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Keepmoat Annual Report 2020

  • Text
  • Lease
  • Keepmoat
  • Strategic
  • Annual
  • Income
  • Assets
  • Limited
  • Homes
  • Statements
  • October
Keepmoat has released its Group financial results for the year ending 31 October 2020.

STRATEGIC SUPPLY CHAIN

STRATEGIC SUPPLY CHAIN Our vision is to build a more efficient and Strategic Supply Chain Our regional buyers work in partnership with framework suppliers to ensure successful operation of the arrangements providing feedback on performance and service, and on future requirements. Our suppliers play an essential role in our business, providing the materials and services we use to build our homes. It is therefore essential that we build long-lasting, strong relationships that make us their partner of choice. We operate a series of group-wide, long-term strategic frameworks providing preferential commercial terms and service levels nationally and regionally for supply of our materials, site equipment and business consumables. These arrangements offer significant pricing advantages, whilst also including important delivery, service and product warranties which helps us maintain and improve our quality and service to our customers. The Group Supply Chain team manage over 97 arrangements which are made up of framework agreements, commercial arrangements and formal price lists. In the year to 31 October 2020, 88% of direct spend was channelled through our frameworks. The Framework Agreements align with the Keepmoat Homes Standard Specification and deliver innovative solutions to support our drive for standardisation. They also provide customer care and product warranty support to our customer services teams. Many of the agreements provide value engineering support, free site surveys and scheduling and pricing services. Several of our Framework Agreements are with manufacturers and suppliers who provide their products through our subcontractors and compliance to these agreements was 97% during the year. 34 KEEPMOAT.COM

STRATEGIC REPORT Management of cost and best practice We work hard to mitigate price increases and ensure that agreements are always competitive and provide the best quality without compromising on standards. We work in partnership with our suppliers to deliver the best solution for our site teams and our customers. Many agreements include provision of supplier training for our people and our subcontractors. Management of supply chain risk We maintain regular contact with suppliers and manufacturers to ensure continuity of supply, negotiating product allocation by volume. Availability of materials is secured in line with demand and we carefully manage the supply of key products, such as bricks and plasterboard, by working with the regional businesses and our supply chain partners. We ordered circa 20 million bricks in 2020, all are sourced in the UK. We engage with our suppliers to keep them informed of key forecasting information, providing them with a rolling build programme on a monthly basis in addition to product specific demand schedules. We also notify our supply chain of any changes to our working practices as appropriate. These long-term frameworks reduce business risk and help ensure a secure supply of our essential materials. In 2020 we reviewed our homecare defects and identified high risk products. This has allowed us to proactively reduce and mitigate any future defects, promoting an environment for both internal and external stakeholders where product innovation is welcomed. Sustainability in the supply chain We promote sustainability within the supply chain through our sustainable procurement policy. Working closely with our sustainability team ensuring all suppliers provide data in a timely manner and to a format that identifies the key metrics. We work with our supply chain partners to support the development of reporting tools. Whilst every effort is made to support our supply chain, where business critical data is not provided, an alternative partner is identified to ensure we meet our key obligations. We engage with waste management consultants in our drive for waste reduction on site with a focus moving forward on reporting as a tool for managing waste intensity and the management of waste up the waste hierarchy i.e. pallet repatriation, maximising re-use and recycling where possible. Management of office waste is due to be pulled together under one supplier across all regions. This will provide a single point of contact for reporting, management of waste reduction and ensuring legal compliance with waste disposal obligations. We work with supply chain partners to ensure compliance with our policies i.e. anti-bribery & corruption, modern slavery, equal opportunities, health and safety and environmental policies as well as inclusion of our supplier chain partners own polices where available. Brexit There are several key areas where the impact of the UK’s new trading relationship with the European Union may have an impact on pricing and availability of product. Uncertainty in the market and basic supply/demand economics may also drive UK manufactured product prices higher as the rates for imported products increase. We have worked closely with our supply chain since the result of the vote to leave the European Union to ensure that we understand the changes arising from Brexit. We have continued with this close engagement since the confirmation of the new trade arrangements to understand their challenges and contingency strategies. These include careful monitoring, increasing UK stock holding and diverting imports to alternative UK ports where bottlenecks are predicted. At this stage, we have not experienced any significant supply chain issues associated with Brexit. ANNUAL REPORT & FINANCIAL STATEMENTS 2020 35