Blog

 

02

Aug

Reducing Risk and Complexity in Construction Supply Chains with SCRM

Author: Rene Garcia

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The construction industry has one of the most difficult supply chains to manage because the building changes from project to project typically. The uniqueness of each building means bringing together suppliers, contractors, and vendors that may have never worked together before and may never work together again. Complicating matters is the common issue of having to use varying procurement systems to build the supply chain. All of these variables add up to increase risk and complexity. 

Long Complex Supply Chains Reduce Visibility and Quality in Construction 
Visibility is an ongoing issue and can raise the risk profile of any supply chain, but it’s even worse in the construction industry. On a typical building project, the first tier of suppliers is usually composed of design consultants who have sub-contractors and suppliers who specialize in specific services and/or materials. The bigger and/or more complex a project is, the longer the supply chain. As a result, some suppliers at the tail end of the chain are completely unknown to organizations at the top of the chain.

This lack of visibility necessarily results in uneven performance and responsibility requirements throughout the supply chain. As an example, first and second tier suppliers may be held to strict service level agreements with the client, but the third tier suppliers may not have the same aggressive SLAs with the tiers above them. This decreasing expectation only gets worse the farther down the supplier is. 

Using SCRM to Manage Construction Supply Chains and Reduce Risk 
Proper supply chain management involves having adequate traceability on products and services, organizations, logistics, people, activities, information, and resources that transform raw materials into a finished product that meets the requirements of a client or end user. When organizations have inadequate visibility on their supply chain, the risk profile increases. Hiring a supply chain manager helps, but that role is only as good as his or her managing tools. 

Avetta is the most powerful tool any company in the construction industry can have. It starts with building safer construction sites. Companies must ensure that not only are their own employees following proper safety procedures and processes but also that their contractors and suppliers meet certain safety compliance requirements. Avetta’s contractor management software helps ensure organizations only work with vetted suppliers who have necessary insurance, proper training, and qualifications to perform the job.

What’s better is that Avetta’s Worker Management solution makes it easy to verify individual worker qualifications and provide online training for faster induction which ensures only the right people are allowed to perform critical job functions. In fact, the supplier prequalification software helps formalize the process of safeguarding that only those contractors and suppliers who are vetted and compliant make it on the worksite. The result is better quality and less rework. 

Reduce Complexity in Construction Supply Chains with Avetta 
Supply chains in the construction industry have a lot of moving parts, and it’s difficult to keep an eye on all of it. Fortunately, the solutions and experts at Avetta can do the heavy lifting to help ensure that you only work with leading contractors who operate on principles and produce consistent quality. 

To learn more about how Avetta helps supply chains in the construction industry, visit: https://www.avetta.com/industries/construction-materials, call 844-633-3801, or email blog@avetta.com.