Optimising Construction Supply Chain Management for Efficient Project Delivery | RedSky

Optimising Construction Supply Chain Management for Efficient Project Delivery

For many main contractors, the supply chain is the lynchpin of their business. Subcontractors and suppliers play a vital role in the successful delivery of construction projects. It makes sense to manage and optimise their performance. 

In construction, supply chain management refers to the processes, systems and practices that companies and contractors use to optimise:

  • The flow of materials to the site
  • The availability of equipment
  • Collaboration between project stakeholders 
  • Cost control
  • Quality
  • Governance.

 

On a complex construction project, the work will usually be divided into packages which are then let out to subcontractors. An efficient supply chain management system will enable managers to retain control – and full visibility – of site activities, to make sure the job is delivered on time, to specification and within budget.

Impact of Inadequate Supply Chain Management on Project Profitability

When collaboration between the main contractor and the supply chain is poor, project costs can quickly spiral out of control, reducing overall profitability. 

According to research findings reported in March 2023 by business insurer QBE: “Three in five (59%) UK construction companies that have been hit by supply chain issues over the past year have seen once profitable projects turning unprofitable.”

Poor construction supply chain management can also expose main contractors to risks including injuries and workplace safety violations, legal and regulatory compliance issues, data and identity theft, missed contract deadlines and reputational damage. 

Challenges with Vetting Platforms in Construction

For many main contractors, the subcontractor supply chain is a primary pillar of business planning and strategy. We know from conversations with our main contractor customers that the lion’s share of their business revenues can depend on it.

Some subcontractor ‘vetting’ platforms provide external verification of health and safety policies and accreditations. Their primary USP is that they connect pre-qualified subcontractors and clients that have specific compliance requirements. 

However, if you’re on a vetting platform client database, you’re just one of many clients – the data associated with subcontractors is not uniquely available to you. And that’s a hefty shortcoming. Why? Because your subcontractor data is valuable; it should be owned and controlled by you and easily accessible across your organisation.

That’s why many main contractors are now looking to put themselves in the driving seat.

Taking Control and Optimising Supply Chain Management

Collaboration platforms (project information management solutions) have been around for quite a while now, including those offering software as a service (SaaS) – this is where the provider hosts the application and makes it available to customers online. But most will not enable you to optimise project outcomes or the governance and resilience of your supply chain. 

Our approach is different. As well as SaaS, the RedSky Supply Chain Management solution incorporates safeguards for construction businesses, including:

  • Pre-qualification – suppliers and subcontractors must complete robust vetting questionnaires before they can be ‘onboarded’ 
  • Register of suppliers and subcontractors – a central repository for information about your supply chain, providing advanced search capabilities 
  • Performance management – scoring your supply chain against a variety of criteria, to identify the superstars and highlight any that may need guidance, to help improve their performance in some areas.

One of the reasons why our solution is so different is that we developed it in partnership with some of our key construction customers. Listening to these highly experienced main contractors and identifying their needs was our starting point. And now, after more than three years of meticulous research and development, we’re proud to confirm that we’ve met those needs in full. 

RedSky Solution for Streamlining Construction Supply Chain Management

  • Is easy to use, to maximise adoption across the team
  • Maintains a record of all relevant capabilities, certifications and insurances
  • Incorporates a workflow-based notifications system that acts on approaching expiry dates by automatically sending out forms for the subcontractor or supplier to complete in a timely fashion without intervention by anyone on your team – if the insurance expires, their status will automatically move to ‘unapproved’ or ‘suspended’
  • Enables you to record a broad range of subcontractor characteristics, as well as a running narrative about them, such as new contract or award wins
  • Provides a standard list of fields, but enables you to configure them by amending, adding or removing text, number, date and dropdown fields to suit your business
  • Allows you to apply filtering or formatting, based on your needs
  • Applies workflow-based authorities to ensure that only properly approved subcontractors are issued with work orders 
  • Provides analytical capabilities across the system
  • Enables you to evaluate your subcontractors’ capacity to take on additional work (while also flagging up any subcontractors who are being overloaded)
  • Provides enterprise-wide reporting – you can review all the performance data and apply the findings for the benefit of your business. This process also helps you to acknowledge those who are meeting the standards set out in your supply chain charter
  • Enables you to temporarily ‘suspend’ poor performers or those not meeting the standards you have set for the business. 

If you’re a main contractor, our robust solution will help you manage your supply chain more efficiently and effectively.

See Supply Chain Management in action

 

Author: Chris Winson, Business Consultant at RedSky

Chris is a highly skilled professional with over 30 years of experience in helping project-centric organisations adopt construction-specific solutions. His expertise lies in improving process efficiencies and maximising margins. Since 2016, Chris has specialised in the construction sector, bringing his deep knowledge and understanding of the industry to deliver exceptional results. To learn more about RedSky Supply Chain Management, please contact Chris Winson at 0034 613 903 283 or via email at chris.winson@redskyit.com.