Material procurement in the construction industry is crucial to the success of a project as it can cause significant delays to a construction schedule and significant costs if not executed correctly. Therefore procurement managers and companies, focus on procuring materials in a timely manner and at the best price, relative to the quality. However, due to supplier related issues, delay in deliveries and logistical inefficiencies, it’s hard to achieve these objectives. Below we highlight in detail the most common problems and how technology can help overcome these problems.
ACQUISITION OF MATERIALS
One of the biggest challenges in acquiring materials is selecting the right supplier for your project. As a procurement manager, you’re reliant on your chosen supplier providing materials as agreed and in accordance with a contract. So when you have no working relationship and/or limited to no visibility on the progress of your materials, problems often occur. When there is a miscommunication, delay or issue during manufacture, often you have no visibility of this, and therefore you have limited time to mitigate the impact; resulting in delays and additional project costs.
In addition to the above, supply chains are becoming increasingly global, as materials are being sourced more and more from overseas and in particular from China. From this, comes a lot of problems with language barriers.
A local supplier requested some materials to be sent to site, however there was a miscommunication between the installer and the manufacturer. The manufacturer sent the wrong materials to site, which resulted in the supplier having to pay warehousing costs and additional costs for re-ordering the correct materials as well as expedited fees to get the correct materials on site asap.
A local builder, who found out that their materials were sitting in the corner of the manufacturers factory overseas instead of being shipped. The manufacturer was waiting for all the materials to be complete before shipping, however the builder had sequenced the manufacturing in accordance with the installation on site. The builder had to fly a staff member overseas to the factory to find out where his materials were. It cost the builder tens of thousands, between the flight cost and time travelling, express shipping and over-time to have the site workers make up the lost time.