Ian Holcroft is Procurement Director at J, Murphy & Sons, a global, multi-disciplined engineering and construction company which operates in the United Kingdom, Ireland and Canada.
For our latest CPO Spotlight, Ian spoke with Dan Goodson, Head of Industrial Practice, about his career with J. Murphy & Sons and advice to individuals starting their journey within Procurement.
Please introduce yourself and give an overview of Murphy Group.
Murphy Group is a family-run business. It was set up in 1951. Our current CEO is John Murphy, who is the grandson of the original founder. We work in the construction industry and operate in the UK, Ireland, and Canada.
The turnover is around £1.5 billion, and we have approximately 3,500 employees. The main sectors we work in are Rail, Energy and Water, and we work for key Clients in the sector such as Network Rail, National Grid, Thames Water, and United Utilities.
Our core focus is delivering world-class infrastructure for our clients, including building tunnels, substations, installing pipelines and high voltage cables, constructing water treatment plants and bridges over railway lines etc…..playing a key role in maintaining and building the infrastructure in the countries we operate in.
As for me, I have been with Murphy for five and a half years, which has flown by. I have spent over 30 years in the Procurement and supply chain in the construction industry.
Prior to joining Murphy, I spent two years at Hinkley Nuclear Power Station, heading up Procurement for the BYLOR Joint venture and prior to that, four years in Australia heading up Procurement and Supply chain for Laing O’Rourke, where I set up the function from scratch.
What made you decide to transition from your previous role to Murphy?
I made the transition after having an in-depth conversation with John Murphy and other Executives of the company. They presented a compelling vision for the future of the business and where they wanted to take it.
Additionally, it felt like the right time for a new challenge, as I had spent nearly 24 years with my previous employer. Joining Murphy has been a great move, and I thoroughly enjoy working for this fantastic growing business which has a clear vision, values and drivers that set us apart from others in the industry.
What was your mandate when you joined Murphy five years ago?
When I joined Murphy, Procurement and Supply Chain had a poor reputation.
I began by understanding the concerns and challenges of several our key stakeholders, such as the Managing Directors and Operations Directors, of each of the Business Units so that we could formulate a clear Procurement Strategy and Plan that everyone could buy into.
The transformation initially focused on restructuring the team and emphasising the importance of providing an excellent service to our projects and bids, as fundamentally we are a project-based business.
The previous fully centralised model just does not work in our industry. We now operate with a small central team handling framework agreements, such as PPE and travel, with the remainder of the team embedded in the individual business units and where appropriate on our major projects.
We are now seen as very much part of the business and as a value-adding, proactive function.
How does the structure change when working on joint ventures (JVs)?
In JVs, it is important to build a strong relationship with your partner whilst ensuring that you embed your own companies values into the partnership.
In the majority of JVs we operate in, we take the lead on procurement due to the expertise we now have in the team.
I would encourage people to embrace the opportunity to work on JVs, as it provides a different working environment and valuable learning experiences as your JV partner will bring different skillsets and knowledge to the project.
What do you think are the biggest challenges facing the sectors that Murphy is working within?
In terms of prices and material availability, the market compared to the last few years is relatively calm.
We have survived the perfect storm of unprecedented price increases from the supply chain, extended lead in periods and even product allocation caused by the combination of Brexit, COVID, the conflict in Ukraine and the resultant spiralling energy costs.
In many ways, we have come out of the challenge even stronger; as procurement and supply chain have been given even more visibility and importance at the top level within our organisation; and during those challenging times we did deliver as we have kept supply going to our projects; demonstrating that resilience from the procurement team and supply chain was needed more than ever.
That said there are still challenges today:
- Pricing volatility does remain around certain commodities.
- Although we as Murphy have emerged from the macro-economic challenges in a much stronger position, I do have concerns about the financial stability of some of our supply chain partners which is now a key focus.
- Key Projects such as HS2, Lower Thames Crossing being delayed could lead to some of our competitors becoming more desperate to secure work, destabilising prices in the industry. That said, we are fortunate in that we have a very strong future order book.
- Increase in cyber-attacks hindering our supply chain which is a current real threat.
- Ensuring that our supply chain are on their ESG journey to meet the demands of both ourselves and our clients.
- The war for real talent continues and that is why I embarked on a “grow our own” strategy via graduates and apprentices a number of years ago which is starting to reap benefits.
What are your key areas of focus?
Over the last 5.5 years, I have transformed the function so that we are seen as a value-adding proactive function rather than a reactive one that is a blocker and I want us to continue that journey developing a Procurement Strategy and team that supports the business and our values.
- Continue to be a trusted advisor to the Main Board and Business Units MDs
- Ensuring that the Murphy Values and Strategy are embedded into the supply chain e.g. on ESG, Health & Safety etc.
- Improving how we as procurement contribute to winning work for the business.
I am also Project sponsor for our E-Commerce journey: which is part of our digitalisation strategy: This includes E-invoicing, E-Catalogues and E-GRNs and we go “live” later this year.
The rise in cyber-attacks poses a new challenge for both us and our supply chain partners, and we are actively helping in this space.
And how involved is the procurement function in Murphy’s sustainability commitments?
We are completely embedded in the company’s sustainability commitments. I sit on our main ESG Committee, with other key Directors.
As procurement, we have just produced a document that sets out our minimum expectations of the supply chain in terms of sustainability.
It covers a wide range of topics: community engagement, social value, supplier diversity, modern slavery, energy and carbon, biodiversity, water, air quality, ethical sourcing, circular economy, specifics on timber, steel and concrete.
The document sets out our expectations over the next few years: this year, next year and 2025.
It has been issued to a number of our key supply chain partners and from the responses, we will be able to analyse the data provided which will give us a great position of understanding where the supply chain is up to on their journey, and how we can potentially help them; and going forward we will aim to give this a weighting when we are doing the analysis on tender returns with the aim that weighting increases year on year.
We have also been heavily involved in the production of the Murphy Procurement Green Guide, which highlights several greener products being manufactured by a number of our key supply chain partners that are available for our projects to use. This has been a great success to date.
We are also working with the Supply Chain Sustainability School, on developing a Learning Pathways education programme on sustainability helping to upskill our people.
What control factors do you consider in procurement?
To me, that is all about governance, structure, process and procedures:
In terms of Governance and what we have as an overarching procurement policy: which sets out the key principles, of how procurement and our supply chain, will operate, in support of the Murphy values and strategic drivers.
We have a procurement strategy, that sets out what we are here to do in terms of purpose, contribution we make, governance, our supply chain and our people.
We have a procurement plan that sets out high-level targets on what we want to achieve in terms of the central team, the Business units and developing our people.
We also now have a procurement sustainability policy that sets out how we as procurement at Murphy can help to reduce our environmental footprint and have a positive and sustainable impact wherever we work. These documents are updated every year.
In terms of structure, we are very much aligned to give 100% support to our projects and the wider business.
We have a small central team setting up frameworks agreements on travel, fuel, PPE etc, a small bulks team dealing with some of our key commodities such as concrete, aggregates and waste and then teams embedded in each of the BUs and where appropriate on the projects themselves. We also have teams in Ireland and Canada.
In terms of process and procedures, these are clearly defined in our internal management system. These cover prequalification of the supply chain, how we support work winning, our central procurement operation, how we buy for our projects and supply chain performance reporting.
In addition to all that, I feed into the group’s Risk and Opportunity Committee, and risks that potentially affect the business from a supply chain perspective are known about at the highest level.
What advice would you give someone looking to develop a career in procurement?
Ensure you have real passion for procurement and supply chain, and if you don’t – do something else because with the passion comes the drive and with the drive comes results.
After 30 years I still look forward to making a difference through procurement and supply chain.
Ensure you develop the strongest team around you as this allows you to do and influence more, and to become that trusted advisor; and to me, the supply chain is part of that team, as collaboration with your supply chain partners leads to better results for all.
Always say yes to opportunities and especially to the ones that take you out of your comfort zone as this will help you to expand your experience and learning.
For example, when I was asked to go to Australia, I took the opportunity and ended up spending four years there, setting up a function from scratch. A fantastic part of my career.
Continue to keep relevant to the future direction of the business and what is happening in procurement outside your organisation. In other words, keep close to the pitch and out of the stands.
And finally, never ever forget to look after the mental health of not only yourself but of those that are around you as best you can. Ensure you have a key focus outside work as this will help with work.
What do you look for when hiring into your procurement team?
Experience – You need to know your trade.
Attitude – positive and can-do attitude.
Willingness to learn. The function and our responsibility is ever evolving. What I do now compared to what I did when I started are completely different.
People who are team players and have the ability to influence.
People who want to build a long-term career at Murphy.
Finally, do you see the value of utilising experienced interim procurement professionals?
In the right context.
My overall strategy is to grow my own team, starting with apprentices and graduates, with on-the-job and professional learning – via CIPS, and it is a strategy that is working.
That said, we have used interims in the past and if we were looking for a specific skill set for a specific role then we would certainly consider it again.
