In the frame

How is FSD involved in the water industry?

Field Systems Designs (FSD) is a nationwide electrical contractor that primarily works in the utilities sector. Around 60% of its annual turnover is provided by the UK water industry and it works with many of the major civil and process firms in this field.

What prompted the water industry to adopt framework agreements?

Under the regulation of OFWAT, the English and Welsh water companies have now entered their fourth period of Asset Management (AMP4). This operates from 2005-10 and seeks to improve clean water and sewage quality while demonstrating value for money.

Each of the water companies within OFWAT's remit are being driven hard to reduce costs and a strong supply chain management strategy is seen as a key vehicle in delivering this. As a consequence, many of the major UK water companies have entered into large-scale framework agreements with civil and process contractors for the AMP4 period.

How have firms involved in the industry reacted?

One particularly successful contractor during the AMP4 period so far is Biwater Treatment. Electrical framework manager John Heighway comments: "We recognised that effective supply chain management is a key factor in enabling us to deliver best value to our clients and meet the requirements for AMP4.

"In achieving best value it is essential that we establish the right supplier relationship, ensuring we provide strategic suppliers with the ability to ‘buy in' at an early stage of a project or programme of work. This facilitates the opportunity for them to use their expertise and influence solutions to add value in the project development process.

"As part of a company-wide review of our procurement processes our electrical supply chain was identified as an area with significant opportunity to bring benefits through early supplier involvement.

"In selecting its preferred suppliers a process was implemented to ensure that selection met all of the business requirements for this activity.

How are civil engineering contractors interacting with the m&e sector?

Adversarial types of contract have been forgotten in favour of close working relationships and a focus on joint project goals

One of the civil engineering contractors, Costain, has been extremely successful in many areas of the industry and the AMP4 period. Its water business supply chain manager Mark Harvey is encouraging about its commitment to firms like FSD: "Through our experiences in AMP3, we have recognised that the supply chain forms a critical part of the delivery process. To achieve improved results in AMP4 Costain is seeking to develop deeper, long-term relationships with fewer suppliers."

How has FSD approached the partnering issue?

When partnering kicked off, FSD, together with many of our customers were keen to adopt this new way of working. Frankly none of us were entirely ready for it and our honest dialogue was sometimes lost and all too often total value was not being considered in favour of cheapest initial price.

We have gone a full circle now and commitment to this cause, often using jointly developed key performance indicators, has established partnering as the norm rather than the occasional deviation.

We have worked hard to develop our own supply chain and sought to build relationships with sideways competition. Partnerships have been formed with Anord Control Systems, a switchgear and motor control centre manufacturer and systems integrator Adsyst Automation.

These relationships enable FSD to offer its water industry clients a complete solution to their electrical needs. Clients have a single point of contact and a consequent reduction in their project management costs.

Adversarial types of contract have been forgotten in favour of close working relationships and a focus on joint project goals. Risks are discussed at the start of the contract and mitigation strategies developed accordingly.

What benefits have been gained from working in framework agreements?

The FSD and Anord partnership has been successful in the Thames Water region. Biwater was quick to recognise the benefits of the arrangement and placed an order on the FSD Anord joint venture for a major scheme at Carrickfergus, Northern Ireland.

John Heighway at client Biwater Graham JV comments: "Our working relationship is excellent, with both FSD and Anord demonstrating commitment and adopting a proactive approach. In particular, the FSD/Anord joint venture has worked well with most installation issues being handled within their joint venture without significant input from Biwater Graham personnel."