Originally Published on: SpendEdge |The Not-So-Secret Sauce of Winners in Construction Procurement
The Construction Landscape's Current Mood: In the global construction sphere, optimism prevails but cautiously so. Massive U.S. federal highway programs and global infrastructure projects signal hope. Challenges persist, including supply-side bottlenecks and rising costs, demanding strategic workforce augmentation. Amidst these dynamics, embracing resource-saving practices becomes crucial for avoiding project delays and penalties.
Construction Time Management as the Financial Key: Delayed project completion poses risks like increased costs, surpassing budgets, and potential pre-payment refunds with interest. Brand credibility suffers, and legal battles loom. Effective time management practices become the linchpin in this scenario, ensuring cost control and on-time project delivery.
Budgeting at the Core of Construction Procurement: Stakeholders expect projects to close on time, within budget, and with high quality. Budget adjustments based on actual performance prevent delays and cost overruns. Viewing budgeting as a thoughtful process is vital for successful construction procurement outcomes.
Critical Role of Supplier Selection: Contracting with the right suppliers is paramount. Contractors must ensure quality work, a safe worksite, and adherence to health, safety, environment, worker rights, and governance standards. Injuries and fatalities at worksites contribute to substantial costs, emphasizing the need for vigilant contractor selection.
How SpendEdge Enhances Construction Procurement:
Build Better Budgets:
- Procurement involvement in budgeting for accurate financial plans.
- Sourcing experts assist in developing precise procurement methods for construction.
Improve Supplier Selection:
- Identification of tier-1 suppliers with client-defined KPIs.
- Consideration of factors like total cost of ownership, reliability, timeliness, and compliance.
Enhance Fulfillment Efficiencies:
- Bespoke solutions for visibility and communication across the supply chain.
- Mitigation of potential bottlenecks for streamlined construction procurement.
Success Story: US Steel Industry Procurement Transformation: A mid-size U.S. steel manufacturer partnered with SpendEdge to enhance budgeting accuracy and forecast construction procurement costs. Through meticulous analysis and insights, critical areas of spending were identified, leading to renegotiations with existing suppliers and seeking more efficient alternatives. The client's proactive approach to supplier network expansion and strategic deal renegotiations showcased positive financial outcomes.
