Construction procurement seems too complicated for contractors and subcontractors if this process is far from well-thought. That is why all the phases including pre-construction, construction, and post-construction stages should be planned from A to Z. Do not forget about legal backgrounds, requirements, and eco-friendliness concerns that matter for the construction procurement procedures.
It is worth noting that the first step to cope with the most common challenges is to switch from paper-driven processes to fully automated ones. For this purpose, construction procurement can be improved with digital solutions like bid estimating software. This is one of the most efficient ways for win-win automation and digitization for this or that industry including the construction sector.
What Is Construction Procurement?
It is worth noting that construction procurement is also called construction management procurement. This procedure attempts to cost control. Additionally, it is necessary to provide helpful solutions for communication challenges and profitability shifts. Each project requires a precise plan with algorithms for the acquisitions of needful services and goods.
Each building company can use various approaches to progress with construction procurement. Everything depends on critical factors like the size of the business, the type of the project, and profitability rates.
That is why estimators together with general contractors and managers should start their procurement with an analysis of time, scope of work, and budget requirements with the real picture. All these insights should be presented in the reports while some of them can be generated with the help of special-purpose construction procurement software.
Finally, let’s take a closer look at the most common construction procurement challenges to understand effective ways to do away with them and improve your management performance. We will consider all the problems and issues widespread in the present-day construction industry.
Top 3 Challenges to Take into Account in the Context of Construction Procurement
There are three main problems concerning the construction procurement process. Among these challenges are poor communication, predicaments in the context of costs and planned purchases, and lacking flexibility. These issues can bring the most reasonable improvements to your workflows, paperwork, analytical part of budget planning, and the final result in general with higher profit margins.
Challenge 1: Poor Communication
Almost all businesses and industry niches face miscommunication or communication of the poorest quality ever. This is about the negative impact not only on the procurement progress and level but on other project stages as well. That is why be sure that all the aspects should be discussed and stay clear for each stakeholder.
- While improving your corporate communication, you will avoid the following challenges:
- Lacking decentralization of the project;
- Shipping delays;
- Misunderstanding with the clients, partners, and other parties;
- Poor customer service and lacking feedback;
- Ordering wrong products and services, etc.
This list is not limited only to the above-mentioned items. Each contractor with rather sound experience in the construction sector will add their own challenges that can be prevented through high-grade communication background. Note that regular meetings, good software for communication between departments (choose messengers with options of adding links, sharing contacts, etc.), and team-building activities matter for your procurement too.
Challenge 2: Predicaments with Purchasing Arrangements
When questions with confusion, missed deadlines, and other unpleasant surprises related to miscommunication are closed, it is better to pay attention to one more dangerous challenge for your procurement – purchasing predicaments. Do not make your business messy! You should think of the supply chain at the very beginning.
Explore profitable providers of materials and services to avoid overspending and waste of time because of one-time purchases and constant searches for more and more suppliers from one project to another.
Remember that your perfect budget planning starts with strategic spending. That is why you will save time with the standing base of reliable providers of building materials and subcontractors to order services from time to time. This is everything about your well-thought procurement. Plus, if you store all the data about supply chains in a cloud-based way, your approach is considered to be really professional and risk-free in case of lost, stolen, or damaged paper documentation.
Challenge 3: Zero Flexibility of Your Business
Zero flexibility of any business is about increased complexity and lacking tolerance for various circumstances. That is why your procurement should be based on ever-changing factors and requirements. Everything might change like evolving customers’ expectations and limited terms of the project.
Plan all the scenarios you are able to predict for this or another project stage. This way you will meet the timetable and your expectation concerning profit margins. A good tip for general contractors is to remember all the efficient approaches (new contacts, profitable partnerships, budget-friendly suppliers, etc.) that can save your budget and improve your procurement. For this purpose, you can try the analysis of your historical data and use case study-based strategical maps.
