Lessons learned from AMP6 delivery and procurement will help water companies to plan for and manage AMP7 when the time comes – and with some water companies already putting out AMP7 tenders, now is the time to look at your delivery and procurement processes to see if you could improve the way you choose and work with partners for the next stage of development within the industry.
A recent forecast from infrastructure group AECOM suggested that water industry inflation – which has historically been either less than, or in line with, RPI – is likely to rise at a faster rate than CPIH over the next five years. CPIH is a measure of consumer price inflation, which includes an additional measure of owner-occupier housing costs. The measure was re-instated as a statistic by the Office of National Statistics earlier this year. Ofwat’s draft methodology for PR19 proposes that new price controls will be linked to CPIH rather than RPI.
Several factors are likely to influence inflation in the industry over the next few years, including the effects of Brexit, the difficulty in recruiting skilled people into the water industry and potentially higher prices for some core infrastructure materials.
All of this means that water companies will need to be even more innovative, particularly in their procurement planning, in order to be as efficient as possible and reduce risk over the lifetime of the next AMP cycle.
What does this mean for water companies? “Water companies will need to aggressively innovate and more efficiently deliver works in AMP7 since their costs are likely to rise at a faster rate than indexed revenues,” says Edward Day, a Senior Consultant at AECOM on the release of the forecast.
Find ways to improve your procurement success right now:
A better way to project success is to make sure you really understand your needs. This in-depth understanding ensures a smooth procurement process and allows you to get to know your supply chain - and all while instituting behaviours from the very start that promote efficiency, effectiveness and open communication.
This is particularly important on large-scale projects like those which will support AMP7 programmes. You should be looking now at issues that have arisen during AMP6 and identifying what you can learn and how you can do things differently.
Where were you on these issues in the past AMP?
And where are you on these terms for the upcoming AMP?
Clients who were interviewed for our Challenges video are clear that collaboration saves money and time. And that’s not just about doing things a bit more efficiently – big programmes can waste money by having poor procedures and behaviours in place; by switching suppliers rather than managing issues; by not training replacement personnel adequately and by not keeping open channels of communication across all parties – including within the lead company.
You may already be overspending on AMP6 projects, because some of the elements of collaborative behaviour are not in place. Change that for AMP7 by talking to us now. We’ll help you to understand the benefits, and we’ll work with you to convince decision makers that collaboration is the commercially and project-successful way approach to take.
For More Information Contact:
JCP Press Office on: 01252 711025
JCP Website: http://www.jcpconsultancy.com
Notes to Editor:
JCP Consultancy Ltd was born out of John Carlisle Partnerships in 2002 with original board members and shareholders being: David Curtis, David Maxwell, Diarmid de Burgh Milne, Malcolm Newman and Simon Vaughan. Over the coming years both David Curtis and Malcolm retired from the business and in 2014 Diarmid left JCP to pursue new opportunities. For more information on the JCP board members and the company associates, click here.
JCP specialises in helping major clients, contractors and their supply chains realise the benefits of reduced cost, speedier delivery, increased profit and improved relationships from working collaboratively with each other. They have a 91% success rate in helping clients win work. The company has worked with leading names including Network Rail, National Grid, Highways Agency, Welsh Water, London Underground and Thames Water and with Central Government including DfT, BIS, and HMT Infrastructure UK.