Richard Taylor, sales and marketing director at Dennis Eagle, and an Ambassador for RWM in partnership with CIWM, looks at the practicalities of a more joined-up approach when it comes to helping local authorities deliver efficiency improvements and savings.
When money is plentiful it is very easy to fall into the trap of doing things as they have always been done, but when purse strings are tighter it is essential to think differently in order to find ways to make budgets go further. This is particularly evident in the public sector, which has seen a 40 percent reduction in funding since 2010 and is likely to see similar reductions over the next five years.
Rather than limiting the ability of waste operators to fulfil their obligations, this austerity is leading many forward-thinking local authorities to adopt new and more innovative working practices to meet the challenges they are facing. Joint procurement is one such example, helping councils realise greater efficiency and long-term value when awarding contracts.
This was one of the recommendations highlighted by the Department for Communities and Local Government in its report: Household Waste Collection: Procurement Savings Opportunities, which suggests: “appropriate harmonisation of waste collection goods with a view to reducing product variations and aiding high volume procurement”.
This seems like a sensible approach, because regional variations in waste collection methods can result in a significant difference in vehicle unit costs. However, it is important to consider that there are a number of individual factors behind these regional variations, which could make harmonisation difficult in some cases.
The nature of the terrain in which refuse collection vehicles are operating, local waste disposal methods, public demand in relation to collection frequency and preferences from local authorities in relation to livery and branding must all be taken into account. As such, standardisation on a national scale, and even in many cases at a regional level, is simply not practical.
Synergy Delivers Value
However, despite this we are seeing some instances where synergies between regional authorities are delivering greater value and efficiency through the formation of strong partnership arrangements with suppliers, for example Lincolnshire and Nottinghamshire. This is certainly an approach that could be replicated on a wider scale, although it will be necessary to look beyond geographical boundaries, with more transparency and greater sharing of information and knowledge between local authorities, to help identify suitable opportunities for collaboration.
This would undoubtedly lead to greater harmonisation of waste collection goods. The resulting reduction in product variants would therefore help in delivering greater efficiencies and long-term savings because, although the bespoke, specialist nature of our manufacturing operation means we are well-equipped to meet individual customer requirements, this can result in a significant difference in unit costs.
For successful bidders, an additional benefit of joint framework agreements is the security they offer in terms of high-volume procurement and potential long-term contracts. However, if local authorities across the country take steps to adopt this purchasing model on a wider scale, it is likely to lead to a more fragmented and competitive market, with suppliers under increasing pressure to deliver the best value and service proposition.
It is clear that by working more closely alongside each other, as well as with companies throughout the supply chain, local authorities can potentially deliver savings. However, there needs to be a trade-off between providing manufacturing or cost efficiencies and delivering the right solutions to the market. If this balance is achieved, it will enable the sector as a whole to operate as sustainably and effectively as possible, delivering long-term value through a more joined-up approach to procurement.
Richard Taylor is an ambassador for RWM in partnership with CIWM