“There’s a lot of risk, and people are moving the risk around and getting other people to take it on rather than sharing risk and sharing rewards,” Byrne says. “If we both fail, all of us lose. If we [collaborate to] make money or do a project faster, we all win.” She points to the number one automaker in the world as an example: “Toyota makes investments in suppliers. They know what they’re going to get every time they use them.” The suppliers also know where their next order is coming from and have a major stake in the outcome. Byrne says that when suppliers aren’t providing input into a project’s life cycle, the people making buying decisions may not understand the actual requirements, resulting in rework.
Costs versus value As procurement has matured from focusing on cost to maximizing value, the thinking has progressed from “three bids and a buy” to finding strategic ways to manage an integrated supply chain to benefit an entire enterprise. Certainly there is recognition within the industry of the benefits of an “all for one, and one for all” approach. Wayne Prins, Alberta director for the Christian Labour Association of Canada, says their motto is based on cooperation and partnership—a modern style of labour relations—unlike the more traditional adversarial relationship between business and labour. The Construction Owners Association of Alberta—project owners, engineering firms, construction firms, labour providers, and other parties with a vested interest in the construction industry in Alberta—promotes “advanced workface planning.” That’s detailed planning to organize the complete process of construction, from engineering to commissioning, so all the requirements are at hand on time. In its holistic thinking, it parallels supply chain management. For the Alberta Supply Chain Working Group to gain momentum, “what we need is the early adopters who understand something needs to be done,” Byrne says. “We’ve started to see movement for change. [Owners] know there are issues with the contracting process, with staff and training requirements, with all the [baby boomer] retirements.
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Some companies are doing some stuff, but it’s not across the board. The purpose of the group is to bring them together to discuss what they see as the issues and what can be done to help move the dial a little.” With the problems nailed down and some ideas out on the table, the working group is “hoping by January or February to have some tangible things to report on. We hope to see some changes in the contracting process by next summer or fall,” Byrne says. Funding comes from the Alberta government and JWN, owner of the annual National Supply Chain Forum. “Publishing companies are in the content business—information, education—and the ones that do it well, at times, have to lead the conversation,” says Ian MacGillivray, director of events and conferences with JWN. “How we enhance and optimize the energy supply chain really is an important topic. For example, we go back to the peak of all the development in ’05, ’06, ’07, there were lots of projects and labour shortages. What that highlighted was a breakdown in the supply chain.” Trade associations and industry groups “can only talk from one perspective,” MacGillivray says, “but we connect a lot of these dots. We put on events, interview people, bring people around the table and have a conversation.” B2B
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