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How Logistics Can End the Race to the Bottom
In the world of construction logistics, there’s a stereotype that needs to be shattered. No longer should logistics be seen as just warehouses and trucks. Today, we’re diving into how a single logistics company can level up the entire supply chain, save customers hundreds of thousands of dollars, and allow you to charge properly for providing a premium service. Let others fight over the scraps. If you want to make real money, keep reading.
Why Do Construction Supply Chains Struggle?
Unlike other industries, construction supply chains often seem chaotic and inefficient. Retail supply chains, for example, are well-oiled machines. So, why is construction different? The main reason is that every project often involves new suppliers. Even if you develop a great process with one supplier by the end of a job, the next project will likely have different suppliers, meaning you have to start over.
Managing logistics for multiple suppliers on a single project can be overwhelming. This constant reset forces companies to default to the lowest common denominator, driving down service expectations and prices. However, breaking this stereotype can unlock enormous potential. A Tier 1 builder we work with saw a 30% reduction in subcontractor quotes simply by having a robust logistics process. They could promise quicker completion and lower prices due to their streamlined logistics. This is an unheard-of competitive edge.
The Power of Polished Logistics
A well-executed logistics plan can dramatically improve project outcomes. For example, a Tier 1 builder experienced a 30% reduction in subcontractor quotes thanks to their superior logistics process. Although they were acquired and may no longer use this process, the playbook remains for anyone willing to adopt it. This demonstrates the substantial margin improvements possible with great logistics.
In the construction industry, even major brands often have laughable logistics practices. The standard is so low that there’s a massive opportunity for companies willing to deliver more for their customers. By improving logistics, you can change the game for your clients.
Common Challenges in Construction Logistics
One of the biggest challenges in construction logistics is the lack of visibility. Everyone has their own spreadsheet, and often, they’re all wrong. This leads to:
- No visibility of what’s coming
- Difficulty coordinating what’s on-site
- Uncertainty about what you’re storing (and paying for)
- No clear view of where the site stands (outside of hitting refresh on your email)
- Penalties for missing or damaged items
This situation doesn’t just suck for you—it sucks for everyone involved. Matrak was founded out of frustration with these exact issues.
The most common skill in coordinating construction supply chains is hitting the refresh button on your inbox. Constantly asking, “Is your project running behind? When are you going to need those pallets? What’s happening?” wastes time and energy.
How Logistics Companies Can Take Control
Improving logistics is all about gaining control and visibility by using Matrak’s material tracking platform.
Here’s how it works:
- Responsive Defecting: Quickly address defects to reduce shipping costs.
- Safety Net: Ensure nothing is missed, providing peace of mind for everyone involved.
- Connected Warehousing: Prevent missing items and allowing greater supply chain transparency for clients and builders.
- Site Call-ups: Reduce wasted time on-site and prevent delivery turnbacks.
What’s In It For You?
By adopting these practices, you can reduce your team’s overhead and make picking and packing easier. Protect your storage costs with proof of what you have on hand, and start the conversation with your clients about the value of preventing common issues. This approach will save them storage costs, reduce re-orders through responsive defecting, and ensure no risk of missing items with connected warehousing.
Logistics becomes the safety net that allows your clients to try new suppliers and get better margins. It will massively reduce the risk of liquidated damages and speed up installation.
Call to Action
If you’re ready to see how premium logistics can transform your business, head to matrak.com to sign up for a free account and start improving your operations. By embracing these strategies, you’ll not only enhance your services but also build stronger, more trusting relationships with your clients, giving you the edge over your competition.
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