AMP8, the current Asset Management Period for the water industry, which runs from 2025 to 2030, is now well underway. It’s the biggest investment ever made in UK infrastructure – more than double the latest estimate for HS2 – and represents a combined £104 billion investment package for water companies.
It sets out an ambitious improvement programme across clean water and waste water management, but with an unprecedented volume of work required by 2030 – and financial penalties for the first time if targets are missed – it also brings new challenges for water companies and their contractors.
Drawing on a new report from experts across the business, Simon Dennis, Managing Director of Wolseley Infrastructure, explores four steps to success in delivering the requirements of AMP8 and why the supply chain is critical to completing efficient, effective upgrades on time.
The sheer volume of activity confirmed in AMP8 is a significant step forward from previous AMP cycles and needs to happen in a relatively short timeframe. Managing that volume in the time period given is complex, even before you consider that water companies are already navigating other challenges and it all needs to happen on top of the day-to-day maintenance requirements.
Remember, AMP8 sets targets for the largest ever package of works in an Asset Management Period, introducing financial penalties for the first time if water companies miss targets and setting a stronger focus on Net Zero goals.
We recognise the importance of supply chain optimisation in meeting the targets, and we’re highlighting the value of collaboration to help those across the water industry achieve their goals. Drawing on our experience of working with water companies, we’ve published a new report that highlights the challenges of delivering AMP8 and sets out four steps to success.
Reshaping water infrastructure will not happen overnight, but this is how we believe the value chain can work together in pursuit of progress.
1. Engage suppliers early
Contractors aren’t always aware of the value that distribution partners can add, but trying to manage the volume of activity in the time period given is complex. That covers physical materials, the volume of resources needed to go and execute across all streams of work, and much more. We can support with many aspects, whether it’s forecasting, specification support or technical expertise and system design. But the earlier suppliers are involved, the more value they can add.
2. Prioritise the adoption of digital technologies
AMP8 prioritises digitalisation, with funding for those water companies that embrace complete digitalisation and data-driven operations. However, it is important to exploit opportunities within the supply chain too. Forward-thinking suppliers are increasingly supporting customers with digital systems to streamline procurement and invoicing, and at Wolseley Infrastructure, we’re actively looking into the potential of AI too. Using AI to analyse historical data enables insights to track seasonality and optimise forecasting, which ultimately results in better planning for contractors.
3. Plan equipment needs, not just materials
Contractors will typically plan projects for six months or more, confirm their take-off and plan delivery schedules, but too often they forget to plan equipment needs. With the volume of work planned forAMP8, this will be vital – especially when you consider other infrastructure projects like the Great Grid Upgrade, Network Rail’s Control Period 7 (CP7) and ongoing housing targets which are all underway in the same period. If hire equipment is not available due to short demand, it can lead to delays. It’s important for everybody to think proactively.
4. Exploit value engineering opportunities
The investment is there, but water companies know there will be penalties if the work isn’t completed on time or to budget. This is where value engineering can pay dividends. For example, switching to own brand products might not just save money for contractors, but also allow their suppliers greater control in busy periods, when branded products may be experiencing delays or shortages.
There is no doubt about it, the breadth and scale of AMP8 will bring unprecedented challenges for water companies, their contractors and others in the value chain before it comes to an end in 2030.The industry is likely to face significant operational, supply, forecasting and labour challenges between now and then, not forgetting wider construction sector challenges, other major infrastructure projects and the continued need for ongoing works that fall outside of the AMP8 scope. However, by working together as an extended supply chain, there is no reason why we can’t achieve success and exploit opportunities whilst embracing the challenges.
A blueprint for AMP8 success from Wolseley Infrastructure is free to download – simply visit: www.waterindustryjournal.co.uk/report-a-blueprint-for-amp8-success
