PfH help Midland Heart achieve their vision
Like most procurement teams in the social housing sector, Andrew Foster at Midland Heart and his team of four are exceptionally busy.
As one of the largest social landlords in England, Midland Heart provides over 32,000 homes for 70,000 people across 54 local authorities. More than 100 procurement exercises are conducted every year. This covers everything from repairs and maintenance to temporary labour.
In 2012 Governance and Contracts Director Andrew Foster faced several big challenges. “Midland Heart had a shortage of procurement resource”, he explains. “Due to a number of exceptional factors a gap was emerging between the number of procurement exercises I was being asked to deliver and the number of staff I had in place to physically do the work”.
The second challenge was a strategic one. “Around 80 per cent of all procurement spend was going through direct tenders. We were spending too much time doing our own tendering and it was becoming increasingly obvious that this was an inefficient way to purchase many of our goods and services. We needed an alternative approach.”
This alternative strategy was provided by national purchasing consortium Procurement for Housing. Andrew and his team appointed PfH to develop and deliver a range of procurement exercises across category areas ranging from Temporary Labour to Japanese Knotweed Removal.
Strategic stakeholder engagement formed a critical part of each project enabling PfH to build internal relationships and develop in-depth knowledge of service requirements. This depth of understanding allowed PfH to formulate robust specifications that were then included within tender documents.
Throughout the process, PfH adopted an independent approach, using its category expertise and links with other consortia to support the decision making process and get the best value for Midland Heart. For each category area PfH created individual audit documents recommending the proposed procurement approach.
One specific project Andrew Foster outsourced to PfH was around non-contracted suppliers. Midland Heart had identified that not all suppliers were contracted on its standard terms and help was needed to address this issue . PfH resourced this project, freeing up the time of procurement staff to focus on core activity.
Andrew Foster explains how PfH became an extension of his procurement team: “PfH have been an important part of our procurement function, working well alongside our internal team. They have added weight and strong capability to our procurement efforts and have played a role in helping us to deliver on our purchasing objectives.”
“I wanted strong project management led by someone who would be flexible and agile, working in a way that was right for Midland Heart. PfH gave me a programme manager who has done a very good job, looking after each project, reporting every two weeks and being adaptable to our needs. This worked well overall and both my team and my colleagues were pleased with the results.”
Andrew was also keen to take advantage of PfH’s subject matter knowledge. “I have four people in my team, procuring all goods and services across the organisation. There is therefore no way they can have specialist knowledge in every area.”
“As PfH have a large procurement team they brought in depth subject matter expertise which we could never have in house. We benefited greatly from this.”
Andrew felt that PfH gave Midland Heart more ‘bandwidth’ when it came to how they could achieve value. “PfH are the biggest provider of agreements in the housing sector but they also have alliances with other procurement framework providers. They have given us multiple framework options which has made it easier to achieve our strategic objective of migrating more of our spend onto frameworks.”
This wide ranging, well-researched approach proved crucial to getting the best results for Midland Heart and also links to PfH’s low cost pricing model. . Independent reviews were conducted for Midland Heart across their category areas. This might result in a new tender or recommendation that the provider use another consortia framework or one of PfH’s own frameworks.
Recommendations varied depending on where the best value could be delivered. As a result there was little upfront investment required to cover PfH’s project management, business analysis and strategy work.
Over the past twelve months, PfH has helped Midland Heart to lock in lower unit costs which should in time generate approximately £350,000 of savings. But the benefits don’t end here. “In the longer term, PfH’s engagement work has helped to persuade internal colleagues that they don’t always have to do a direct tender. This has made people open their minds to other ways of serving their procurement requirements and has freed up their time to focus on core work.”
“We had a clear vision of where we wanted to get to with procurement activity. PfH have acted as an engine to help us get there. They offer a good range of procurement expertise; they’ve given us lots of information about frameworks and have helped us to deliver on our strategy. We see PfH as an organisation which we will want to utilise in the future.”