What is supply chain management in construction?

What is supply chain management in the construction industry?

Supply chain management in construction is all about getting materials from A to B, as efficiently as possible. Now, as simple as it might sound, there’s a lot more to it. It involves the processes, systems, and practices surrounding this, including managing relationships with third parties like manufacturers, suppliers, contractors, and owners.

Why review your supply chain process?

Building a smooth supply chain management system means quality products and materials that contractors need to carry out the work is delivered at the right time and within budget. Having a solid supply chain for your construction projects will ensure efficiency and have the potential to have massive savings. See below for examples of how supply chains have been used in construction.


Benefits of supply chain management in construction

We understand what supply chain management in construction is and how it can benefit businesses on a surface level, but let’s dive deeper into what improvements construction businesses can see from effective supply chain management.

Win more tenders

Building a reputable business that people trust is invaluable. And if you’re able to manage a supply chain that can execute excellent and efficient projects, you’ll inevitably win more work, because they’ll want to partner with you again. It’s so much easier for clients to stick with you for other projects if they think you performed well.

Save on costs

You’ll save money by reducing areas of waste. Effective supply chain management in the construction industry helps your business avoid overspending, by only spending on what’s needed. You’ll benefit from being able to identify areas you could potentially save on costs, meaning you’re more likely to stick to the budget, and ultimately boost profits. All from optimising your supply chains!

Creates a more organised team

The transparency of fantastic supply chain management is what keeps contractors and other third-parties in the know. As long as the correct systems are in place, you’ll be able to track products and supplies along the supply chain, so you’ll know exactly when things have been delivered and installed.

It also helps to allocate staff resources effectively for when the construction materials are delivered, so they can get to it right away. The proactivity on a project can be the difference between a speedy installation and a delayed one.

For example: In shipping ports it is customary to be given a time slot to unload all the materials and products from your container. Not doing so will incur overtime fines so managing staff in your supply chain is crucial to avoid time-based penalties like this.

Mitigate supply chain risks

Continuing on the topic of proactivity, construction supply chain management can help mitigate supply chain risks by developing a plan B. Knowing the potential risks allows you to prepare for a situation where a part of the supply chain might be unable to fulfil their responsibilities. So then you can respond and keep the project moving forward!

Take a look at the rest of the benefits of supply chain management.

What are potential supply chain risks in the construction industry?

Potential risks for construction supply chains can include:

Materials shortages

Most recently in 2022 and still ongoing in some industries for 2023 the construction industry has a crisis in the supply chains. Leading to increased prices and lead times throwing most projects months off schedule.

Labour shortages

In the construction industry there’s only a limited number of skilled workers, due to the high risk nature of some projects and complexity. Businesses are struggling to hire candidates with relevant skills. In a survey by ONS in November 2022, the percentage of businesses experiencing a shortage of skilled workers was between 12.9% and 15.4% since October 2021, with the exception of August 2022, when 16.8% of businesses reported a shortage.

The industries with the highest percentage of businesses experiencing worker shortages in November 2022 were Accommodation and food services (35.5%) and Construction (20.7%).


Deliver efficient projects with Smas

If you’re looking to increase the efficiency of your projects, then why not take a look at our Supply Chain Management service? We’re an SSIP registered member!

Want to further improve safety on your projects? Book your Site Supervisor Safety Training Scheme (SSSTS) course today, and take your business to the next level. Our courses are completely online and are delivered by a CITB qualified instructor.

Our SSIP certification has tens of thousands of contractors signed up, and your business could be next. Become a Smas Worksafe consultant and help transform the Health & Safety of your business with our WorkSafe PQQ packages. We have a range of SSIP packages tailored to suit your industry’s health and safety needs.

Contact us today and speak to one of our experts to find out more. Let Smas Worksafe ensure your business is compliant and secure more tenders.