This area of the Merlin web portal provides examples of best practice in supply chain management applied by prime contractors. Ordinarily these are examples identified by Merlin Assessors in the course of their assessment work, but if your organisation would like to share examples of its own best practice here please get in touch. New examples of best practice will be added here from time-to-time as they are identified, so please keep checking back. The hope, in sharing these examples, is that they might be adopted, and ultimately become standard practice, right across DWP's supply chain.
This article sets out the key strengths and areas for development from Phase 1 and 2 of the Merlin Pilot Assessments conducted on Work Choice Prime Contractors. Information used in this report has been pulled from the assessment reports of both Phases of the Pilot assessments carried out in 2011.
It should be noted that the findings reported here are common across the majority of Prime Contractors which were assessed. However, it cannot be assumed that all Primes share the same strengths or areas for development. Examples have been given for each key finding and it should be noted that these examples are drawn from a number of assessments which share similar findings. Individual Prime Contractors have not been named within this report, though some specific examples have been given where necessary and appropriate.
Clear strategic commitment to improving supply chain practises; some very effective procurement and selection processes.
Most Primes were able to demonstrate a commitment to improving supply chain practises. For the majority of organisations, the focus of improvement has been on procurement and selection processes with some good practice starting to emerge. Procurement processes are being established which are proportionate and flexible enough to cater for the individual needs of smaller providers whilst still maintaining objective and lucid selection criteria. Communication of the Prime’s expectations, selection processes and selection rationale is improving and some significant improvements could be seen when Work Choice and Work Programme procurement rounds were compared with Primes able to clearly demonstrate the results of review and improvement strategies.
Some examples include clear Expression of Interest documents, alternative routes for organisations which may not be able to complete a traditional Expression of Interest, good interpersonal engagement throughout the selection process through individual and group meetings and the use of supplier framework arrangements.
Most Prime Contractors were able to demonstrate a commitment to making further improvements to the manner in which they engaged with and managed supply chain partners. Many Primes have newly established positions at a senior management level with a specific responsibility for supply chains. Other organisations have instigated particularly effective and consultative supply chain forums, allowing supply chain partner organisations to contribute to proactively to the manner in which the supply chain is managed. The roles and responsibilities of Primes and supply chain partners have been clearly defined and understood to ensure that consultative management approaches remain structured and lead to genuine improvements for all parties. Generally, this kind approach is particularly well received by supply chain partners.
Some good practice regarding review of the wider social impact of supply chains is starting to emerge.
A limited number of Prime contractors are able to demonstrate a review and measurement of the wider impact of service delivery within their Contract Package Area(s). Primes are increasingly considering the wider community and holistic customer needs when designing supply chains.
Some Primes are starting to put in place mechanisms to measure Social Return on Investment and the environmental impact of delivery and customer activity. There are limited examples of organisations employing detailed environmental and social impact measures. In addition, delivery centres within the Prime are set targets for social and environmental impact as well as job entry and sustained employment outcomes. This has led to a reduction in “creaming” and “parking” and an increased focus on customer need and measuring “soft” outcomes.
Whilst it is acknowledged that encouraging customer well being is an inherent part of Work Choice delivery, there are some examples of organisations which are proactively engaging with GPs and other local health care services to measure the impact of employment (permanent or work trials) on customer well being.
Clear performance review processes are in place and consistently applied with some particularly positive and effective working relationships between individual contract managers and supply chain partners.
Most, if not all, Prime Contractors have performance review processes in place for supply chain partners. The nature and scope of these varies considerably from Prime to Prime. However, the most effective review processes were those which were sufficiently differentiated and took the needs of individual organisations into account, underpinned by positive interpersonal relationships between Prime and supply chain partner representatives and very clear communication.
There are some examples of performance being openly discussed across the entire supply chain with the objective being that any issues can be openly discussed and resolved together. Feedback from supply chain partners regarding the sharing of performance data (including that of the Prime) was very positive.
Some Primes have a more flexible approach to performance review where the relationships between organisations are positive and based on mutual trust and a general sentiment of being “in it together”. This can be equally as effective as a more rigorous and structured, formal approach. However examples of this working to best effect are limited.
Key Areas for Development
Insufficiently robust Quality Assurance arrangements
Most Primes were unable to demonstrate an adequate understanding of and response to the difference between Quality Assurance, compliance and contractual performance. Generally, Primes are focussed on monitoring compliance and are neglecting the quality of the customer experience. Furthermore, quality assurance activity is inadequately promoted or practiced within supply chains. A very limited number of Prime contractors were able to accurately describe the quality of the customer experience within sub contracted delivery.
Where Quality Assurance processes are in place, the findings of these are not effectively used to inform and improve service delivery. Primes are not actively planning for improvement or benchmarking their expectations. Some Primes have satisfactory Quality Assurance arrangements in place internally, but have not applied these within the supply chain.
Primes have inadequately defined their expectations with regard to supply chain partner organisations’ responsibilities for effective Quality Assurance. In most instances, Quality Assurance (and to a lesser degree, compliance) arrangements in place within sub contracted provision have not been tested at any stage (selection and procurement, implementation or live running). This has resulted in significant variances in arrangements throughout the supply chain and a nebulous approach to planning for improvement. Few supply chain partners were able to describe how the quality of their provision was monitored by the Prime.
The majority of Primes have instigated some level of compliance monitoring, broadly consistent with the approach taken by DWP’s Provider Assurance Team. In most cases, monitoring (and the findings of monitoring activity) has been designed primarily as a tool to facilitate better preparation for PAT audits rather to drive improvement or manage risk effectively. Many Quality Assurance and Compliance functions within organisations are under resourced and monitoring activity is limited in scope and/ or intensity.
In some instances, the Prime has included Quality Assurance and Compliance within their performance review structure. However, there is limited evidence of meaningful discussion or action planning arising as a result. This is largely due to the fact that quality assurance activity is not resulting in meaningful analysis to enable and facilitate these kinds of discussions and the effective management of improvement measures.
Inadequate promotion of Safeguarding, Health and Safety, Equal Opportunities and Environmental Sustainability within the supply chain.
Whilst most Primes had adequate policies, processes and practices in place internally to promote Safeguarding, Health and Safety, Equal Opportunities and Environmental Sustainability within their own delivery; these were inadequately communicated, utilized and monitored within the supply chain.
Most Primes carry out some basic checks that the relevant policies are in place (i.e. that they exist) during due diligence and/or EOI processes. However these are not supported by a robust review of how supply chain partners use and adhere to these policies subsequent to contract award. Supply chain partners are not sufficiently aware of the Primes’ expectation regarding these key issues and information regarding policy, legislative or statutory requirements is not adequately shared within the supply chain. This has, in some cases, resulted in sub contractor organisations being unaware of key changes to policy or legislation which may have far reaching consequences (e.g. changes to staff clearance and Safeguarding requirements made in February 2011).
The collection and analysis of Equal Opportunities data is inconsistent within supply chains. Some organisations are not collecting data at all, whilst others have begun collecting data but it is unclear how this data will be collated, analysed and used to inform delivery. Many Primes do not have a cohesive strategy in place to manage these processes. In some instances, management information systems are not designed to cater for the collection of this data.
Insufficiently clear supply chain design rationale and a lack of understanding of how the supply chain will continue to develop and work effectively.
Primes are unable to support their supply chain design with a clear rationale underpinned by thorough, specific research and consideration. In the majority of cases, Work Choice supply chain market share has been allocated according to capacity and geographical coverage rather than specialist capability, local customer need or performance history. Primes are not effectively seeking or using smaller or specialist delivery partners to augment end to end provision. Supply chains for Work Choice largely maintain the status quo of previous Work Step/Work Prep delivery. This has potentially resulted in a lack of innovation in the delivery approach. Most supply chain partners do not clearly understand the rationale for market share allocation.
In addition, there is a general lack of understanding around how supply chains will continue to work and develop together and remain fit for purpose throughout the life of the contract. Though Primes have committed to the improvement of their supply chains, it is not always clear how this will manifest itself in practice. Very few Primes have clear plans in place for continuous review of their supply chain over the life of the contract; assuming that the supply chain will remain static. There are few mechanisms in place to continuously review customer need, quality of provision and performance to ensure that market share is allocated to achieve the best possible results. Further more, despite recent improvements; most Primes are not in a position to respond quickly and easily to changes in supply chain needs. For example, Primes do not have responsive processes in place to replace organisations within the supply chain, planning instead to re-allocate customer volumes to remaining organisations (including the Prime) even where this has a negative effect on delivery and the organisations involved.
Limited evidence of consultation and collaborative working taking place within supply chains.
Some Primes have been particularly proactive in consulting with their partners on the design of systems and processes, but these examples are limited. Providers within Work Choice supply chains are not yet working together effectively to improve performance and the quality of service delivery. All the supply chains include organisations which could offer significant value to the entire supply chain but in most instances, these organisations are not being encouraged to share their expertise and experience. Furthermore, providers are not being encouraged to move customers through the supply chain to get the best possible benefit from the different services available (and ultimately improve self sufficiency and job readiness).
Whilst some Primes have taken a consultative approach to managing their supply chain, recommendations and improvements which have been borne out of this approach have been focussed on improvements the Prime can make and are not looking more broadly at issues which affect the entire supply chain. There are very few examples of supply chain partners working together to solve a common problem.
Much like the pilot assessments carried out on fND Prime Contracts in summer 2010, the Work Choice assessments have presented some common themes. In some instances, this is due to the timing of assessment and it is noted that providers which were assessed towards the latter end of the assessment cycle performed significantly better in some respects than those assessed early. This is mainly due to having the opportunity to embedded policy, process and approach. Whilst 21 assessments have been completed under the Merlin pilot, it remains difficult to pin point specific good practice examples without compromising confidentiality and provider anonymity. The publication of individual assessment reports on the Merlin Web Portal will help facilitate a more transparent sharing of good (and poor) practice in the future.
The following examples of good practise were identified as part of DWP’s consultation with a sample of voluntary sector organisations which applied to be included in the supply chains of potential Prime Providers bidding for the Work Programme.
These examples of good practice have enhanced providers’ chances of success in securing contracts as a sub-contractor for the Work Programme.
Some providers have shown evidence of analysing their strengths and proactively identifying elements of the Work Programme they can deliver.
Providers have also made good use of websites such as this Merlin Standard Web Portal to access its provider database and the templates for provider profile and Expression of Interest, which can be submitted electronically via the website to Prime providers.
Proactive providers have also made extensive use of the Department for Work and Pensions, Supplying DWP website, which was set up to support Primes and sub-contractors and provider.
There were also good examples of providers utilising the websites of preferred bidders and other providers to garner useful information.
There are excellent examples of proactive marketing of providers’ services to potential primes and expressing interest in collaborative delivery.
Providers took opportunities to meet Primes such as networking events, local launch and ‘speed dating’ events, one to one and/or small group sessions.
There were also examples of providers obtaining information from and contacting other organisations operating in their locality to explore areas of cooperation, resulting in sub-contracting partnerships.
Several requests have been made for illustrative examples of good practice that underpin a number of the conclusions contained within the Merlin Summary Report, published following the fND pilot assessments in the summer of 2010.
Summarised examples of good practice are as follows: -
Self Assessment and Supporting Evidence
In the best self assessment examples evidence was well presented, clearly labelled, indexed, systematically organised against the principles of the standard, and cross-referenced to the Self Assessment Review, with specific areas highlighted;
Site visits were well prepared, with informed scheduling of interviews to include time for evidence review.
Supply chain design
Supply chain models and delivery design were informed by extensive primary and secondary local research, using a variety of desk based and face to face methods, and by utilising partner and customer forums.
Some Primes employed diverse and innovative ways of understanding customer and locality needs, including customer feedback forums, targeted surveys, and meetings with specialist organisations outside of the supply chain.
Examples of innovative interpretation of the ‘black box’ managed to achieve both an extensive range of services and good value for money, through careful consideration of supply chain design.
Best examples of sourcing and engaging organisations deployed a variety of methods including on line, newspaper, and specialist publication advertising, open networking events, and consultation with staff and customers within the Contract Package Area utilising their extensive local knowledge.
Innovative supply chain examples had wide scope and variety, targeted resource towards hardest to help groups, explored and utilised alternative funding sources, and up-skilled internal resources to address local gaps in provision.
Some primes invested considerable resource in proactive research to identify specialist deliverers outside of the existing Welfare to Work market, and provided financial support to enable market entrance, to ensure holistic customer needs are met.
Innovative approaches in pre- and post-contract award processes and payment structure included proactive engagement to understand supply chain needs in terms of payment and contractual arrangements, and action to address barriers to participation, offering, for example, sharing of premises and resources.
Limited good examples of consultation informing supply chain practice and processes included evidence of active engagement and consultation with supply chain partners from the outset and on-going, engendering a one team ethos across the entire supply chain, and a sense of shared ownership.
Strong examples included provision of constructive feedback following unsuccessful Expressions of Interest as a matter of course; whereas poor practice examples had no mechanism for doing so even on request.
Some Primes provided excellent examples of capacity building and development of supply chain partners, including provision of front loaded funding, interest free loans, shared infrastructure, support achieving security compliance, and provision of staff training and development activities.
Good practice to ensure contractual expectations are understood included issue of comprehensive Service Level Agreements, written summaries of contractual obligations, and detailed process and policy guidance.
Best examples of effective interpersonal relationships between prime and supply chain staff extended to senior level, and were supported by recruitment strategies for careful selection of key partnership staff.
Established or pro-activity in establishing, corporate Continuous Improvement strategies provided best evidence of a culture of CI within supply chains.
Good practice included evidence of holistic approaches, incorporating regular supply chain feedback, robust and supportive quality assurance, and positive focus, embedded throughout the supply chain.
There were good examples of clear and unambiguous communication at the early stages of procurement and delivery. This included documented evidence of detailed aide memoirs issued pre- and post-contract award outlining expectations, and clearly explained rationale for subsequent changes.
Best practice examples include development of corporate strategies for reviewing and evolving the supply chain as customer needs are reviewed and reassessed; robust feedback mechanisms; and detailed understanding throughout the organisation of supply chain strategy.
Strong examples of consultation and collaboration in problem solving include supply chain forums established to address specific or common issues; effective networking & signposting to facilitate customer journey between providers; and sharing of best practice.
Good examples of Primes effectively measuring distance travelled by customers and considering customer well being include: effective MI & caseload management systems; ring-fenced funding for services to encourage well-being; and actively promoted customer well being policies.
Other evidence of good practice is of peer observations and feedback; and the introduction of vacancy sharing policy throughout the supply chain.