Supply chain strategy

2. Supply Chain Strategy Supply Chain Strategy 3.

ContentSupply chain strategy… Page 4

Transformation… Page 5

Internal supply chain function transformation… Page 7

Transformation opportunities… Page 8

So what does good look like?… Page 9

SME engagement… Page 10

What next?… Page 11

Supply Chain StrategyFollowing on from our corporate strategy, we understand the need for a supply chain strategy to support the delivery of the site’s mission both now and for the future. Our supply chain strategy will support the business in the delivery of the following benefits: • Accelerate risk and hazard

reduction in retrievals by 25%.

• Delivery of annual cost savings of 10%.

• Invest to save to unlock a minimum of £1.0 billion of lifetime cost savings by 2020.

• Improve right first time deliveries and reduce the number of defects.

• Create an organisation able to flex + / - £100 million in any financial year.

• Create a resilient supply chain that supports the local economy.

Our vision is to create a sustainable supply chain that can efficiently and effectively deliver the site mission now and for the future.

We are at a critical point in our history with the completion of reprocessing by 2020 and the transformation of the Sellafield site.It is a really exciting time for us, as transformation allows us to have a clear vision on what drives value in each part of the business, so we can develop commercial arrangements aligned with those drivers and help us all focus on value ahead of process.

Our supply chain is integral to our transformation and success in delivering our mission. With our focus on collaboration, the need for

building long term partnerships that attract investment, our commitment to SME engagement and innovation, our supply chain has never been more important to us.

We have started a procurement process called Programme and Project Partners, bringing together four partners to collaborate with us, to deliver a portfolio of major projects over the next 20 years. We will use the collective expertise

of these partners to help drive the performance and improved outcomes of major projects, to develop our delivery capabilities and to bring about site-wide project delivery improvements.

In addition we continue to improve our established partnerships through alliancing contracts to drive value and reward for our supply chain partners.

Transformation

The following are the seven scope elements through which we are driving transformation:

Tran

sfor

mati

onCapability

Contracting and Delivery

Intelligentclient

capability

Resilient &sustainablesupply chain

Joint venturesand outputs

based contracts

Fit forpurposesolutions

Collaborationand integration

Contractingstrategy

Categorymanagement

Workflowand logistics

Supply Chain

4. Supply Chain Strategy Supply Chain Strategy 5.

Safely and securely remediate the Sellafield site

to benefit the industry, nation

and region.

Agility• Development of the most effective

contracting strategies to drive the right outcomes including:

– Alliancing style contracts – Outcome based contracting.

Collaboration• Committed to attaining ISO44001

– Collaborative business relationships.

• Build collaborative environments which prioritise and accelerate the outcomes that matter.

Innovation• Support and drive innovation

• Be open to new ideas and technologies, increasing the role for our supply chain in delivering our mission.

Efficient and Effective Delivery• Fit-for-purpose solutions

• Develop the confidence in our partners to have the confidence and desire to commit investment, focused on the sustainable delivery of our needs.

Capability• Improve the Sellafield Ltd internal

supply chain capability.

• Build a vibrant, inquisitive and collaborative Supply Chain function.

• Work with the supply chain to bring in specialist expertise.

Internal supply chain function transformationOur transformation within our internal supply chain function is summarised in five areas:

Intelligent client Developing our intelligent client capability, enabling access to fit for purpose solutions, continuous improvement and innovation through the supply chain.

Collaboration & integrationTransitioning to more collaborative relationships with our Partners and Collaborative Framework Providers.

Contracting strategy Develop a range of new supply chain relationships which adapt to our changing needs. This includes the ability to adapt to potential future changes in funding without undermining long term commitment, investment and confidence.

Fit-for-purpose solutions To deliver fit for purpose commercial solutions for the our business needs.

Category management Deployment of Category Management into all key spend areas, starting with the design and manufacture of specific types of equipment and systems for us.

Workflow & logistics To remove the barriers to effective and efficient delivery of goods, works and services, maximising productivity.

Joint ventures Explore joint ventures with the supply chain to utilise our resources in integrated delivery vehicles.

Output based contracting Incentivising contractors on outcomes and enabling their success through effective intelligent client arrangements.

6. Supply Chain Strategy Supply Chain Strategy 7.

Transformation only comes from real changes on the ground.

Transformation opportunitiesWe have already established some small but meaningful opportunities which we are using to achieve “proof of concept”.

As the opportunities scale up, we will accelerate progress towards wholesale supply chain transformation.

We are taking a fresh approach to ‘Make versus buy versus partner’We are defining criteria to enable us to determine whether we hold capabilities in-house, whether we procure them from supply chain partners, or whether we need to build integrated partnerships to deliver the best outcomes.

What does this mean for our supply chain?We will require a resilient and agile supply chain and a change in our approach towards our key supplier relationships in order to maximise mutual value.

This will be achieved through:• Ensuring transparency in our

procurement opportunities via our published procurement plan.

• Investing in the development of good supplier relationship management capability within Sellafield Ltd and ensuring that we demonstrate the right behaviours towards our suppliers in order to optimise key relationships and create mutual value.

• The execution of Output Based Contracting, through effective intelligent client arrangements and incentivising contractors on outcomes.

• Early engagement with our supply chain and recognising supplier capability in order to access knowledge, know how, best practice and innovation.

• Removing barriers to entry for SME’s in order to access breakthrough technologies and innovation.

• Pursuit of “Fit For Purpose” solutions, through strong collaboration both internally and externally with the supply chain to meet Sellafield Ltd business needs.

• Evolution and further execution of Category Management into key spend areas in order to drive change and deliver the right strategies and solutions and the lowest cost of ownership.

• Challenge everything we do in order to remove the barriers to effective and efficient delivery of goods, works and services.

• To explore and create Joint Ventures with the supply chain, deploying the right Sellafield Ltd resources to create an integrated delivery vehicle.

So what does good look like? The supply chain touches everything we do in delivering our mission and we understand how integral and important you are to our continued success.We also understand the obstacles and challenges the supply chain experience and as such are passionate and committed to becoming a customer of choice. This ambition is clear within Supply Chain functions transformation and we have a clear drive and focus on what we need to do to make our supply chain sustainable, agile and innovative to enable us to deliver against our mission.

The things we need to change and deliver are:• A clear robust procurement plan.

• Greater transparency and early engagement.

• Open and honest dialogue.

• Tenders and evaluations undertaken in a timely manner in line with the programme.

• Recognition that an effective supply chain is an extension of our own organisation and the need to shift from our more traditional master slave type relationships.

• A supply chain that enjoy and value working with Sellafield Ltd in a truly collaborative nature.

• Improved forecasting of work to be put through contracts / frameworks to allow the supply chain to invest, mobilise and add value.

• A clear forecast of work to allow supply chain to invest locally and establish a local presence where appropriate.

• Removal of barriers to entry, allowing SME’s to engage direct with innovative solutions and breakthrough technologies.

• A clear route where the supply chain can showcase products, services and new thinking / ideas.

• A safe environment where the supply chain can communicate problems they are experiencing without judgement.

• A supply chain without a singular reliance on Sellafield Ltd, but who understand that they need to adapt and diversify their business in the creation of longer term value with the support of Sellafield Ltd.

• Working in partnership with the supply chain on joint ventures utilising the collective expertise, unique capabilities and knowhow.

8. Supply Chain Strategy Supply Chain Strategy 9.

CollaborationOur commitment to SME engagement has never been greater and we are constantly looking for ways to remove barriers to entry.SME engagementWe also understand how companies want to bring innovation into solving problems rather than just receiving scope of works required to be carried out. We are looking at new initiatives and intuitive technologies that will work as key enablers and a commercial vehicle for SME’s to do business direct with us.

CollaborationCollaboration is a key enabler in the creation and unlocking of significant

value within the supply chain, and as such we are committed to achieving the new ISO 44001 - Collaborative business relationship management systems.

Whilst there is an expectation that all companies working with us will follow the principles and display the required behaviours, gaining the ISO 44001 standard is not a requirement to work with us. Following is a diagram demonstrating the segments and process of working to

the standard.

No longer are we going to use the word “collaboration” without really meaning it. We are committed to deploying the right resources with the right behaviours in order to achieve an aligned approach and the realisation of stunning results. This will add real value to not only our new partnerships but our current frameworks where we will be rolling out the collaborative principles in all we do.

What Next?Building on the strengths of Sellafield Ltd supply chain leadership team, we have made some strategic recruits to introduce into the team individuals with experience working in the supply chain and running their own nuclear supply chain company.Collectively they have a strong knowledge of the supply chain and the challenges they face, a wealth of experience of procurement management and procurement best practice, and enthusiasm, passion and drive in abundance. Thus enabling us to become the Client we aspire to be.

For our supply chain the future looks positive. With a more transparent and accessible Sellafield Ltd, you will be able to have a better view of the opportunities that are available and how to access them. Where there aren’t opportunities for your business, it will free up your capability, to enable you to diversify into other areas and industries.

We are delighted to launch our new initiative LINC with Sellafield Ltd, based on the Dounreay model, it is a scheme set up to encourage small and medium enterprises (SMEs) at a local and national level to collaborate with each other to deliver innovative solutions that support the Sellafield Ltd site mission. This will enable us to remove barriers of entry to our SME community and allow them to solve our problems with innovation and new ways of thinking.

Should you want to discuss any of the opportunities or require further information on how to do business with us or how we may be able to support you on diversification, in the first instance, contact our Senior Supply Chain Manager whose contact details can be found below.

We will continually commit to 6 monthly updates on our Supply Chain strategy, how we are delivering against it and new initiatives and focus.

Emma- Jayne Gooch

Senior Supply Chain Manager

supply.chain.enquiries@sellafieldsites.com

10. Supply Chain Strategy Supply Chain Strategy 11.

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Sellafield, Seascale, Cumbria CA20 1PG UK September 2017