims to link the growing number of smaller businesses to more established corporates, helping to open up a world of opportunity to British entrepreneurs, backed by government and Enterprise Nation. Balfour Beatty is one of a number of leading companies which has pledged to support this.

Our desire to bring SMEs along with us extends to payment. It is essential we back up our pledges and good intentions with action where it counts most for SMEs; cashflow. Some contractors have set up a voluntary supply chain finance scheme to achieve faster payment for our suppliers.

This enables suppliers to receive payment more quickly than their formal payment terms, easing their cash-flow, should they wish to take advantage of preferential bank rates.

Other initiatives include the devolvement of pre-paid payment cards, a type of project credit card, enabling suppliers to receive their payment more quickly, especially for those smaller orders.

Many of us have also joined the Government’s Prompt Payment Code to enshrine and demonstrate our commitment to fair payment to all.

Of course, this drive to be sustainable is also coming from our customers who want to know that we have a supply chain with us as the economy picks up and the orders start to come in more frequently.

We need a resilient and sustainable supply chain to co-create smart solutions and compete. That is why some larger contractors, are now reporting specifically on their supply chain local spend in their annual reports.

We view this as a key indicator of our flexibility to respond to more prosperous times.

As the economy recovers we will need all of these things and more to make sure that we successfully carry our suppliers with us to better and bigger markets, but let’s not be under any doubt, our industry is no laggard when it comes to laying the foundations for sustainable growth.

To learn more approach in this area please come and see us at Ecobuild this week.

Nick Pollard is chief executive of Balfour Beatty Construction Services UK