30 September 2010 | Rebecca Ellinor
NATS is among the first companies in the UK to be awarded certification in collaborative business partnering. Rebecca Ellinor finds out more
“November Alpha Tango Sierra, you are good to proceed.” The UK’s National Air Traffic Service – NATS – last year handled some 2.2 million flights carrying around 200 million passengers. It provides control services to aircraft flying in UK airspace and over the eastern part of the North Atlantic.
Safety is its priority, but it also aims to provide its services efficiently and cost-effectively. To achieve this, the organisation must maintain strong relationships with its partners. In this respect NATS is one step ahead – or rather, flying 20,000 feet above the crowds.
Earlier this year it became one of five top firms in the defence, aviation and support services sectors to be awarded PAS 11000 certification in collaborative business partnering. This framework provides a multi-stage approach to enable organisations of any size and sector to apply good partnering practice and manage valuable business relationships.
It is the world’s first collaborative relationship standard and is expected to become a British Standard (the BS 11000) next month. It is the brainchild of not-for-profit consultancy PSL (Partnership Sourcing Limited) and has already helped five organisations – Raytheon Systems, the VT Group (now Babcock), NATS, Lockheed Martin UK and EMCOR Group (UK) – establish, manage and improve strategic partnering.
Some of these organisations applied the framework to a single project, or supplier relationship, NATS decided to use it across its relationship management process. And, in one instance, it’s applying it to smooth the transition from one system to another where two competing suppliers working together.
First steps
So how did this all come about? Chris Odam, NATS supply chain and business services director, has been involved with PSL for about 10 years, joining the board this year, so he was aware of the collaborative standard. He says NATS had already done some work on supplier relationship management (SRM), so using the framework, and working towards accreditation, was a natural step.
The company had already segmented its supply base to identify key partners. And coincidentally, a number of firms on the PSL pilot were also strategic suppliers to NATS.
“It means we’ve got half a dozen partners that we work with applying the standard, and some of those have the standard themselves,” says Adrian Miller, senior commercial specialist in supply chain management.
The six suppliers it identified as partners, which it applied the standard to during the pilot, were: facilities management (FM) provider EMCOR, which manages hard and soft FM services and support systems for its Swanick air traffic control centre; Lockheed Martin, which develops the systems for the Swanick centre; Capita, an HR outsourcing provider; BT for ground communications; Indra Systems, the company developing a next generation data processing system for NATS; and SELEX, a company supplying systems integration work for NATS.
“It was tougher to approach the standard in this way because we had to prove we had made it work across half-a-dozen different relationships,” says Odam. So what does this mean in practice? “One example is where we’ve used the standard to develop an alliance arrangement between three parties, NATS, Lockheed and Indra.”
Lockheed provides and manages NATS’ current air traffic management system, while Indra is developing its next generation system, so NATS will be switching from one to the other within five years.
“The relationship is special because we’ve got Indra and Lockheed – who are essentially operating in the same market, trying to sell their own systems – working together on how their systems talk to each other while we go through the lengthy changeover programme. We’re having to use all our relationship management skills to keep the organisations on board with the plan,” says Odam.
It won’t be just that Lockheed supplies one day and Indra another, Lockheed will have a continuing role with NATS. “The important thing about these relationships is you talk about the future and how they will work with you, sharing long-term objectives.
“We have got gain and risk sharing clauses that help us reduce cost on a piece of work where we can’t scope out on day one what is required. It’s like a research and development programme with two opposing suppliers working together. Three or four years ago we couldn’t have envisaged this.”
Other benefits
Elsewhere it has recently transferred the hugely important catering category to FM provider EMCOR. “Air traffic controllers aren’t allowed to leave the site so we rely on a good catering service,” says Miller.
Odam adds: “We developed a new financial model using the collaborative and transparency principles. That has enabled NATS to halve its catering subsidy.”
In this instance working more closely together, sharing information and risk meant one chunk of the savings came from a reduction in the amount of money both parties needed to keep aside in case of problems.
Miller says: “PAS11000 gets you looking at and understanding each other’s risks, so it’s not a game of poker where you are only seeing your own cards. You’re encouraged to behave in a way that might ensure that the other party is not exposed.”
Although NATS applied the process to six partners, it also has a large number of key suppliers with whom it can use the standard to manage and monitor performance, as well as use to work on continuous improvement.
Not only has it boosted SRM, and the ability to work efficiently and cost effectively, there were other advantages.
“It helped us engage other areas of NATS in what partnering and collaboration is about and helped us tell stakeholders, ‘this is an important part of the NATS business, and we need you to understand how collaboration and partnering works’, says Odam.
It was also helpful in developing the skillset of NATS staff. “Most have not worked in that area before, so we have used it to help develop our own supply chain personnel.”
And now it has built the PAS11000 into working processes, the team has a path to follow.
Odam adds: “Getting PAS11000 was part of an improvement road map we’ve been on for five years. You must have a level of competence and process management in place before you can contemplate going down the PAS11000 route.”
And what’s next? “We’re working on the transition to British Standard, and we are hopeful we will be accredited to that.”
