Network Rail Infrastructure Investment Supplier Conference

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Network RailInfrastructure InvestmentSupplier
Conference

• 14 November 2007

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General Housekeeping

• Fire Exits
• Mobiles blackberries
• Refreshments and lunch
• Breakouts
• Departures
• Follow up to today

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Follow-up

• Feedback request forms will be emailed
• Slides will be posted out
• All comments will be noted and either answered or
  fed into the breakout sessions for discussion
• This is not a one-off event

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Agenda

• Introduction Objectives of the Day Simon Kirby
• Overview of CP4 Plan Simon Kirby
• Supplier Engagement Model Ian Ballentine
• General Comments from RIA Jeremy Candfield
• QA
• Video
• LUNCH
• Break-out
• Track
• Signalling, Power and Comms
• Construction
• Enhancements Major Projects
• Close (approx 1600)

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Network RailStrategic Business Plan
LaunchSupplier Conference

• Simon Kirby
• Director Infrastructure Investment

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Today. . .

• Engage
• Understanding
• Start to evolve our supplier strategies for CP4
• High level vision of how we wish to engage with
  you
• Be seen as the client of choice
• who engages
• who evolves
• who delivers sustainable best value
• Ensure you see this is an developing journey,
  that you can be part of

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Network RailStrategic Business Plan
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High Level Output Statements
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HLOS and Scottish HLOS

• Reduced carbon footprint
• Safer and more reliable
• Catering for a more diverse, affluent and
  demanding population
• Increase todays level of passenger and freight
  traffic
• 7-day railway on key routes
• Whole life costs
• Gives better value to users and taxpayers

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An industry response
Strategic Business Plan
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Developing the SBP together
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Overview of Requirements

• Safety
• 3 further improvement
• Reliability
• PPM up to 92
• Narrow gap between best and worst services
• New Severe Delay measure (30mins)
• Cancellations reduced by a third
• Capacity
• Targets for each route
• Morning peak into major centres
• Whole life asset stewardship

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Specified Projects

• Thameslink Phase 1 December 2011
• Thameslink Phase 2 December 2015 with new train
  fleet
• Birmingham New Street
• Reading
• Completion of West Coast Strategy

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Specified Projects Contd

• Continued development and start of rollout of
  In-Cab Signalling
• Completion of Radio System (GSM-R)
• Infrastructure works for InterCity Express
• Stations Upgrades
• Money for small schemes and to help segregate
  freight
• Passenger Information Systems

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Scottish HLOS

• Major Projects
• Glasgow Airport Rail Link 2012
• Airdrie-Bathgate 2010
• Borders Railway 2011
• Potential enhancements
• Edinburgh-Glasgow route improvement
• Electrification
• Other route capacity schemes

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Efficiency improvement
Targets need to be challengingbut realistic

• We assume
• 30 by end CP3
• Further 18 in CP4 in most areas
• Offset by 1 pa real input price increase

• Our projections are based on detailedbottom-up
  analysis
• They also take account oftop-down studies

100
90
80
70
60
50
40
30
20
10
0
2003/04
2004/05
2005/06
2006/07
2007/08
2008/09
2009/10
2010/11
2011/12
2012/13
2013/14
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ORR Roles

• Review our Asset Policies
• Challenge our proposed volumes of work
• Challenge our proposed unit costs
• Determine how much we should be paid

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Next steps

• This is an (important) input to the review
• Detailed challenge and review by ORR
• Continued dialogue with the rest of the industry
• Update in some areas in April
• Draft conclusions in June
• Final conclusions in October
• Control Period 4 Business Plan in March 2009

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Challenges

• The challenges are clear
• Improving efficiency on top of 31 in CP3
• Improving reliability after reaching 90.4 in CP3
  
• Delivering 2 billion p.a. enhancements plus
  renewals
• Moving towards a seven day railway
• This depends fundamentally on
• Our peoples ability to achieve change
• Effective partnership with the rest of the
  industry

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Delivering the Plan
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Delivering the SBP together
Ambitious
Exciting
Extensive
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Growing investment
CP3
CP4
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Edinburgh Waverley
Expertise
Capability
Track record
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A busy marketplace
Long-term planning
Communication
Co-operation
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Thameslink
26
Reading
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Birmingham New Street
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Freight
200m
Significant schemes
Southampton - West Coast
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Scotland and Wales
Big TransportScotland schemes
A B Photo needed.
500mSouth Wales resignalling
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21st century turnouts
Modular installation (on flat bed)
Controlled build
Delivered in-gauge
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21st century stations
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High output machinery
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Line-side neighbours
5 million people
Changing work practices
Behaviours
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Stations
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Long-term planning
Planning beyond CP4
Network Rail must bringa long-term view
Engagement
Waterloo redevelopment
36
Long-term assets
Long asset lives
Whole life approach
Future Railway
37
Building the future railway
Pride
Partnership
Today is the start
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Supplier engagementmodelIan BallentineHead
of Contracts Procurement
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Market engagement maturity model
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Market engagement maturity model
Range of where the final engagement position can
be
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Network Rail supply chain charterOne team, one
goal- delivering sustainable best value
Network Rail aims to-

• Provide the environment for the supply chain to
  effectively operate within enabling world class
  supply chain practice, transparency, joint
  strategic development, and helping develop
  professional and long-term mutually beneficial
  relationships
• Act as a single customer with a fair, consistent
  and defined way of conducting business with the
  supply chain
• Provide a safe, reliable and efficient railway
  fit for the 21st century

Throughout the Network Rail supply chain, we
expect us all to-

• Always provide a safe and healthy workplace for
  our employees and the public
• Work together within a collaborative one team
  delivery environment
• Deliver whole life best value through efficiency,
  effectiveness and innovation
• Deliver the work to the agreed time, cost and
  quality
• Deliver solutions that truly satisfy our
  stakeholders
• Define, inform and manage risks together
• Not blame, but work together to resolve, learn
  and improve
• Not tolerate continued poor performance
• Manage the requisition to pay process in a timely
  and efficient manner
• Treat all assets as if they were our own

• Abide by the principles identified within the RIA
  Value Improvement Programme Code of Practice
• Provide an appropriately trained and competent
  workforce
• Work together in eliminating waste and be
  environmentally smart
• Be decisive, and communicate in a timely, concise
  manner
• Give each other support and share information and
  ideas where appropriate
• Be determined, passionate and take pride in our
  work
• Value and harness the diversity of all our staff
• Always treat each other with respect, integrity,
  honesty and openness
• Promote and celebrate success
• Work together in making the rail industry a place
  where people want to come and work

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Network Rail aims to . . .

• Create a world class supply chain that can
  operate effectively and efficiently
• Develop an environment for long term mutually
  beneficial relationships in order to eliminate
  waste and inefficiency
• Develop joint strategies
• Act as a single customer, in a fair and
  consistent manner
• Provide a safe, reliable and efficient railway
  fit for the 21st century

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Our values are . . .

• Provide a safe and healthy workplace
• Abide by the RIA VIP Code of Practice
• Working together as one team to deliver whole
  life best value
• Define, inform and manage risks together
• Dont blame identify, improve and learn
• Dont put up with continued poor performance
• Eliminate waste and be environmentally smart
• Work together to make the rail industry a
  workplace of choice
• Communicate, be open, honest, respectful and
  supportive
• Be determined, passionate and take pride in the
  work we do
• Value the diversity of our staff and encourage
  innovation
• Promote and celebrate success
• Invest in our staff
• Pay on time

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Communication success

• Roll this charter out both internally and
  externally
• Various media forms aimed at addressing the
  varying levels of our workforce
• Briefings, roadshows, internet, leaflets etc
• Defined KPIs set to measure-
• the spread of the charter
• its embodiment
• its maturity over time
• KPIs created through various mediums such as
  surveys, direct data and informative trends

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General comments on July 2007 supplier conference
feedback

• Broken Apps Certs payment process
• Poor enquiry documents
• Little time allowed for completing tenders
• Poor relationships behaviours
• Traditional style TCs

• New KPIs system re-programme
• Guidance docs, templates training
• Upstream influence better planning
• Supply chain charter
• Templates, training evolution

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Strategic Business Plan 2007 RIA Review

• 14 November 2007

Jeremy Candfield Director General
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RIA

• 140 member companies, both rolling stock and
  infrastructure
• manufacturers, ROSCOs, contractors, consultants
• great bulk of NRs rail industry supply chain by
  turnover

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Objective

• a realistic determination
• too tough short-term detriment to suppliers,
  long-term damage to whole industry
• too soft wastes SOFA resources otherwise
  available for enhancements
• indeed, in last ACR, RIA strongly emphasised
  scale of efficiency gains achievable

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Further Gains

• limits to how much more suppliers can contribute
  by themselves
• UK supply market already very competitive
  domestic / actual international / potential
  international
• significant further gains likely to require
  step-changes in process and in innovation
• effectively achievable only by NR and suppliers
  working together

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Working Together

• Plan volumes have been discussed
• Innovation Summit announced RIA AGM 26/10/07
• Much dialogue NR / RIA
• The Value Improvement Programme

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The Value Improvement Programme (VIP)

• A programme of facilitated workshops, based on an
  agreed Code of Practice, designed to drive waste
  out of the railway industry by promoting cultural
  behavioural change within and between supply
  chain parties clients, suppliers and
  sub-suppliers
• It works by enhancing mutual communication,
  openness, honesty and respect between clients
  suppliers
• It can be tough for participants, but nearly all
  say it is a better way and the effort worthwhile
• It was initiated by RIA and is bought into by
  Network Rail

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VIP (2)

• Of the 60 workshops held across the industry to
  date, around 40 were between NR and suppliers
• Of late mainly in the Signalling and Telecoms
  discipline
• Feedback from both NR and suppliers has been very
  positive
• Recent user comments

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VIP (3)

• Rod Moorcroft Network Rail Programme Manager
  -said about VIP on the 63m Lincoln re-signalling
  project
• The VIP process was a big success and a
  massive positive factor in achieving a
  successful August 07 Blockade.
• It enabled the various different parties to
  improve behaviours and jointly identify plan
  around key areas of risk.

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VIP (4)

• Alan Barker - Westinghouse Project Leader for
  Lincoln said
• Meeting the August 07 Blockade would have been
  much more difficult without VIP. 
• It provided us a with an integrated focus and a
  plan to succeed.
• It improved both internal and external
  stakeholder relationships.
• We will continue to use and support the VIP
  process.

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VIP (5)

• The key principles of VIP are increasingly
  reflected in NRs own policy initiatives eg the
  new Suppliers Charter
• This is very welcome we are working together
  and in the right direction
• BUT timing is a key issue culture is deeply
  embedded on both sides, and fundamental change to
  culture is not accomplished overnight

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SBP Review Concerns

• How long-term strategic issues are addressed, eg
  electrification
• Timing assumptions likely to be central
• Care needed with international comparisons
• Our own resource availability

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SBP Process

• Network Rail Supplier Briefing today
• Series of RIA working groups
• Will be able to review eg asset strategies,
  volumes, efficiency gains, input price
  assumptions, contracting strategies
• Council dialogue with ORR submission in January