Building relationships
Buyers in the construction industry are not exactly revered for their expertise in supplier relationship.
The sector, still stuck like glue to its recessionary depths, has been the setting for some ugly tactics over the past two years. The most potent being the universal slashing of supplier prices by some of the UK’s biggest housebuilders.
“The procurement team have a task now to pull savings out of the build costs,” came the instruction from Barratt Homes CEO Mark Clare at the height of the economic crisis.
Blazing a trail through this jagged landscape is a former CIPS Supply Management purchaser of the year. Steven Morgan, capital projects director for airport operator BAA, is championing a different kind of supplier relationship.
His premise is simple: reward strong performers with bonuses and projects will be delivered faster and to a higher standard.
“It creates an atmosphere of trying to please the client rather than avoid the client’s wrath,” he says. This is not a concept Morgan has drawn from thin air either – he says there has been some success using similar schemes on big budget projects in the US.
While I am sure this is not the only example of good practice, it is a break away from adversarial relationships often associated with construction. If you’re also bucking the trend in industry, why not let us know – we would love to hear about it.
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Construction is starting, certainly in the high value commercial and public sector market, to understand prices. It is only once there is a recognition and understanding within construction that the supply chain has costs and overheads, and that these have an impact on price, that we will move away from the adversarial “25% off your price and the jobs yours”. We need to move more to a “how can we save 25%?”. It might be a subtle difference in question but a massive change for the industry.
This is where championing the role of CIPS membership and training is critical for all of us involved within the construction and support services sector.
Time for us to stand up and be counted – lets get the CIPS message across all walks of the construction industry, including housebuilding.