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Performance Measurement

In October 2015, Supply Chain School Partners were invited to join a Special Interest Group (SIG) to look at Performance Measurement and in particular how the industry could standardise on:

  • The sustainability questions within current industry pre-qualification questionnaires (PQQ)
  • A set of metrics and indicators for partners to measure the same things in the same way

The SIG included representatives from the following partners:

  • Aggregate Industries
  • Balfour Beatty UK 
  • BRE (knowledge partner)
  • Carillion plc
  • EMCOR UK
  • Galliford Try
  • Hochtief
  • Interserve construction 
  • Kier
  • Sir Robert McAlpine

The SIG’s work was completed in April 2016 and the outcomes are described below.

PQQ questions and model answer assessment

This purpose of this section is to:

  • Provide a publicly available set of best practice PQQ (pre-qualification questionnaire) sustainability questions and guidance on how these should be used when tendering
  • Give guidance and examples on what would be included in a basic, good and excellent answer. 
  • Demonstrate why it is important for partners and members to adopt this consistent set of sustainability questions 

Background: why is industry consistency desirable at PQQ stage?

As part of a tender process, suppliers are often required to complete a pre- qualification questionnaire (PQQ). These PQQs vary in format and complexity and it has become clear that this inconsistency results in extra cost and time burdens for those completing these documents, especially SMEs.

The purpose of a PQQ is generally to assess the overall competency of company and their ability to undertake a specific type of work. As such, the questions are not required to be project-specific.  Therefore, there is an opportunity to standardise  these questions across the industry and for it to be made clear how the responses are assessed.

One outcome of this Special Interest Group was to develop a set of best practice questions relating to sustainability and to feed these into a wider industry initiative to develop a standardise set of PQQ questions. 

Going forward, the Supply Chain Sustainability School will work with Build UK (formerly the UKCG) and BSI to improve the PQQ process, making it more consistent and less of a burden to industry.  

If you would like to know more about the procurement process, including Sustainable Procurement, please see the ‘Procurement Process’ section of the Sustainable Procurement e-learning module or contact alex@actionsustainability.com

Best Practice PPQ questions and assessments of answers?

This document compiles best practice of PQQ questions and the assessment of answers Supply Chain School

  1. SIG recommended PQQ questions
  2. PQQ guidance for Partners and procurers
  3. PQQ guidance for members and providers

Performance metrics and indicators 

Background: why is industry consistency desirable for performance measurement?

The process of performance measurement and management during a project or contract has a number of business benefits, it:

  • Ensures that what has been committed to during tender stages will be or is being delivered on the ground. 
  • Enables the supply chain to demonstrate performance against contractual targets and requirements
  • Enables organisations and project/contract teams to mitigate their own impacts and understand risks and opportunities 
  • Enables companies to gain commercial advantage through their ability to demonstrate performance 
  • Allows companies to demonstrate performance to external stakeholders
  • More widely, enables companies to write and enact more informed strategies, using data to inform their targets. In time, they can then report performance against these strategies.

However, if the organisations within an industry are measuring different things, in a different way, how can we compare like for like? How can we produce industry baselines and how can companies start to benchmark themselves? This is why the SIG has taken on this challenge, and produced the outputs detailed below

Language

In order to ensure consistency when measuring sustainability performance this SIG has agreed on the following definitions:

  • Metric: data point that you would like the supply chain to collect data against; in order for you to calculate your indicators. 
  • Indicator: indication of performance; how likely you are to hit your target(s)
  • Target: need to be SMART. Your clients should be setting targets and communicating them to you
  • Goal: long term aim/aspiration
     
An example from waste is:



Environmental performance measures

The remit of this Special Interest Group was to establish an agreed set of metrics and indicators for partners to measure the same things in the same way, please see the outputs below. We recommend these are adopted by partners and members, and more widely across the Built Environment. 

  • % waste diverted from landfill (calculated by weight) 
  • Total waste produced (by weight)  per £1 million spend
  • Potable and non-potable water use per £1 million spend
  • tCO2e released per £1 million spend
            including:  waste  and logistics/deliveries. 
            excluding : passenger vehicles (staff and visitors)
  • % materials purchased that were responsibly sourced (by volume)
For the full set of metrics, definitions and units, please download the following spreadsheet:
  
Supply Chain School 'Performance Measurement Special Interest Group' recommended Performance Measures
Part of this work has been to produce guidance alongside these metrics and indicators, including any relevant unit conversion factors, normalising factors or scope boundaries.

Please see the Technical Guidance document for more information:
 
Technical guidance on environmental performance measures

Social value performance measures

What constitutes social value on a project is dependent on a wide range of variables, including the project context, wider social objectives and stakeholders requirements. This makes it difficult to standardise on a single or even multiple indicators for Social Value. Therefore the Social Value Special Interest Group has provided a library of indicators and metrics that might be used by clients.

Please refer to the Social Value page for more information:

www.supplychainschool.co.uk/socialvalue/

More information

For more information on Performance Measurement and to find out about free school workshops on this topic please contact: alex@actionsustainability.com or call 0207 697 1984.