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Balfour Beatty committed to £1 billion supplier diversity initiative

Balfour Beatty committed to £1 billion supplier diversity initiative

Balfour Beatty is a leading international infrastructure group. With 36,000 employees, we provide innovative and efficient infrastructure that underpins our daily lives, supports communities and enables economic growth. We finance, develop, build and maintain complex infrastructure such as transportation, power and utility systems, social and commercial buildings.

Our main geographies are the UK, US, Middle East and South East Asia. Over the last 100 years we have created iconic buildings and infrastructure all over the world, including the London Olympics’ Aquatic Centre, Hong Kong’s first Zero Carbon building, the world’s biggest shopping mall in Dubai, the National Museum of the Marine Corps in the US and the Channel Tunnel Rail Link.

The Challenge

United Kingdom Prime Minister, David Cameron, was the honoured guest at an event announcing Balfour Beatty’s £1 billion spend commitment with UK small to medium enterprise (SME) last year.

With the UK Government having already identified this sector as a driver for economic growth, Balfour Beatty’s commitment goes well beyond supporting the goal of channelling 25% of Central Government spend through the SME sector by 2015.

We agree that the continued road to economic recovery begins with small to medium enterprises. As a responsible organisation we have an important role to play in fostering economic success – not just for Balfour Beatty PLC, for the whole of UK PLC. Without the help of Dun & Bradstreet we could not have gained the confidence to make our £1 billion SME spend commitment.
Aaron Reid, Sustainable Supply Chain Manager, Balfour Beatty UK

The £1 billion spend commitment is by far the largest ever made by an infrastructure company. The question is how to prove it.

By any measure, Balfour Beatty’s UK business is huge. It has more than 8000 active supply chain partners in the UK, and works on around 700 live projects at any one time.

Identifying which of its partners qualify as SMEs may sound simple enough, but for an organisation of this size, it’s no small task.

While partners are required to ‘self-declare’ as part of the supplier pre-qualification process, accuracy is by no means assured.

Research by Balfour Beatty found many suppliers are unaware of the nuances of definition. And while organisations may be sure of classification, the individuals completing the pre-qualification forms are not.

Smaller suppliers could be, for example, part of a larger parent. Similarly, Balfour Beatty’s supply partners also subcontract work to other firms. Accurate reporting means knowing who those firms are; their parentage and their own classifications.

A resource-intensive, highly complex and expensive task was avoided by a call to Dun & Bradstreet.

The Solution

Already a corporate user of Dun & Bradstreet’s financial reporting tools, Balfour Beatty enlisted the help of the business intelligence provider’s Specialist Team to interrogate its supplier data.

Taking charge of some 27,000 records from more than 8,000 suppliers, Dun & Bradstreet first cleansed the data. Corporate linkage and parenthood was established, and duplicates eliminated. Then, each company was matched with a specific D-U-N-S number – a unique company identifier that’s used around the world.

With every SME flagged, the data was exported back into Balfour Beatty’s systems to allow simple reporting against internal and external targets.

Results & ROI

With this activity now undertaken every quarter, Balfour Beatty has a complete, up-to-date list of all SMEs within its supply chain.

At the last count 76% of its partners were SMEs, with approximately 59% of Balfour Beatty’s total spend flowing through this channel.

The benefits are two-fold. First, the ability to swiftly identify SME partners allows the company to achieve the right balance of supplier diversity, and to track progress towards its goal of an inclusive supply chain.

Second, and perhaps more fundamentally, Balfour Beatty can report its record-breaking SME success back to the Cabinet Office, and continue to play a key role in the economic development of the UK.

Had the accuracy of its data been in question, it would have struggled to report against its SME obligations. Similarly, it would have failed to gain the ringing endorsement from Prime Minister David Cameron of its £1 billion spend commitment.

Balfour Beatty is now rightly regarded as a leader in supplier diversity. The company is regularly invited to speak at national events on the subject, and works with other major UK organisations to share best practice and extend support for inclusive supply chains.

For more information on Balfour Beatty please visit www.balfourbeatty.com

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