Anglian Water's alliance - a strategy for success

In 2009, Anglian Water set up an alliance of organisations to deliver part of its Asset Management Plan 4 (AMP4). The alliance model produced improved performance in the first contracts it was applied to - particularly in terms of efficiency and capital carbon targets.

Water depth measure
Water depth measure

How the AMP6 routemap was put into action

Anglian Water used the routemap to review the proposed strategy for the procurement of the alliance and the supply chain. The review was undertaken early in the overall process (eight months before the first contracts were to be let), to test the principles of the proposed model and to ensure that any gaps could be sufficiently addressed and incorporated into the existing development plans.

The AMP6 routemap review adopted a consolidated approach to information gathering. This was followed by a structured workshop session that included representation from senior management and the existing supply chain. Independent input and facilitation was provided by IUK and the University of Leeds.

The views of key stakeholders were used to stimulate discussion and the outputs of the routemap assessments, and the implications for strategy development, agreed as a group. Tailoring the routemap methodology to suit the project stage and the desired outputs is key to getting the most from any routemap application.

Key outputs

A number of key outputs were identified in the review. These included:

  • The importance of strategic alignment and the ability to clearly articulate the respective benefits of the approach for all partners and suppliers. This involves first understanding the varying business drivers and different 'types of work' required from the market
  • Although the existence of cultural blockers had been identified when compiling the improvement initiatives for AMP6, the actions required to overcome those blockers had not been specifically identified
  • The critical dependency between a contracting model, that sought benefits from greater integration of the supply chain, and the AMP6 initiatives that required a different way of working, such as industrialised construction
  • The need for a more coherent change programme that ensures the various elements of wider programmes are integrated into a sequenced, deliverable and focused delivery plan - in this case an execution strategy (see below). The execution strategy was an important part of Anglian Water's approach and a cornerstone in delivering the new Alliance model

How did Anglian Water act on the routemap review

Following the workshops the change programme was reviewed to ensure that all potential blockers were covered off by actions - ones designed to provide the right cultural and organisational change. These were then integrated into a more comprehensive programme. The overall change programme evolved from one where key risks had been identified, to one that included specific programmes to deliver underlying cultural change.

An exercise was undertaken to map the entire supply chain for AMP6 (and beyond), from strategic sub-contractor to equipment suppliers. This mapping highlighted the different capabilities needed to deliver this new way of working and included capabilities outside the traditional water industry supply chain.

This subsequently led to a procurement programme that included a greater degree of market making - assessing cross sector capability and introducing new supply chain partners that could support the changes required in AMP6. The procurement strategy also identified the appropriate commercial model for each part of the alliance supply chain, with a general shift towards greater collaboration and incentivised contracts.

What did Anglian Water achieve as a result?

  • Greater alignment of the overall alliance strategy with Anglian Water's key business requirements. This alignment was reflected in the proposed commercial model for the Alliance and in the performance structure for the extended supply chain
  • Integration of the key improvement initiatives, such as supply chain management and industrialised construction. Significant work had been undertaken in developing improvement initiatives for AMP6, but the added focus on an overall execution strategy provided a more coherent delivery plan that better integrated the initiatives into a single programme
  • Greater alignment and timing of initiatives. For example, completing the sign-off of business requirements and outcomes before structuring the main procurement activities
  • The AMP6 delivery plan includes targets for over 20% efficiency, a further 20% reduction in capital carbon (on top of the 50% delivered in the previous AMP period) and a 40% reduction in construction time

Notes:

This review was commissioned by Anglian Water and carried out in April 2013 by Infrastructure UK and the Engineering Project Academy, University of Leeds.

Find out more about the project initiation routemap.

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