Over the past few decades the construction industry has become more reliant on advanced technology. Unfortunately, the same can’t be said for its procurement function – daily purchasing struggles are still a reality. One of the reasons for this may be the high cost of implementing new procurement technology, and its steep learning curve, two factors which make it an unrealistic option for most companies.
Construction sites span a wide variety of unique locations, and the end products are frequently of a customised nature. Logistics, weather, topography, and more can directly interfere with operations. As a result, the effects of an inadequate procurement process are compounded. Challenges such as lost orders, lost data, poor quality suppliers, and a lack of traceability can lead to an unnecessarily expensive project, a delayed project, or worse, endless disputes with suppliers and customers.
This report will outline procurement challenges in the construction industry and provide solutions for organisations of all sizes.
Construction sites are at the mercy of a development’s location. This isn’t the least of the industry’s challenges – a lack of access, or imbalance of information can cause transactions to fail. Each project requires communication between a large number of stakeholders. Employees must be able to effectively convey their purchasing needs to other co-workers/suppliers, or they’re liable to be confronted with schedule delays, poor quality or inaccurate items, and ultimately, substantial increases in costs.
There are several different procurement methods used in the construction industry. These include Traditional, Design & Build, and Construction Management. Each method has its strengths and weaknesses, but they all share a common objective: obtain goods & services on the best terms, quickly and without hassle, while minimising risk. The Traditional method involves a separation of the design work from the construction, whereas with Design & Build the contractor accepts responsibility for a portion of the design work. Finally, Construction Management allows a manager to oversee the work through trade contractors, and the overall design is the responsibility of the client’s consultants.
The disconnect between an individual placing an order and its recipient(s) can have many negative consequences. Plans, itineraries, and inventory control systems are useless if orders are sent to an incorrect address, perhaps due to a typo when no auto-fill option is available. Complex construction projects require buyers to interact with a high number of suppliers, but without effective tools to streamline orders, critical information can easily be misplaced. Even worse, attempts to improve this process are often unsuccessful if a procurement department lacks a system to keep track of these issues.
Obtaining high-quality construction materials is dependent on the ability of a supplier to understand and fulfil an order according to precise buyer specifications. A lack of intuitive documentation tools, such as a master list of items, can lead to lost data, for both buyers and suppliers. Purchasing building materials is not the same as purchasing pens – unavailable data can trigger an avalanche of setbacks on a construction site. These problems are further aggravated when a company
battles with poor quality suppliers due to the absence of KPIs, methods of evaluation, and a lack of access to information.
To maintain a consistent standard of quality, all components of the procurement process must be traceable. Every item purchased, from cables to pipes to heavy machinery has to be monitored and appropriately documented – a decline in quality can cause production delays that ultimately increase costs and encourage off-budget maverick spending. Mistakes go unnoticed until it’s too late.
The construction industry can address all of its challenges while reducing purchasing costs and enhancing daily operations through the implementation of powerful software. As a cloud-based platform, Tradogram lightens the procurement burdens of the construction industry. Lost orders, lost data, poor quality suppliers, and a general lack of traceability will be struggles of the past.
Tradogram’s real-time monitoring feature ensures that the dashboard always reflects the most current activity updates in real-time. Shipment details can be verified before an order is sent, and once in transit, an order’s status is always available (from any device/location with internet access). As an additional precaution against miscommunication, a built-in instant messaging feature allows buyers and other employees to collaborate securely, at any time, to reach the best outcome.
Data can be organized and tracked effortlessly, all with a high level of security (Tradogram is EV SSL certified and SSAE-16 Compliant). Create and manage your personal supplier database – you can even export your supplier data to be used in other systems. Every supplier’s profile can be maintained with supplier details, a quality score, and all transaction information. Each item is also provided with fields for a comparable level of detail. Lost data isn’t an obstacle when using a system that provides tools to lock down your information.
Tradogram’s supplier rating feature allows buyers to quickly and effectively rate vendors after each transaction. This means that low-quality suppliers are never used again, ensuring that critical materials arrive on-time and in good condition. Additionally, procurement teams can collaborate with suppliers in discussion rooms by inviting them to bid on requests, and share information with multiple vendors in a fast and effective manner.
Traceability is maintained through user permission controls, approval routing, and multi-level management (at company, branch, and department levels). Collectively, these features ensure that purchasing costs are low and maverick spending is minimised. When all buyers can fine-tune and trace their transactions from start to finish, high quality goods can be delivered in a timely manner.
Tradogram Understands Construction
Construction companies using Tradogram are able to fully control their procurement, and as a result, lower costs. They have increased the visibility of their procurement process while eliminating the need for Excel sheets and disorganized paper files. Spend is controlled with minimal effort. Lost orders, lost data, poor quality suppliers, and a lack of traceability will no longer be issues to overcome.
Tradogram’s software is affordable, painless to implement, and accessible from any location and device with internet capabilities – a perfect fit for the demands of the construction industry.