Case Study on Driving Supply Chain Resilience through Procurement

Introduction

The impact of the Covid-19 pandemic since early 2020 and the recent Ukraine war has highlighted the vulnerability of global supply chains for a large variety of goods. As a result, the Education Authority’s (EA) Commercial Procurement Service (CPS) has put in place a number of initiatives and actions to review and improve the supply chains for the critical products purchased by both schools and EA Services.

Objectives

EA’s objectives were to:

  • improve the organisation’s general knowledge of its supply chains
  • Understand the length and complexity of its critical products supply chains within each of CPS’s nine category pillars
    • Business Products and Services Catering
    • Education Resources
    • Facilities Management and Maintenance
    • Furniture and Equipment
    • ICT
    • Major Works
    • Minor Works
    • Transport
  • consider ways of reducing supply chains and thereby reducing the risk of disruption to the delivery of essential services to schools. It was recognised that a secondary advantage to this may be a reduction in carbon emissions.

Actions/Outcomes

CPS considered the stages of the procurement lifecycle and what stages supply chain resilience impacted and should to be considered. It was evident that it impacted all parts of the procurement process from pre-market engagement, initial discussions to determine the procurement strategy for a new tender to the contract management. As a result, the following actions were identified and have been initiated:

  • Undertaking user engagement, supplier engagement and research within the supply market to understand the capability, length, and capacity of existing and new supply chains prior to establishing a procurement strategy for a new tender process.
  • A review of CPS quality management system has been completed to ensure that supply chain resilience incorporates into key documents e.g. the Supply Chain Resilience Model, is built into the Procurement Strategy Quality Management template. This will assist with assessing risk, identifying mitigations, and developing supply chain resilience.
  • As part of the procurement strategy for a new tender EA considers:
    • assessing the supplier’s supply chain as part of the award criteria for tenders.
    • developing a lotting structure, e.g. geographical lots, that may encourage participation from local supply chains, SMEs and the VCSE sector
    • considers awarding some or all products to more than one supplier to avoid reliance on a single supplier
    • Shorter supply chains to encourage local supply chains etc.
  • Include contractual clauses in contracts to ensure accepted suppliers undertake a supply chain mapping exercise throughout their supply chain for EA’s contract to identify and human rights or modern slavery risks and provide mitigation plans, as necessary.
  • Incorporate human rights and modern slavery clauses and requirements into contracts.
  • As part of the management of critical contracts suppliers will now be asked to provide a written supply chain strategy and an annual assurance statement to EA regarding the ethical soundness of their supply chain and their assurance that there have been no violations of human rights or any modern slavery/enforced labour practices. CPS have established a Human Rights register to record all contract suppliers and with details on their human rights/modern slavery policies/statements. The risk level (High, Medium, and Low) in relation to Human Rights for each contract is also recorded within the Contract Register.
  • Supply chain resilience and mapping has been included as part of the CPS contract management guide and training course for EA’s contract managers, this enables the EA to ensure they monitor and manage supply chain resilience during the life of a contract.
  • Triage existing portfolio of contracts by each CPS Category Team, in consultation with its respective Category Council, to identify any risks and associated mitigations to critical contracts.

To assist in the triaging of contracts CPS are currently surveying their top 20% of suppliers to obtain details of their tier one and tier two suppliers for the goods and services provided to EA. The purpose of these surveys is to ascertain:

  • The country of origin, security of supply, any risks to supply and associated mitigating actions or contingency arrangements.
  • Details of any products from a single supplier or limited competition
  • Evidence of having relevant health & safety, quality management, modern slavery, human rights, diversity & equality, ethical sourcing policies

Conclusion

CPS will continue to develop supply chain maps for its critical supplies, identify any risks in the supply chain and initiate mitigations as required to ensure the continued supply of essential items to schools and other EA Services. Through assessing the stages of the procurement lifecycle supply chain resilience will be embedded and drive compliance with PPN 03/21 Supply Chain Resilience and elements of PPN 05/21 Human Rights in Procurement.

Last updated: 20/06/2022