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Water Procurement

Tesco – Water Supply Procurement

Project Scottish Water Supply Procurement
Location Scotland
Classification Water Procurement
Sector Retail

supermarketOverview

The introduction of the Water Bill in May 2014 will revolutionise the water landscape in England, removing the monopolistic approach of water supply determined by geographical location. This change will enable non-household water users to switch suppliers, negotiate supply contracts and demand improved customer service from April 2017.

In preparation for English market opening, Tesco took the opportunity to use the Scottish market where retail competition already exists to test Waterscan’s procurement service, gain experience on the retail services that could potentially be achieved in England and at the same time optimise current supply agreements in Scotland.

Results

6% – Saving on previous water supply contract
21% – In excess of 21% saving on standard retail pricing
£750k – Cost equivalent savings per year
6 – Tenders submitted and reviewed
£0 – No mid-term cancellation fee
Successfully managed switch to alternative supplier from incumbent

The project

To ensure Tesco’s procurement procedures were followed a well-defined and structured process was needed. Partnering with Waterscan and utilising the Water Supply Procurement service ensured this and enabled Tesco to make an informed decision on their water retailer by utilising expert knowledge to achieve the best results. The Waterscan service included solution design, market review, competitive tender and contract negotiation, all tailored to Tesco’s own online tender system.

This bespoke solution was built quickly and the tender documentation issued within the customer defined timescales. Online responses were collated and scored to reflect the importance of the tender criteria to the customer. Retailers were then shortlisted and invited to present their offers to the Tesco procurement team which included Waterscan’s tender manager to provide further expert advice. Once negotiations were complete and a new retailer had been contracted, Waterscan managed the switch to ensure correct billing data was transferred to the new retailer and any central market agency discrepancies were resolved.

Quote

“Through working with Waterscan on our Scottish water supply tender, we have secured the best deal possible whilst ensuring all our key supply criteria have been satisfied. They tailored their tendering process to fit existing Tesco procurement practices ensuring it integrated smoothly with our usual systems.

Waterscan supported with the review of received bids, utilising their water company charging structure knowledge and expertise in the retail industry to assist with short-listing and the final selection of supplier. Their approach was comprehensive and professionally independent, with Tesco’s best interests at the core of their work. We would have no hesitation in recommending Waterscan’s services for water procurement and look forward to working with them again when the competitive market opens in England in 2017.”

Catherine Chebib
Buying Manager – Renewable Energy & Environmental Generation Technologies