The Go-Ahead Group has set out a commitment to increase its spend with SME suppliers across all 12 of its UK bus and rail operating companies. The step is aimed at helping those enterprises to recover from the pandemic while also benefiting customers, and it should see the group spend at least £250m per year with those businesses from 2022.
As part of the work, Go-Ahead will take various measures to simplify supply opportunities for SMEs. Those will include the creation of an SME champion group, publication of a simple guide to doing business with Go-Ahead, and creation of an 18-month forward plan of upcoming tendering opportunities.
Go-Ahead says it already works with over 3,200 SMEs. They represent 75% of its suppliers, with one-third of the group’s influenceable spend – or £247m – made with those enterprises in 2020.
Go-Ahead will invest £15m to add 100 SMEs to that figure by the end of 2023. That increase will take the proportion of SMEs among its suppliers to 77% and grow the percentage of the Go-Ahead’s influenceable spend that they receive to a projected 35%.
The group spends around £2.5bn within its supply chain each year. That is “heavily skewed towards a few high spending categories” that it says are “too large or too risky” to be placed with SMEs. That includes vehicle and fuel procurement. Once those categories are removed from the calculation, that left an influenceable spend of £738m in 2020.
The group’s plans are contained within a document that outlines its strategy and commitments for SMEs. In a foreword, Chief Financial Officer Elodie Brian notes that it is “vital now more than ever” for Go-Ahead to focus on working more closely with smaller companies.
“If we are to play our part in rebuilding the economy in the wake of the pandemic, SMEs need the opportunity to supply bigger businesses, to grow and to innovate. That is what this strategy is all about,” adds Ms Brian. “Working with local SMEs will not only support the economy and communities, but benefit passengers directly through responsive and innovative local goods and services.”
Download the strategy document here.
