On every successful construction project, there is a team of contractors, subcontractors, and material suppliers that work together in a hierarchy. These relationships form a “supply chain” that exists on all construction projects, even when it’s not formally acknowledged. Supply chain management focuses on improving this already existing system.
Below, a Wichita construction lawyer at Cotney Construction Law will be discussing the implementation and benefits of proper supply chain management. Employing these techniques could increase profitability and productivity on your next construction project.
What is Supply Chain Management?
Supply chain management is an approach that accounts for every level of the construction hierarchy. The supply chain itself consists of the flow of both materials and related information. How you order deliveries is just as important as whom you order deliveries from. As our Wichita contractor attorneys know all too well, any miscommunication between project entities could lead to a costly legal dispute.
While links in the chain often operate independently of each other, they are all part of a larger team that is connected by a singular goal: project completion. Similar to lean construction, supply chain management is about reducing waste and addressing problems by increasing transparency and coordination among the involved entities, regardless of difficulties. The goals of supply chain management are as follows:
- Reduce costs, waste, and inventory
- Reduce supply chain impact on the jobsite
- Transfer jobsite activities upstream
Everyone involved in a project should have the same goals, views, and approach to solving issues. This is easier said than done as many project entities put their own needs first, even if it means putting the success of the project at risk. But when members of the supply chain work together, everyone benefits.
The Benefits of Supply Chain Management
- Increased profits
- Fortified Long-term partnerships
- Improved relationships with material suppliers
- Fewer material defects
- Improved business reputation
In addition to the above benefits, supply chain management improves owner satisfaction with the completed project. This is crucial for avoiding costly legal disputes that could have been avoided with effective communication. Failure to properly track products and materials could result in you requiring the aid of a Wichita contractor lawyer.
How to Promote Supply Chain Management
To promote supply chain management, contractors must consider all aspects of material procurement. This includes how materials will be delivered, how they will impact the project site, and how they align with the goals and expectations of everyone involved. From creation to implementation, these materials impact everyone involved in a project, and you must be able to account for these interactions.
In order to improve supply chain management on a project, you will have to start small by applying these tenets to your current project while keeping in mind that it will take time for progress to show. In order to build trust among members of the supply chain, you must be patient. While you may work with a different material supplier on every project, you should strive to build ongoing relationships with all members of the supply chain. It’s far easier to work and communicate with a material supplier that has helped you reach project completion in the past.
Why Do We Need Supply Chain Management?
The last goal of supply chain management (transfer jobsite activities upstream) may seem unusual at first. Contractors already have their hands full on their own project tasks. However, when responsibilities are delegated down the supply chain to subcontractors and sub-subcontractors, it only increases liability. Can you be certain of the legitimacy of everyone beneath you on the supply chain? Are material suppliers downstream under the same contractual obligations as everyone upstream? They may not be. Consult with a Wichita construction attorney to ensure that your contracts are ironclad.
Supply chain management can be an incredible tool for reducing waste, saving money, building mutually beneficial relationships, and fostering accountability. It’s not enough to assume that everyone on a construction project is doing their job correctly. Even when everyone involved approaches a job in earnest, sometimes things go wrong. In addition, construction projects are becoming more complex and organizing projects are becoming more and more difficult with the industry’s focus on specialty suppliers and contractors. In addition to applying the above strategies, you should utilize a law firm’s subscription plan in case a legal dispute becomes unavoidable among members of the supply chain. For a partner that will always protect your rights and aid you in reaching project completion, turn to the experienced Wichita contractor attorneys at Cotney Construction Law.
Disclaimer: The information contained in this article is for general educational information only. This information does not constitute legal advice, is not intended to constitute legal advice, nor should it be relied upon as legal advice for your specific factual pattern or situation.