Carillion cuts 50% from supplier base

Swingeing cuts to Carillion's supply chain will see its civils and construction supplier base slashed by 50% over the next two years.

The move is part of a radical overhaul of Carillion's supply chain, which has already seen the original supplier and subcontractor base reduced by a third since 2000. Now Carillion plans to lose a further 50% of its suppliers by 2005.

Supply chain director Ian Wollam told CJ the cuts are part of a programme aimed at streamlining Carillion's relationships with its suppliers and subcontractors.

He said the programme had resulted in "substantial savings" so far but declined to say how much. Wollam said the overhaul is driven by the desire to deliver a safer and more efficient service.

"Safety is Carillion's number one priority," he added. "And we need to demonstrate this by working with people who have the same aspirations. This method gives us a greater chance of delivering safe and sustainable projects."

Wollam said Carillion is looking for specific attributes in its suppliers and subcontractors. He said: "We want subcontractors that are committed to safety, innovation and quality and to a culture which is open, performance-focused and strong on supply chain management."

Wollam said the reduction in Carillion's supply chain base would be a gradual process governed by a selection process that will be "robust and objective".

He added: "We have a responsibility to make the process as transparent and fair as possible and to give our specialist subcontractors an opportunity to make it on to our lists. What we will not be doing is taking suppliers off our lists overnight."

Wollam also warned that the selected firms will not be able to rest on their laurels. "This is an ongoing process. We need to ensure our suppliers are flexible to any changes we might need to make to our working practices, so there will be times when there are promotions and relegations."