What is Supply Chain Management in Construction and Tips for Optimising your Construction Supply Chain

You might be wondering how to get a handle on all the moving parts across your Construction supply chain.

In this blog, we will explore some top tips to help you streamline your construction supply chain processes, boost subcontractor compliance, and manage supply chain risk more effectively. Whether you’re looking to improve financial stability, adopt new construction supply chain management tools, or simply make your operations run more smoothly, we’ve got you covered with easy-to-use solutions for the construction industry.

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What is supply chain management in Construction?

Supply chain management in construction is the strategic coordination of materials, services, and information flow between construction subcontractors and suppliers to main contractors and project managers. This is a critical process which ensures efficiency, cost-effectiveness, and delivery of projects on time and within set deadlines.

For construction subcontractors, construction supply chain management involves organising their workforce, scheduling deliveries, and managing building materials and supplies. On the other hand, Construction main contractors focus on hiring and managing the entire construction supply chain across multiple construction subcontractor businesses. Mastering construction supply chain management is essential for construction businesses aiming to boost productivity, reduce waste, and maintain a competitive edge in today’s vulnerable building landscape.

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Benefits of supply chain management in construction

In the UK construction industry, effective construction supply chain management is crucial for a project’s success. It’s one of the most complex processes in the sector, and acts as the foundation of successful project completion. Without reliable Construction supply chain management software, you run the risk of material delays, unexpected costs, and, potentially in the worst cases, project failure.

From sourcing materials to coordinating with subcontractors, the way you handle your supply chain can significantly affect your project’s efficiency, sustainability, and bottom line.

1. Cost Reduction and Efficiency

As a main contractor, optimising your construction supply chain can have a significant impact on your bottom line. Tools like Risk Radar and Marketplace Find Supplier can help with just that.

Supply chain costs, which include inventory, transportation, and warehousing, can make up a substantial portion of a company’s expenses. By streamlining such processes throughout your construction supply chain, you can lower these costs considerably by:

• Ensuring your subcontractors are utilising effective inventory management systems and processes
• Having oversight on historical data of subcontractors’ overheads and finances to help with forecasting demand and capacity to meet financial demands of the project accurately and to understand the financial risk
• Negotiating with suppliers for better pricing or delivery terms

2. Improved Project Timelines

A well-functioning construction supply chain ensures that materials and subcontractors are available when and where needed, enabling your project to progress smoothly and on schedule. This is particularly important in the UK construction industry, where delays can be costly and risk damaging your reputation.

It’s crucial to start planning and building your compliant construction supply chain as early as possible, enabling you to:

• Identify the skills and industry experience of the subcontractors you need to complete your project
• Compare costs and financial profiles of multiple subcontractors in your supply chain
• Develop strategies to mitigate potential risks, such as identifying backup subcontractors with the correct compliance levels that align to your goals

3. Enhanced Quality Control

Another vital aspect of managing your construction supply chain includes selecting subcontractors who are able to demonstrate their construction compliance and quality control.

To ensure and maintain the quality control in your construction supply chain:

• Clearly define quality standards so all parties understand what’s expected in the finished work
• Conduct regular inspections as part of a thorough quality assurance plan
• Use standardised quality control checklists to simplify the inspection process
• Make time and tools available to address deficiencies in the construction supply chain as they arise

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Key Strategies and Top Tips for Optimising Your Construction Supply Chain Management Processes

Utilising a Construction Supply Chain Management Software Solution

By adopting digital solutions and software, such as Marketplace, you can significantly improve the coordination and visibility you have across your supply chain. 

Construction supply chain management software is a game-changer for both main contractors or buyers and, subcontractors. From one central platform login, you are able to streamline workflows, manage construction suppliers and ensure compliance all from within one construction supply chain management tool. 

Within Marketplace you are able to: 

		Find Leads – Quickly search through thousands of opportunities from a wide range of portals and get instant, tailored results that are relevant to you. Search through over 500,000 leads including expert verified market intelligence, public leads, buyer published expressions of interest and invitations to tender.
		Find Suppliers – Access our network of over 70,000+ subcontractors across 4,800+ work categories throughout the UK, to find the right subcontractor for your next project
		Invite Suppliers – if you already have a list of construction subcontractors you want to onboard for your next project, you can invite them to join Marketplace and benefit from having all of your subcontractors on one platform
		Publish projects and work packages with ease – Publish opportunities targeting verified subcontractors from your existing supply chain or discover new subcontractors from our network of over 50,000+ businesses
		Manage your tender management processes – Save up to 75% of the time spent in enquiries with the #1 Tender Management tool in the UK

Establishing clear communication channels between you and your subcontractors

Effective communication between subcontractors and construction buyers or main contractors is the cornerstone of successful construction supply chain management. To ensure smooth operations, it’s crucial to establish a good line of communication that includes identifying points of contact with contact information for key team members between you and your selected construction subcontractors. This approach ensures that information gets to the right people at the right time. 

By attending one of our Marketplace Live construction networking events and signing up as an exhibitor, you can connect with subcontractors in your existing Construction supply chain, as well as meet new subcontractors who want to work with you.  Whether you’re looking for subcontractors in the construction, facilities or materials sector, Marketplace Live is the perfect place for your business to meet quality subcontractors in the area to discuss new supply chain opportunities in the local area.

Meeting your subcontractors face-to-face at one of our events is a great way to establish good communication right from the get-go. This means you can communicate your needs and ensure your subcontractors can align with your goals across your entire construction supply chain.

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Overcoming common Construction supply chain challenges

Mitigating risks of material shortages

In the UK construction industry, material shortages have become a significant challenge, with price increases and deliveries of materials decreasing in volume. To tackle this issue, it’s important to focus on diversifying your construction supply chain and improving communication between you and your subcontractors. By ensuring your subcontractors have established relationships with multiple reputable suppliers, you give yourself backup options when one supplier can’t deliver.  This approach helps you maintain continuity of supply and reduces the risk of projects getting stalled due to non-availability or delayed delivery of construction materials.

By using a construction supply chain management software solution, you can pick the most optimal prequalified construction subcontractors for your next project.

Addressing sustainability concerns

Sustainability in construction supply chains is not just a moral responsibility, but also a legal obligation. In the UK, around 37% of global emissions are attributed to the construction and building sector. To address these concerns, it’s important that you understand what your subcontractors are doing to align to the environmental and social values needed to focus on minimising the negative impact construction projects can have on the environment. This approach can unlock a range of benefits, including cost reduction and improved profitability. For instance, by choosing the right approaches, you can reduce the carbon footprint of your Construction supply chain and save money.

At Constructionline, we know you need to be able to show that social value is a priority throughout your supply chain. We make it simple for you to find subcontractors that are aligned with your social value strategy through our social value question sets.

Adapting to regulatory changes

Regulatory changes in the UK construction industry are driven by various factors, including advancements in technology, shifts in government policies, environmental considerations, and changing societal expectations. These changes can significantly impact your construction supply chain strategies.

To effectively navigate regulatory changes in the UK construction industry, it’s important to ensure you have transparency over your construction subcontractor’s compliance levels and how they are aligning to evolving standards. Constructionline’s Marketplace platform offers an easy way to assess your subcontractors’ compliance, helping you meet industry requirements. Through our supplier membership, we verify the credentials of subcontractors, ensuring they adhere to standards like the Common Assessment Standard and SSIP. We are always keeping our regulatory checks up to date, ensuring the subcontractors on our platform are aligning with the latest regulations, such as the Building Safety Act and the Procurement Act. Our centralised compliance checks streamline construction procurement processes, reduces risks, and offers transparency across your supply chain.

 

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Conclusion

Effective construction supply chain management has a significant influence on the success of construction projects across the UK. From optimising costs and improving timelines to ensuring quality control, it plays a crucial role in ensuring construction projects succeed. By embracing technology, establishing clear communication channels, and using solutions like Marketplace and its construction Supply Chain Management solutions, construction main contractors can streamline their operations and boost efficiency.

Sign up to Constructionline to gain access to our Construction Supply Chain Management platform today!