3 Ways to Optimize Your Construction Supply Chain & Material Procurement Process
Improving the construction supply chain remains a hot issue across the industry, and it won’t be cooling down anytime soon.
As an MEP professional, you’ve likely uncovered several ways to make your materials procurement, pricing, and order requests faster and more accurate, and you know technology can play a critical role when improving the productivity and profitability of every project.
But technology alone isn’t enough to address supply chain disruptions, unstable commodity prices, and the general global economic conditions negatively impacting everything from price quoting to purchase orders.
Fortunately, there is a way forward. You can address the macroeconomic problems and the more specific challenges in your workflows by moving your supply chain to a fully digitized process.
A digital supply chain may feel daunting at first, but with the help of this article, you can discover how a digital supply chain helps avoid common productivity pitfalls so that you can better manage price quoting and purchase orders with your suppliers and within your project teams.
Step 1: Align Your Construction Procurement Process Under One Platform
Take a moment to consider all the various technologies you and your teammates use on a typical project. Maybe you use email to communicate. Spreadsheets to track pricing information and purchase orders. And software to manage material tracking or project status.
But the question remains: do your tools communicate with one another? Do you find yourself manually re-entering information into spreadsheets or making multiple phone calls to suppliers for accurate pricing information?
As the construction industry evolves, it’s moving toward a connected technology ecosystem. This is a system where the conceptual design, for example, can inform your estimates, detailed designs, fabrication activities, bid management, project management, and procurement. The same is true with your supply chain and material procurement activities.
Instead of multiple software vendors to address single problems, look for software that integrates with other technologies, stakeholders, and teams across the preconstruction and construction phases.
Step 2: Create a Free-Flow of Material Procurement Data
Fragmented technology and disparate data go hand-in-hand. If your preconstruction or construction applications are not communicating with other technologies or other teams and project stakeholders, the data created becomes disconnected and locked away, unable to inform other parts of your workflow. Additionally, as you switch from one software application to another, translating the data will require significant time and resources, not to mention the increased possibility of errors.
Improving supply chain productivity relies heavily on a free flow of standardized information. Creating quotes and orders using a bill of materials (BOM) generated from a fully managed material database with material codes, descriptions, and prices can streamline your workflows. It also enables accurate and speedy material sourcing, reduces confusion and errors in procurement, and can even boost your accounts payable tracking capabilities.
But many contractors are tracking their purchase orders without material codes. Industry standardization takes significant time and coordination as contractors and vendors align on materials sourcing.
This is why you should base your digitized supply chain on standardized information and automation. When manufacturers contribute specified material information for contractors and distributors, they should be able to inform different preconstruction and construction activities.
A Common Data Environment (CDE), for example, is a critical element of this automated flow of information. Through a CDE, you can set the foundation for all your supply chain operations, synchronizing all stakeholders by prioritizing detailed product information that comes directly from your preferred suppliers.
Step 3: Create Automated Methods of Information Exchange
A digitized supply chain will also help you avoid the pitfall of analog and unsynchronized methods of exchanging information between contractors, distributors, manufacturers, and vendors during your price quoting and ordering processes.
These methods may have worked in the past, but they don’t enable automatic, updated, and scalable communication. Instead of analog, consider moving to an electronic information exchange that requires little-to-no human intervention.
When you have a CDE populated with data from your multiple preconstruction and construction technologies, you can freely share information based on standardized definitions. It all happens in the background – your estimating team, for example, can pull pricing 24/7 from connected suppliers, ensuring you get the most up-to-date pricing in your estimates. Project team members can submit a BOM, which becomes instantly available to other team members responsible for purchasing, and connected distributors can confirm pricing or submit pricing for the first time.
With an automatic, digitized information exchange, the risk of miscommunication or inaccurate pricing drops significantly.
How Supplier Xchange Can Help Avoid These Pitfalls
Supplier Xchange, Trimble’s electronic quoting and procurement service, is designed to help you move your supply chain operations to a digital, high-efficiency format. Here are a few reasons why it can also help you avoid the pitfalls mentioned in this article:
- Supplier Xchange has over 10,000 digital and supplier connections across North America.
- Supplier Xchange delivers an average of $17 billion in quotes per month from 130,000 average price quotes.
- Supplier Xchange was built over ten years to support automation and electronic information exchanges between contractors and preferred distributors.
Because Supplier Xchange is a one-to-many exchange, contractors and their suppliers can benefit from an efficiency of scale. If you have a supplier that isn’t on the exchange, simply request a connection, and Trimble will set them up to provide accurate pricing for your most competitive bids.
Book a Demo
Click the link below to schedule a meeting with our team to learn more about Supplier Xchange and how it can completely revolutionize your procurement process!