3 proven procurement strategies in construction
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Time to refresh your procurement strategy? Explore 3 ways to manage procurement of construction materials.
If you work in construction, you don't need us to tell you all about the importance of procurement – still less the challenges faced by so many in the industry.
Material prices yo-yo up and down. Supply chains are about as smooth as a cactus farm. Budgets overrun. The technology you use lets you down. The suppliers and other third parties you work with let you down, too.
All of this matters because it leads to delays and errors in already complex and stressful projects. Without a tried-and-tested procurement strategy, you're unlikely to deliver on time and within your budget.
So, what's the answer? Well, if it could be summed up in a sentence, you wouldn't be scouring the internet for answers. The truth is that successful procurement depends on a range of interlocking factors.
Your workflows need to be connected. Your materials need to be visible at all stages of the supply chain. But most of all, perhaps, you need a strategy.
There are three main procurement routes:
- Design-bid-build
- Design and build
- Management contracting
Each comes with its own advantages, disadvantages, challenges and opportunities.
On top of this, you can't overstate the importance of a strong relationship with your suppliers – and a good choice of supplier in the first place. Without this, you're putting your project at the mercy of people without your best interests at heart.
It's not easy. But with a bit of planning and a lot of oversight, your construction firm can adopt a procurement strategy that puts profitability first. Here are three ways to do it.
Proven construction procurement strategies
1. Design-bid-build
Design-bid-build is a traditional and widely used procurement method in the construction industry.
It splits delivery into two sections. First, the client hires a design team of architects and engineers to complete the design. Next, a contractor is chosen through a bidding process. They set to work on construction.
The main advantage of this method is that it provides cost certainty. By splitting the project into distinct phases, the project as a whole becomes easy to document. What's more, the client has a high level of control over the final design.
There are two main disadvantages. First, the fact that one stage follows another can lead to delays. Secondly, the contractor's lack of involvement in the design phase can create issues when construction begins.
2. Design and build
Design-bid-build involves splitting the project into two stages, each with its own team. Design and build (D and B) makes a single contractor responsible for both the design and construction of the project.
The advantages of this procurement strategy are clear. The project gets delivered faster – and responsibility is clearly allocated. Overall, projects delivered under the D and B strategy tend to cost less than their traditional counterparts.
Conversely, the client has less control over the design than in a design-bid-build strategy. What's more, the focus on cost efficiency can negatively impact the quality of the finished project.
3. Management contracting
In this procurement strategy, the client hires a management contractor to oversee the project and coordinate all the necessary trade contractors.
Management contracting is often used when a project needs to be fast-tracked. It provides flexibility over design, quality through specialist subcontractors and the transfer of risk to the contractor.
The disadvantages, however, include the lack of a fixed price at the beginning of the process and a heavy reliance on the contractor to solve all problems and achieve all things. If given to the wrong contractor, the client can quickly lose control over the project.
The importance of a good supplier
The procurement strategy you choose matters. But an oft-overlooked aspect of procurement is the importance of getting the right supplier, not just the right or the most cost-effective materials.
It's no exaggeration to say that, at the time of writing, supply chain disruptions are the norm – not the exception. This makes it more important than ever to build strong relationships with suppliers to maximise your chances of continuity.
Continuity isn't just about giving you an easy life. It's also about keeping all stakeholders happy. After all, if your supplier doesn't deliver the goods, it's not them that gets the blame – it's you.
What makes a supplier a good supplier? There's no quick answer to this. But strong communication and industry accreditations are both valuable markers of trustworthiness.
You should know early on if your supplier is good at communication or just has the gift of the gab. Simply ask them a difficult question and see how they react. If they try to blind you with science, dodge the question or straight-up lie, you'll know they're not a partner you can rely on.
The same goes for accreditations. Take a look at their website. Are there products made in line with the industry accreditations relevant to your project? If the answer is "no" – or even "not sure" – then it's time to look elsewhere.
Finally, it can be a good idea to work with a supplier that does more than one thing under one roof. In the case of glass procurement, for instance, you may want to work with a supplier like us where manufacturing, processing and delivery are all done from the same facility.
By working with a supplier that does everything under one roof, you drastically reduce the chances of delays. After all, if your glass is cut in one place, treated in another and delivered by a third company, you run the risk of being let down not once but three times.
What's more, working with a supplier that takes care of everything means you only have one party to blame in the unfortunate event that something does go wrong. This makes accountability more straightforward – and remedies quicker to find.
Are you looking for a new glass supplier? Founded in 1993, ToughGlaze supplies global architecture and construction firms with high-quality, compliant and fully customised glass products. Don't hesitate to contact our experts to discuss your requirements and how we can be a partner in your success.
