Capital Infrastructure Renewal

Summary

Deecon supported Thames Water on various Commercial Close Out, Procurement and BAU projects across multiple AMPs delivering significant savings. Thames Water is delivering the sector’s largest capital infrastructure renewal programme (circa £4bn every AMP). This client serves over 13.5 million customers in London and across the Thames Valley, pumping 5 billion litres daily through a 140,000km underground network and over 2000 plants across a timeline of 3.5 months.

Situation & Approach

Deecon, under the banner of Efficio and more recently Stantec UK Business, was engaged at Thames Water from 2008 - 2021. Cumulatively, we aided in the sourcing and management of over £14.2bn of capital and operational expenditure, with involvement in every element of their supply chain strategy, systems, processes, policies, procedures, commercial organisation and staff skills.

A programme of operational and commercial excellence began in 2010, supported by a transformation programme to reshape the capital and operational supply chain and commercial team. This drove improved value for money and earned value analysis, increased operational performance, better asset delivery reliability and support delivery of the Operational Excellence objectives. This consisted of 3 phases:

Phase 1: Was focused on reducing the OPEX cost-base by implementing new target operating models (TOMs), alongside best-practice sourcing and commercial processes. The operational transformation was completed within 18 months, with the designing, staffing and implementing a new supply chain and programme management organisation. This created significant savings and supply chain performance improvements, principally in strategic sourcing. Multiple sourcing projects were completed with significant annual OPEX spend reduction. This was achieved by introducing best-practice market benchmarking analysis and automated performance data-analysis capabilities.
Phase 2: Delivered the AMP5 investment strategy. This was a new strategy, tendering and implementing TOMs for the delivery of the AMP. This resulted in a ~22% cost reduction compared to the AMP4 2008 regulatory baseline.
Phase 3: Saw the deployment of the ‘Procurement Engine’ flexible support model to boost capability and sustain changes to supply chain processes. The deployment of the model resulted in incremental savings of over 4 times the original internal business plan. This was achieved by rescheduling projects and applying consultant resources for enhanced sourcing and commercial analysis.

Results

Deecon assisted in running Thames Water’s Supply Chain and Capital Programme Management Office function resulting in improved efficiencies, enhanced supply chain management, whilst delivering ongoing savings
Significant incremental value delivered alongside the long-term sustainable upskilling of Thames Water staff and improvement in business operations