Caring for your supply chain
Published 30 May 2014
The last few months have been a great time for the sector - most housebuilders have reported significant growth. However, the current market conditions place considerable pressure on the “engine room” of a residential developer’s business to keep "the machine" running smoothly.
When key resources are in short supply (materials, labour and indeed skilled and experienced staff) you need trusted suppliers as much as suppliers need your business. The "boom" has happened (particularly in some areas of the country) quite suddenly – it is not just growth, but the speed of change which brings challenges. Shortage of time is the constraining factor – not just in terms of the design phase and build programme, but also staff and management time. Now (more than ever) procurement processes need to be stream-lined.
This is where setting up framework agreements with key suppliers can help; whether they be with D&B contractors, trade contractors, materials suppliers or professional consultants, such as architects or engineers. Below are just a few examples of the benefits:
- Efficiency: Reduce administrative and management time and costs spent on contract preparation and negotiation;
- Risk management: Take decisions on risk profile and legal terms at the appropriate level and with due strategic consideration;
- Contractual protection: Increase the chances of the necessary contractual paperwork being put in place putting you in a better position in the event of a dispute over eg. payment, variations or defective work;
- Consistency: Adopt a uniform approach across offices/divisions and between trades/professions;
- Goodwill: Send out the right message to your suppliers that you value the relationship;
- Business planning: Act as a catalyst for you and suppliers to discuss workload expectation levels, delivery timescales and pipeline – enabling your suppliers to plan resourcing requirements, so that they are better positioned to service your needs.