According to a survey study by Dodge Data & Analytics that approximately 93% of the contractors said that high construction cost has impacted their projects due to SC issues. Companies could grow and gain a competitive edge despite facing all the challenges and issues. It is significant to keep up with the latest SC trends so that you could recognize opportunities for your project and team. Today, we’ll discuss the construction supply chain management; its definition, main strategies, and examples.
What is Construction Supply Chain Management?
Construction supply chain management outlines strategies, systems, and processes that companies employ to deal with the movement of goods and materials in the construction industry. It comprises managing the relationship among various stakeholders involved in the SC process like owner, contractor, manufacturer, and supplier.
Successful SCM means the quick and cost-effective flow of construction material. It consists of the timely delivering goods and products within the specific budget. However, it means that the contractors should establish and implement projects efficiently and effectively.
Construction SCM Strategies
Some of the main improvement strategies for construction supply chain management are as follows;
Planning & Forecasting
When you have got tight SC processes, then costs would keep on changing, and that’s why it is significant to appropriately plan and forecast. It is necessary to pay heed to the events and trends like; disruption in the manufacturing process and increments in material pricing. It would impact the need for supplies, and factors involved while planning and forecasting your budget.
However, it allows you to implement such a solution that is easy to bid on and make changes. Cloud-based platforms would help you and other stakeholders to coordinate with other stakeholders in real-time. It lets you know when there is a change in price or if anyone makes changes and adjustments.
Selecting Right Partners
Various subcontractors, contractors, and suppliers should develop coordinate and collaboration with one another for the successful SCM processes. That’s why it is important that you should choose the right construction partner for your project. In the midst of facing SC challenges and issues, you should keep in mind the quality of goods and services while analyzing the potential suppliers and partners.
Supplier Management System tool allows you to track and review vendor information. Some tools and applications help you to put your supplier standards and requirements, and the potential partners and vendors would find whether they’re the right fit or not.
Clear Communication Process
You can resolve and avoid various types of construction issues with an effective communication system. It requires you to establish a process to make sure that everyone is receiving the information efficiently and effectively. The communication process you have developed is reliant on your team and project. You should keep in mind the following;
I-Material Availability
You should pay heed to the needed supplies, materials, and goods for the particular project where they are in the SC process. It is significant to beware of the material and supplies in the pipeline and determine whether everything is moving on the right track or not.
II-Potential Issues
It is significant to have a team of forward-thinking partners, it allows them to predict the potential issues. You should brainstorm various types of solutions with your contractors and vendors, and then take actionable steps if everything is working as planned.
III-Lead Time
It is significant to beware of the delays and price changes quickly and make sure that it comes to your attention ASAP. You should collaborate with various stakeholders to have a change course of action when needed.
Right Tools
It is no doubt technology decreases the risk factors and improves efficiency, but it is not a magic fix for all types of SC issues. Cloud-based construction applications help you to work smarter and deal with all types of material that you required to complete the project.
I-Better Insight
Various modern construction platforms and tools allow you to connect with suppliers in real-time and receive pricing data and quotes. It is critical to have an updated information system in a rapidly changing environment, and then it allows you to have accurate bids, quotes, and budgets.
II-Collaboration & Communication
If you are employing the right construction tools and software, then it would make it easier to connect with your team. Different stakeholders could collaborate and coordinate with each other in a single platform, which allows you to raise SC issues and updates and resolve them ASAP.
III-SC Workflow
Integrated construction applications allow you to collect data in the field and you can synchronize it with other systems like accounting software or ERP (enterprise resource planning). The integration amplifies various procurement and administrative tasks, saves time, and decreases irrelevant costs.
IV-Payment & Billing Processes
Integrated construction tools and applications simplify the relevant workflow, billing, and payment methods. For instance, you can allow subcontractors to send their applications online, and refer their requests to the project managers for immediate approval. Modern tools and applications would help you to perform the following tasks;
- Tracking payment status
- Updating online
- Decreasing back-and-forth communication
Examples of Construction SCM
Stratus
Stratus is a very good coordinating, manufacturing, procurement, and construction platform. It provides users the capability to develop advanced work packages, job tracking all within the digital environment, and on-demand reporting. However, it allows business executives and field personnel to make data decisions, increasing productivity, decreasing waste, and efficient communication.
MSUITE
MSUITE is cloud-based software and it allows you to connect with Field, Fab, and BIM construction teams to share, manage, and track data for measuring the health of the project.
- Suitable for modular, EPC, and MEP construction
- MSUITE amplifies project management, shop, and VDC visibility into the shop stat, material status, and design processes
Conclusion: Construction Supply Chain Management
After an in-depth study of construction supply chain management; we have realized that smooth and efficient SC processes play a significant role in productivity. If you are learning about the SCM in construction industry, then you should keep in mind the abovementioned strategies and examples.
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