Building better connections - Transurban Case Study
The company surveyed more than 100 of its top suppliers in 2022 to better understand how suppliers and partners viewed Transurban, and to gauge any opportunities or issues. The survey was part of a major ‘listening’ exercise that included interviews with industry stakeholders, employees, government officials and customers, as well as a further survey of more than 400 community members. Called ‘Project Listen’ the exercise provided feedback that helped Transurban to understand and address what was most important to its stakeholders.
It soon became the “biggest catalyst and genesis for change” says Head of Procurement Mark Sheldrick, who joined the company last year. “We learned we were not getting them most we could out of some of our relationships with suppliers.” Some suppliers were keen for more information about Transurban’s strategy and priorities and hoped to enhance ways of working together, including putting forward new ideas and thoughts. The company realised an enterprise-wide, centralised approach would help it to enhance risk management, build stronger relationships, assess potential innovation, boost consistency and introduce new ways of working.
This is particularly important since Transurban outsources a large portion of its business to suppliers, some of whom have contracts that run for a decade or more. Its website points out it has a direct workforce of 3,000 but a total workforce of 9,000. “Suppliers are critical to our objectives and goals, which is why we want to invest more in these relationships.” What’s more, the timing was right, says Sheldrick, who has driven transformational change in the past and was able to draw on that skill set and experience to contribute to the change at Transurban.
Managing the messaging
The first step was to gather more data. Following on from the high level feedback collected in Project Listen, Sheldrick’s team ran a Voice of the Supplier survey to gain more insight and a State of Flux team carried out a current state assessment, which included interviews with internal stakeholders. Those activities gathered additional evidence that change was required and could generate improvements.
“We wanted to get different perspectives and views to help us to solve business challenges and enable us to work more collaboratively to create further value,” says Sheldrick. “The research resulted in some really good insights and intel, which provided us with good ammunition.”
The feedback chimed with procurement’s desire to perform a more strategic and early advisory role for internal stakeholders and to engage more deeply internally and externally. And so, work began on what a more formal SRM programme could and should look like. “The next step was about persuading people that change would benefit them - and looking at what they could expect to see out of an SRM programme.”
Sheldrick says some stakeholders “got it straight away” while others were more resistant to the change or feared another layer of procurement based bureaucracy. “For some, the perception was that procurement would try to control their supplier relationship, and they didn’t wish to relinquish control.”
Sheldrick and his team had to explain this was not the case. “We wish to partner them so we can add more value. Procurement looks at suppliers through a different lens that considers social licence, sustainability, commercial value add, cost optimisation (if need be), health and safety and so on. We neffectively corral the different parts of the organisation and contribute to the supplier relationship.
”The team invested a lot of time and effort into engaging internal stakeholders to build its business case. They listened too when the feedback was to hold off discussing a tech solution until much later in the process.
“The biggest catalyst and genesis for change came from ‘Project Listen’, which gave us tremendous insight into where we could enhance our relationships with suppliers.”
Around eight strategic stakeholders then formed a steering committee to help advise and guide procurement’s creation of a supplier framework. This also enabled procurement to further reassure and explain their business proposition to senior stakeholders. Feeding into this steer-co was a larger working group of around 40 people who worked on the details of the framework. Areas included risk, strategy, value creation, sustainability, innovation, resources, pipeline management, and roles and responsibilities. Procurement also held one-to-ones with individuals where needed.
Sheldrick says this simultaneous top-down and bottom-up approach, which took around eight months, was useful for keeping key people informed, gathering their expertise and winning individuals over at every level.
On the road to change
The work was divided into four stages, with more prescriptive detail layered beneath each:
1. Supplier segmentation: Grouping providers into their appropriate segment of ‘strategic, collaborative, tactical or transactional’.
2. Value drivers: This stage asks Transurban to consider what it hopes to achieve through greater engagement with a particular supplier, better management of risk, sustainability, delivering mutual benefit, innovation etc.
3. People: Ascertaining who the key stakeholders are whom they might need in the room and how often.
4. Roles and responsibilities: Specifically defining who does what and what each role comprises for the sake of clarity and to avoid duplication. As well as the recruitment of two procurement professionals who will “live and breathe” supplier relationship management”.
The next step was fine-tuning the framework ready for a soft launch with two to three key suppliers.
“We chose strategic, critical, suppliers who were willing and could already see the value of what we were trying to do. After that it will roll out to 15 suppliers in the short term, and then, once value has been achieved and can be proved to internal stakeholders, we’ll probably invest more resources into it and incorporate our top 30 suppliers.”
Sheldrick says they are taking a careful, methodical approach, so as not to put too much pressure on the business. “We’re gently incorporating it into the regular operating rhythm and cadence,” he adds. “Our purpose and strategic statement explains that we bare very much focused on understanding what matters to our key stakeholders - internally and externally.” He says he knows suppliers want more opportunities to access company executives and the work establishing a programme has provided a good opportunity to improve contact between both sides. Strengthening those connections will also help to render small issues less problematic in future.
It should also start to build trust between the buying and supplying sides and aid thinking about how they can best share information about future plans. “They want to understand our pipeline of work and what we’ll be investing in so they can position themselves and resource it appropriately. We need to consider how we can better articulate our strategy and align that with suppliers.”
It’s too early to know the impact of the improvements but Sheldrick says because the project necessitated more communication it has already helped to boost existing relationships and build new ones. “There’s been quite a lot of change in procurement in the past couple of years, and this work has provided us with a good vehicle to get out and about. The procurement department has also found itself being engaged earlier and for some different things as well, which is great.” Sheldrick hopes that having a structure in place that sets out guiding principles for supplier relationship management should make Transurban’s operations more efficient, and improve suppliers’ experience of working with them.
Stats and facts
Three ways Transurban is helping to improve air quality.
Three ways Transurban is helping to reduce emissions
1. By considering design - such as the gradient or steepness of motorways and tunnels - to create smoother journeys, which in turn cuts emissions
2. Building tunnels that divert traffic away from highly populated areas, thereby reducing the need for more fuel-intensive stop/start driving
3. Roadside technologies, such as electronic signs, to manage lane use and speeds to help to manage traffic flow which lowers emissions
