A leading pub chain is slashing the number of contractors it works with from 5,000 to just 25.
Enterprise Inns wants a network based on a geographical location, where each contractor is responsible for up to 500 properties.
Each contract is worth £2 million to £4 million per year, which amounts to the £100 million the leased and tenanted pub company spends on its 7,800 pubs every year.
Thirteen contractors have been signed up and this number will eventually be increased to 25. This will make partnering the only procurement method for Enterprise Inns, which last year turned over £921 million - down on the previous year’s £970 million after summer floods caused the temporary closure of over 200 of its pubs.
The firm is looking for construction partners that are experienced in the pub market and also those who have infrastructure management experience.
Contractors will need to go through a three-day induction programme if selected. Pub company staff will spend a day in the offices of each contractor, helping them to understand the business better.
Payment processes and health and safety criteria will also be addressed, which head of property at the group, Russell Burton, said would shift the focus away from cheapest price to quality and delivering on time.
He added: “We believe that once contractors feel part of our operation they will deliver a better job.”
Under the new structure, contractors and suppliers will be involved with the initial planning and design phases of major projects. They will also be given regular reviews and appraisals, similar to those for full-time staff.
Trading for the pub operator, which has a market value of £2.3 billion, was patchy over Christmas, with pub/restaurant firms outperforming the traditional tenanted operators.
Analysis: Building commitment
By Russell Burton
It was clear that in order to ensure quality across our pub estate, we needed to invest in our relationships with core contractors.
That’s why we’ve put in place a new system that will see contractors receiving a full induction programme.
We hope this will help them feel more confident about our commitment and better understand our business and requirements.
By standardising and simplifying partnerships, we hope to significantly improve buying effici ency and increase the quality of the service we receive.
At the same time these integrated partnerships will provide more security for our preferred supply chain.
It’s a new approach and we intend to work with our contractors as if they were employees.
Russell Burton is head of property at Enterprise Inns