Procurement in Construction industry depends largely on accurate planning and upgrading the plans at the right time to suit the ongoing and dynamic demands of construction projects. Right planning, management, control, and allocation of funds and resources to procure construction goods and services are key to successful project deliveries. However, procurement in the construction industry does not come without its own set of challenges and unique complexities that lead to project failures.
Most of the construction projects fail or run into delayed completion of projects due to difficulties in coordination efforts required for material procurement. By large, contractors deal with this issue by importing all required materials onsite with an overall project view.
Typically, the project manager is responsible for the construction procurement process and needs to ensure tight control and management around the following key areas:
- Define project requirements.
- Solicit bids for and select services.
- Buy or lease supplies and equipment.
- Contracts review and management, budget tracking, and project schedules.
- Issue resolutions and risk management.
The key to successful construction procurement and project delivery rests on using the right strategy, methods, suppliers, and technology to ensure materials and services are qualitative and available as per the project needs and estimates.
Procurement in the construction industry and its execution have to be effectively tracked, monitored, and reviewed to ensure optimal efficiency and cost savings. Ensuring proper utilization of resources and maximizing return on investment is the key and most construction companies fail to implement proper cost reduction measures to bring down the cost to a justifiable level.
Some of the key areas that procurement in the construction companies industry can be optimized for companies to stay productive, and efficient and maximize profits to achieve desirable project delivery commitments include:
Spend Visibility Most construction companies have limited or opaque spending overviews across the business or group. Facilitating transparency and spending optimization requires consolidating information across multiple business stakeholder entities, technology systems such as ERPs, and data sources is critical to success. Therefore, it is important to have a spend management solution built into the procurement management strategy and system to ensure procurement and business stakeholders have the right data at the right time to make informed and correct decisions. ELIT Procure-to-pay (P2P) Cloud offers a spend analytics dashboard to ensure optimal cost efficiencies and savings.
Huge volumes of data to Process When looking to improve procurement and supply chain management for the construction industry, businesses need to make sense of the data and information available internally and externally to determine the success of projects. Timely inputs, decisions, and actionable outcomes are needed to control to stay relevant and on top of the competitive landscape. A robust, scalable, and effective purchasing software helps with these outcomes. ELIT helps by:
Seamlessly integrate with existing ERPs and third-party systems
Ensure data creep is effectively managed and the right decisions on procurement processes can be taken by the right people at the right time with minimal effort
Effective Supplier Management and Risk Mitigation Lack of actionable and access to timely responsive suppliers are at the core of construction procurement failures. This can be mitigated by creating a robust supplier network and charting out effective channels to communicate in real-time to drive optimal responsiveness and a critical supply-sourcing pipeline.
ELIT eSupplier module helps with:
- Pre-qualification and rapid on-board suppliers.
- Migrate existing supplier database.
- Proactively manage supplier relationships.
- Ensure regulatory compliance.
- continuously track and rate supplier performance metrics to improve and optimize construction procurement costs and timeframes.
ELIT, through its comprehensive solution suite, provides the channel mix for an effective procurement lifecycle with:
- Real-time internal and external collaborations
- Performance metrics and Analytic dashboards
- Contract and regulatory compliance tracking
ELIT, a robust, scalable, and seamless purchasing software; helps address some of the unique challenges in construction procurement in the following key areas:
- Operational Transformation.
- Strategic Sourcing & Supplier Management.
- Category Management.
- Supplier & Procurement Analytics.
- Supply Chain Transparency.
- Supplier Collaborations.
- Logistics Management.
- Real-time communications.
- Spend Analytics & Cost Reduction
- Category Utilization
- Supplier Performances
- KPI and Metrics Optimization
ELIT identifies three key areas where successful construction procurement functions strike the right balance between short-term cost reduction and long-term optimization to drive efficiency and profitability.
|Supplier Collaborations & Engagements
|Gain better insights into supplier capabilities, cost structures, and fitment to ensure transparency and anticipate demand fulfillment
|Involvement in early-stage supply planning to reduce procurement costs and drive efficient spending programs.
|Make smart and justifiable purchasing decisions based on supplier performance criteria and categorization optimization without having to spend much time on the process.
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