Interview with Birse Civils Business Improvement Director Gary Wright

Date of Birse

Nearly a year after unveiling his master plan to give Birse Civils the leading edge over its rivals, business improvement director Gary Wright updates Ross Pearman on its progress.

As with any successful secret formula, it needs time for planning, for testing and then for announcing it to the masses.

In November last year, Birse Civil's business improvement director Gary Wright broke cover after 15 months to talk about his plans to take the company's continuous improvement to another level. This followed his departure from the Highways Agency after 12 years' service.

Now, nearly a year on, Wright has left his testing lab to shed further light on his progress and what he feels is now making Birse a leading-edge contractor.

All of this has been achieved against the backdrop of Balfour Beatty's £32m purchase of Birse Group, which was finalised a fortnight ago and saw Birse's shares de-listed.

"Although it is still early days, I have been encouraged by Balfour Beatty to press on with what I have been doing. Nothing in my role has changed and there are no indications that it will," Wright quickly adds, anticipating questions over whether the move into Balfour will disrupt his innovating for Birse. "It's business as usual for Birse Civils."

With the line firmly drawn in the sand, Wright turns the conversation back to the work he has been doing to deliver the 1.5% margin-improvement target for the end of the 2007/08 financial year.

"There has been a lot going on since November on the core improvement initiatives relating to company performance management and supply chain management," he says.

Performance act

Wright's first success has been his plan to develop an improved approach to performance management in Birse Civils. Under the new approach, all of Birse Civils' five regional offices are encouraged to monitor their performance against up to three KPIs associated with each of the company's five high-level aims.

These aims are: safe operations customer expectations exceeded industry-leading profits and controlled turnover growth successful employees and recognition and respect within the industry.

The progress of each region is monitored using a new performance tracking system, reviewed each month, and published on a dashboard-style progress chart.

"Each of the regions have met their targets," reveals Wright. "For example, the South East is performing particularly well on safety, with no accidents in the last year.

"The main emphasis of this approach is that everyone gets clarity on the core business aims and how we are doing against them.

"Our people can't get away from our aims. They're on the walls, mouse mats and screen savers - they're everywhere. Every six months, our progress against these aims is posted across the business, including all Birse sites. Some companies might feel uncomfortable with such data being made widely available, however, we are a very open organisation."

Wright adds that the captured data is now being used more and more when submitting tenders.

"Whether we use it will depend on whether the customer asks for details of company performance. However, it is too early to say if our new approach is actually helping win work, especially as Birse is naturally strong when it comes to tendering."

On radicalising the approach to supply chain management, Wright and his team have spent the whole of June and July trialling a new £150,000 plant management system, designed by software provider ARK e-management.

The system allows Birse to order and track every item of non-operated plant and equipment. Most of this, around 45%, is supplied to Birse by A-Plant under a five-year sole supply agreement.

Around 20 preferred suppliers meet the rest of Birse's plant and equipment needs.

The plant-management system includes features regarded by Wright as the first of their kind. The main innovation is the seamless integration with A-Plant's point of sale system. Whenever A-Plant's call centre correctly raises an order for a Birse site, A-Plant automatically receives a matching Plant Hire Order from the Birse system. "This is extremely efficient and provides the perfect start for tracking plant and equipment," says Wright.

Plugging the leaks

Birse Civils predicts that the new approach will save around £500,000 on what it spends on plant each year. Last year it spent in the region of £5m.

The bulk of the savings come from preventing what Wright terms as "leakages" from sole and preferred agreements. This, Wright believes, will give the firm the edge over its rivals. "We've always been very good at setting up competitive deals, the new system ensures that these deals are fully utilised across the business."

"Foremen will now no longer need to fill out plant order paperwork, this will be sorted out centrally and automatically sent to suppliers and sites.

"They will also receive regular reports that show when equipment was ordered, delivered, off-hired and collected, with comments about any damage or the condition of the kit.

"This not only saves time on paperwork, but also on arguments over damage/loss and when equipment was actually delivered or collected. With this system, we not only know what kit is on our sites, but what is pending delivery and collection."

Currently, four of the 40 Birse Civils live sites have the new system up and running, although Wright is expecting to see the full savings accruing by November, as all of the sites go live by the end of October.

Lessons learned from this will then be fed into Wright's next area of focus: purchasing materials.

Material gains

"The system can be easily adapted into materials purchases. By placing all materials purchases on the system, we will be essentially logging our purchase history and we will build up a comprehensive national picture of materials supply and the best deals achieved."

Wright likens the system to What Car? magazine with its 'target price' for customers to aim for when buying a new car.

"Once we can quickly retrieve and review the deals that are being achieved across Birse, we can more easily take this into account in the buying process.

"I want to use the system to help our buyers get closer to the best deal every time."

As with plant, Wright expects to save around £600,000 on an annual materials spend of around £20m.

Birse Civils currently has a number of materials framework deals, but it is also considering the viability of a sole supplier agreement, similar to the A-Plant deal, that might form the foundation for further mutual benefits through efficient integrated processes and systems.

Asked whether this approach will be an obstacle for clients that demand the use of local supply in their bid documents, Wright didn't see this as a problem.

"If the situation were to arise, we will have better information to more easily compare the deal from a local supplier with a national supplier. Ultimately, we will supply whatever the customer wants."

Looking to the future, Wright explains that the principles will spread further down its supply chain to subcontractors and professional services.

"That's my target area for next year," he adds. "As you can tell, there is a lot to do, but we have come a long way."

The plant management system

For A-Plant, the aligned order system for plant with Birse Civils will provide an estimated extra £150,000 a year in turnover.

"There will be far less leakage by using this sophisticated system than with other sole supplier or preferred supplier agreements," says Paul Fereday, managing director of plant and tools at A-Plant. "The system provides better record-keeping of kit and it will make Birse Civils even more efficient."

Fereday says the new system will not mean a greater security of payment for A-Plant. He also adds that the way the agreement is set up, the prices negotiated with Birse Civils will be non-negotiable in the future.

"If Birse Civils' workloads drop in one year, it doesn't mean that we can increase our prices accordingly. It is also not linked to market forces."

Despite this, Fereday says he is more than happy with the arrangement now in place, which is reviewed annually under the contract conditions.

"Getting the deals in place takes a long time, about three months in all. As with any good idea, it takes time to put it together. A lot of people talk about such ideas, but find it too tough to get off the ground. We wouldn't enter into an agreement that wasn't sustainable."

[Contract Journal, 30 August 2006, p 7]