Much more could be done to improve the efficiency of the construction sector’s supply chain. And that really means going beyond on-site logistics, and back to looking at the way the work is contracted out and materials bought in.
TDG’s group strategy and marketing director, David Hindson, sees great potential to make huge savings for the construction sector. He believes the construction sector tends to look at the supply chain purely from the sourcing and procurement angle – whether its labour only or labour and materials. And that’s about it.
The result is lower productivity, delay and waste. He believes the average site wastes between 10 – 30 per cent of materials through poor planning and execution, with reverse logistics playing little or no part. The strange thing is, the sector just seems to accept it. Why is this?
‘The prizes are huge’, says Hindson. ‘You can reduce labour content by better scheduling and placement of goods close to where they are needed, resulting in faster build time, which in turn translates into lower finance costs.’
Much depends on the way the work is subcontracted out. The secret would seem to be to use labour only. If you contract in supply and fit you are paying a margin to the subcontractor to purchase and procure materials. Keeping buying central gives greater buying power and control.
Taking control in this way offers the opportunity to consolidate, co-ordinate and kit-out materials to specific trades in accordance with build schedules. Hindson believes that supply chain can impact as much as 75 per cent of build costs.
With the construction sector looking at leaner market conditions, perhaps the time has arrived for smarter logistics.
Supply Chain Standard and TDG are running a Roundtable debate on ‘Construction sector logistics’ which is due to take place at the Swiss Re building (The Gherkin) this summer. If you are involved in the construction sector and would like to be considered as a participant, please email: Johanna.firstname.lastname@example.org