An effective supply chain is crucial in the property and construction industry to manage costs and run projects to tight timelines. In a market of uncertainty, particularly as Brexit approaches, it is more important than ever for businesses to consider their supply chain strategy to mitigate as much risk as possible.
Speaking to both employers and professionals in the sector every day, we have seen a growing number of construction companies taking an increasing interest in their supply chain to drive a greater level of control and performance throughout each step of the project. So, how do businesses build a better supply chain, and what key areas should be considered in the supply chain of a property and construction organisation?
How an efficient supply chain can benefit your business
Direct costs including products and services account for the larger part of construction project costs. Therefore, effective supply chain management can greatly affect the success, quality, and profitability of construction projects.
The benefits of effective supply chain management include:
- Increased profitability through greater efficiencies in delivery.
- Repeat business/partnering with key clients.
- Effective project planning and coordination.
- Fewer material defects which can hold back progress and increase costs.
- Client satisfaction based on a smoother, more joined-up delivery.
- The opportunity to establish a great industry presence and reputation leading to work referrals.
What does an ideal supply chain look like?
The construction industry is plagued with inefficiencies when it comes to supply chain management, which has driven many successful businesses to insolvency. Companies should embrace the latest technology that can allow them to streamline their supply chain and remove the labour intensive paper-based invoicing and signing off processes that some businesses still have in place.
The latest technology can also improve the availability of real-time information to the budget holders and project managers, which would, in turn, stop delays and problems before they occur. The technology that can equip project managers to avoid errors in the supply chain is available, it just isn’t being utilised. Equally, as important as it is to have the right technology, it is crucial that the right people are in key positions and are working in harmony to bring about a positive outcome.
One such business providing a range of technology and software to the construction sector is Causeway. They possess a full suite of solutions for construction businesses which serve to streamline key processes and the system provides powerful business intelligence reporting with proactive monitoring of contract KPIs. SCM technology such as Causeway can be utilised across multiple sectors and projects in the construction industry, and should now form an integral part of a company’s SCM strategy.
Effectively manage your supply chain: key skills
The purchasing and supply chain profession in the construction industry can possess a range of different job titles, depending on the elements required by the business and specific projects they undertake. Most companies typically have a particular model that works best for them. We have put together the job categories that are key to formulate and monitor the supply chain.
- Bid and business development
This role will generate a pipeline of new opportunities and projects that the business can explore. In order to put an effective bid together, it is important that a clear outline of the supply chain is present for a specific project, so that both the costs and quality of the delivery can be assessed.
- Estimating and buying
Estimating and buying professionals will be responsible for the pricing of upcoming projects and schemes. This requires in-depth knowledge of the existing supply chain processes the business has, alongside exploring new elements that a project may need, such as specialist labour or materials. Once a contract has been secured it is crucial that this is monitored closely, to ensure that schemes do not overspend due to unexpected costs.
- Commercial manager/quantity surveyor
The commercial team will assess what work is being delivered against a respective contract or scheme. They are also heavily involved in compiling the supply chain, in particular, the sub-contractor set-up to ensure the cost of delivery stays within the initial agreed tender price. They will also regularly assess what is being delivered against what was outlined in the initial contract, to check for variations in work. The commercial team will deal with clients and every element of the supply chain frequently and typically face-to-face, aiming for a collaborative approach.
- Operations and contract management
These roles will mobilise an awarded contract, pulling together the respective elements of the supply chain and ensuring that project start dates and key delivery milestones are adhered to. Close collaboration with the commercial function is key to ensure that delivery quality and costs are in good balance. They will also work closely with the client, meaning that excellent people and leadership skills are essential.
We have an extensive database of skilled professionals that are able to take your business to the next level. Get in touch with one of our specialist recruitment consultants today, who can help you to hire the best talent for your organisation. Alternatively, for more insight into the key skills for property and construction professionals, explore our article ‘10 skills propelling property and construction forward in 2019.’
Operating Director, Michael Page Property & Construction
T: 0115 948 6497