Digitally Connected Supply Chains

A digital tool that allows supply chains to deliver performance not just products.

Last updated: 6th December 2021

Date uploaded:

Approved for use

Innovation Lead: Liam Winder
Project number: 104787
UKRI funding: £331,068


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Summary

Much of the whole-life value of a building is determined by the supply chain that creates it. A digital tool showing what clients want an asset to do, not just what they want it to be, means suppliers are better able to see whether requested product specifications will deliver desired outcomes. This enables everyone in the supply chain to suggest changes to components or alternative products that will improve performance, considering the whole context of a project. 

Innovation type: Digital, Procurement
Organisation type: Innovative SME, Manufacturer, Private sector client, Supply chain

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Project pioneers

Professional Construction Strategies Group Limited (PCSG) is a built-environment consultancy with experience in using data to help clients better deliver and operate their built assets. It saw that making access to desired outcomes available throughout a digitally connected supply chain could result in a better built environment.  

The problem

Suppliers often feel disconnected from the project they are providing products and services to. Specifications passed down through supply chains are usually based on what components procurers think they want, heavily influenced by what they’ve purchased before. This misses opportunities for suppliers to recommend more up-to-date versions or alternative solutions that can contribute to improved asset outcomes.

Vision

An outcome-based procurement platform (OBPP) that enables everyone in a construction manufacturing supply chain to collaborate on delivering desired project outcomes; such as net zero targets, productivity goals, the health and safety of construction workers and occupants, and diversity of suppliers. Being able to see live information about how components will affect performance means suppliers have a better understanding of what procurers need, not just what specifications say they want. This will increase the procurement of products and services that deliver better outcomes, in the context of other elements being procured around them or the asset as a whole.   Greater outcome-based transparency opens the market for new services and products which improve delivery and quality throughout the lifecycle of a building; helping to create a circular construction economy where products are designed to be reused, repaired, or remanufactured.

Key Insight

Through its consultancy experience, PCSG was aware that performance compromises were common, based on how procured components come together on-site. It submitted a joint proposal with the Construction Products Association (CPA) and MK9 Development for funding to create a digitally connected supply chain model for the construction industry. The aim was to test a digital twin's ability to deliver greater collaboration throughout construction manufacturing and built environment supply chains, resulting in better design, procurement, and productivity outcomes for clients.

First step

The consortium held multiple workshops with contractors, clients, consultants, manufacturers, suppliers and CPA members to understand the limitations of current procurement processes, the information necessary to deliver better outcomes, and the design requirements for a platform that is easy to use.

Barrier

If suppliers and manufacturers aren’t more closely involved in the specification of the best products for delivering the outcomes clients need, valuable knowledge is lost. This leads to decisions being based on who can deliver prescriptive specifications at the best price, rather than the best solution in terms of what clients want an asset to do.

Digital Innovation

The consortium created an outcome-based procurement platform (OBPP) that could be used by all clients and suppliers, being interoperable with Building Information Modelling (BIM) and in-house systems used in supply chains and asset management. The digital twin had to make it easy to digitally link the whole supply chain, test requirements at each transaction point against desired outcomes, and see live reliable information on how a combination of products would perform together in the resulting asset.    A new-build primary school from the Department for Education framework for modular schools was used to test the model platform.

Whole life innovation

The construction industry needs to build safer, better-performing assets more quickly, more efficiently and with fewer resources. To do this procurement decisions have to be based on quality and performance throughout the lifecycle of an asset, rather than historical relationships. As part of the OBPP, an outcome-based requirements framework was developed to measure supply chain decisions against specific benefits needed to achieve whole-lifecycle outcomes. Digitally linking supplier payment to delivering long-term performance outcomes, rather than prescriptive specifications, incentivises collaboration to deliver whole life value and helps to create the market for new ‘circular construction’ services and products, based on reuse, repair, and remanufacture.

Collaborators

The Construction Products Association (CPA) provided consultancy on the project and access to insights from its members - construction product manufacturers and suppliers. Design studio and technology company MK9 Development, helped to design and build the outcome-based procurement platform (OBPP) to support the functionality and data required by the industry.

  • Construction Products Association
  • MK9 Development

Lead support

The opportunity of securing Transforming Construction Challenge funding brought the consortium partners together to tackle the lack of connection suppliers have with project outcomes, and therefore the missed opportunity for collaboration in construction manufacturing and built environment supply chains.

Long Term Vision

You can't optimise what you can't see. Industry adoption of outcome-based procurement platforms will allow all built environment suppliers, from component manufacturers to asset managers, to see how their products and services can contribute to the big picture performance of a building. 

Human Stories

Suppliers and manufacturers often feel disconnected from the construction process. Using digital twins to help suppliers understand what clients want an asset to do, not just what they want it to be, empowers them to add greater value. Conflicts over product specifications create cash flow problems for supply chains. The OBPP is designed to ensure clarity around the performance required and incorporates an automatic payment pool linked to the delivery of these benefits.

Powerful Processes

The outcome-based requirements framework ensures clients can measure the specific benefits they need to achieve whole-lifecycle outcomes at each stage in the supply chain. The consortium considered detailed requirements under each procurement stage: 

  • Organisational outcomes that align with social value measurement (National TOMs Framework)
  • High-level project outcomes that align with the Department of Education and Schedule of Accommodation
  • Delivery-level outcomes that respond to project outcomes and required benefits
  • Outcome validation
  • Offers – client requirements and supplier responses

Fascinating Facts

The OBPP is accessible for all clients and suppliers involved in the build of a project as it is interoperable with Building Information Modelling (BIM) and in-house systems. Updating the model at every transaction point in the supply chain allowed it to provide live progress updates as a product or service moves through the system.

Benefits

Assurance
By ensuring that performance-based specifications, as opposed to prescriptive product-based ones, are cascaded down to suppliers and product manufacturers, the OBPP helps to ensure that the right solutions are provided for the outcomes required.

Collaboration
The OBPP enables suppliers and manufacturers to see live information about how components will affect the performance of an asset, giving everyone in construction manufacturing supply chains the opportunity to collaborate in delivering desired project outcomes. Designing the model platform so that it is interoperable with BIM and in-house systems used in supply chains and asset management helps to digitally connect the whole supply chain.

Whole-life Value
The OBPP enables procurement decisions to be based on quality and performance throughout the lifecycle of an asset, rather than historical relationships. It also allows manufacturers and suppliers to suggest changes to components or alternative products that will improve performance, considering the whole context of a project.