Capacity is constantly changing. Planning needs to keep up.

Oct 8

5 min read

Infrastructure organisations need more than a snapshot of supplier capacity. They need a shared view that changes as their programmes, procurement plans and supply chains change.

Capacity has become one of the biggest delivery challenges facing UK infrastructure.

The scale of planned investment continues to grow. The water sector is delivering a record £104bn AMP8 programme, while major energy programmes are also competing for contractors, specialist skills, equipment and materials. SP Energy Networks alone has started a five-year £12bn investment programme, supported by strategic agreements offering 19 suppliers access to up to £5.4bn of work over ten years.

This investment provides significant opportunities for the supply chain. It also creates a practical challenge for clients: understanding whether the right capacity will be available when and where it is needed.

Turner & Townsend’s review of the first year of AMP8 describes construction capacity issues as “well known and persistent”. It also highlights the need for earlier planning, better connected data and a programmatic view of competing pipelines. The problem is that capacity does not stand still.

It highlights the need for earlier planning, better connected data and a programmatic view of competing pipelines. The problem is that capacity does not stand still.

Capacity is a moving picture

A supplier may confirm today that it expects to have capacity available next year. By the time the work reaches procurement, its position may have changed.

The supplier may have secured work elsewhere. Another project may have moved forward or slipped. Internal resources may have changed. A package could become larger, move location or require different capabilities. Confidence in the delivery date may also have increased or decreased.

Capacity can therefore change because of:

New contracts and framework awards
Changes to project scope, value or timing
Delays elsewhere in the programme
Supplier mobilisation and demobilisation
Workforce or specialist skills constraints
Changes to the availability of equipment and materials
Suppliers revising how much work they are willing or able to accept

A one-off capacity survey can provide a useful starting point. However, it begins to age as soon as procurement plans, supplier workloads or delivery assumptions change. Organisations need a way to keep the picture current.

Individual schedules do not show the full demand

Most organisations already hold much of the information needed to understand future demand. It can be found in procurement schedules, project plans, commercial systems, pipeline reports and conversations with suppliers.

The difficulty is that this information often sits across different projects, frameworks, partners and systems.

Each schedule may provide a reasonable view of its own packages. It becomes much harder to understand the combined effect across a wider programme.

The same supplier could appear in several schedules under slightly different names. Multiple delivery partners may plan to use the same specialist company during the same period. Several packages may depend on the same service, skill or item requiring early procurement.

Viewed separately, each plan may look deliverable. Viewed together, the programme could be placing more demand on a supplier or category than the market can support.

This is particularly important within Alliances and Enterprise models, where different organisations procure from an overlapping supply chain. We explored this challenge in our earlier article, Does Tier 2 capacity put infrastructure delivery at risk?

A clearer pipeline helps the supply chain respond

Better capacity planning should support suppliers as well as clients.

Suppliers need enough confidence in future work to recruit, train people, invest in equipment and reserve specialist resources. An unclear or constantly shifting pipeline makes those decisions harder.

Long term visibility can have a direct effect. As part of its £12bn RIIO-T3 programme, SP Energy Networks has given 19 suppliers access to up to £5.4bn of work over ten years. One of those suppliers has already expanded its operations, created additional jobs and increased its apprenticeship activity.

This demonstrates an important point. Capacity is not only something organisations find in the market. Clients can help the supply chain build capacity by providing earlier visibility and greater confidence in the work ahead.

That requires a credible demand signal based on current plans.

Planning and capacity need to be managed together

Capacity cannot be understood separately from the procurement and delivery plan that creates the demand.

Programme, procurement and supply chain teams need to be able to answer questions such as:

What work do we expect to procure over the next few years?
Which projects, sites or delivery partners are creating that demand?
Which suppliers and service categories appear most frequently?
What work has been planned, assigned or awarded?
How does future demand compare with current spend, workload and agreed capacity limits?
Where could several projects compete for the same supplier or resource?
What has changed since the previous review?

Answering these questions once is useful. Being able to revisit them as plans change is much more valuable.

When a project moves, teams should be able to see the effect on future demand. When a supplier wins new work, its capacity position should be reviewed. When exposure approaches an agreed limit, commercial teams need enough time to consider alternatives.

This is what turns capacity planning from a periodic reporting exercise into an ongoing part of programme management.

Creating a live view with IAND

To help respond to this challenge, we worked in collaboration with the industry to develop a new Forecast suite to help clients gain a live view on capacity and demand across their suppliers & services.

IAND’s Forecast suite brings procurement plans and supplier information together across a project portfolio.

Teams can consolidate planned work from different projects and delivery partners, while retaining the information needed to manage each individual plan. Packages can be connected to suppliers, services, sites, programmes, budgets and procurement dates.

This creates a shared view of:

Planned procurement and delivery activity
Assigned and awarded values
Supplier workload across projects and plans
Forecast demand over several years
Capacity limits agreed for the portfolio or an individual supplier
Emerging risks where expected exposure exceeds those limits

Plans can be updated as dates, budgets, suppliers and delivery assumptions change. Teams can then review the effect across the wider programme without recreating reports or manually comparing separate spreadsheets.

With earlier visibility on where individual suppliers are overheated or pinch points in demand, it gives procurement, commercial and programme teams the insight to act. Teams can test the impact of bringing procurement forward, changing how work is packaged, engaging alternative suppliers or working with an existing supplier to build the required capacity.

From a snapshot to an ongoing process

Capacity planning does not require a perfect forecast. Infrastructure programmes will continue to change, and suppliers will continue to respond to opportunities across the market. The aim is to maintain a reliable shared view of planned demand, current commitments and the areas where capacity risk may be increasing.

Organisations that can see those changes earlier have more options available. They can engage suppliers sooner, provide a clearer demand signal and adjust their procurement plans before a capacity constraint becomes a delivery problem.

Want to find out more?

To find out more about how this feature & how it could support your programme, please do get in touch.

There is more information on this feature on our product page here.