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Construction

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Construction Materials
Materials Sourcing
Project Management
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Detailed - Careful - Professional Selection of Building Materials, Manufacturers and Suppliers
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Responsible Sourcing
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Procurement In Construction

The procurement process is how we go about acquiring the goods and services we need. When we’re shopping for a suit or a pair of jeans, procurement is pretty straightforward. But when we’re looking to acquire all of the goods and services needed to get a major construction project up and running, the plot thickens.

Construction management procurement is defined as being the art and manner of securing necessary goods and services with an eye to:

1. Timeliness

2. Acceptable quality (which varies considerably from one client to the next)

3. Respect of financial parameters (reasonable pricing)

4. Minimizing and mitigating risk

5. Effective communication and administration

6. And last but certainly not least, ensuring clients’ satisfaction by understanding their dreams.

All of this can be subsumed under the word value–getting Clients what they need at an acceptable price, reliable schedule and without unnecessary risk. The process effectively begins with the procurement of the initial project team

Material Procurement

Procuring materials is a crucial aspect of the construction process as contractors will normally be inundated with requests from suppliers for the provision of goods and services. They must therefore order materials that align with both the client’s and contractor’s objectives. Developing the most suitable purchasing strategy will involve selecting material suppliers according to a range of criteria that are likely to include speed of delivery, cost, quality, specific project constraints, risk, asset ownership and financing. Within a specification, buyers may have flexibility in purchasing, particularly where an architect or engineer has specified a product and added the clause ‘…or equal approved’, upon which the buyers may – for good reason – substitute a different product that must, as a minimum, meet the same standards as the original. Where a specification stipulates only one type or brand of material/product available from one supplier, the procurement team may be bound to procure that product even though it may consider that there are better equivalent offers on the market.

BREEAM Responsible Sourcing

Aim and Benefits:                                                                                                                                                          To recognise and encourage the specification and procurement of responsibly sourced materials for key building elements.

Value to Client                                                                                                                                                                This is a great marketing tool for the client, a very apparent and easy method to demonstrate green credentials.

It can also help the client’s brand management, to avoid scandals, as credible and comparable schemes to evaluate the responsibly sourced products are used. Responsible sourcing of materials takes into consideration risks to the environment, socio-ecomic impact of any product or material specified. The client can be assured that the building being created does not have a negative impact elsewhere or is harming the planet, which is a long term benefit. ‘Green’ material information is widely available now, and the client can reuse a developed portfolio of these responsibly-sourced materials as a palette for future projects

When to Consider                                                                                                                                                          The requirement to responsibly source materials where practicable can be written into the tender documents and the design team should be encouraged to specify manufacturers that operate environmental management systems.

Once the design has been fixed, a breakdown of the materials within each element can be prepared along with details of any specified manufacturers/suppliers and their EMS/COC certification. By inputting the information within the calculator tool at an early stage based on the known specified products, it is possible to see which materials will therefore need to be responsibly sourced to gain the targeted credits or advise if alternative products should be specified with higher levels of responsible sourcing. The contractor will then be able to include any responsible sourcing requirements within their subcontract and purchase orders.

Sourcing and Its' Impact in Construction Project Management

Sourcing is a vital business in the purchasing process that can produce advantage for consumers, stimulate transformation and discover new products and market opportunities for recent firms. From strategic point of view, it can be said that sourcing is an organized exercise that instructs procurement and supply managers to plan, control and enlarge the supply base according to the strategic objectives of the firm (Oy & Furlotti, 2014 cited in Roger, 2005). Sourcing is the “location, acquisition and management of all the vital inputs required for an organization to operate. This includes raw materials, component parts, products, labor in all its forms, location and services” (Hinkelman, 2008). Sourcing is an analytical process used at both tactical and strategic levels. It is apprehensive with what is required to be procured, why, when and where. The notion is made to help supply chain managers to enhance, develop and instrument sourcing strategies (Concept of Sourcing, 2017).

Sourcing Role

Sourcing is a day-to-day activity in the lives of everyone. When decision is made to procure a material we begin by a specification, a target price and the supplier. The kind of product and budget determines the process time and effort. The chief basis is that we deploy a strategy by searching the market to find the best supplier which fits our personal criteria. We can separate sourcing into two main procurement functions: Firstly, determine and nominate new suppliers. This involves searching for suppliers that supplies materials or goods that meet the requirements, examining them, and establishing contracts. Secondly, is to handle the vendor over a period of time. This may be short, which includes single or long term procurement as a strategic business (supplier) partner.

The Five Sourcing Principles

Sourcing has the five principles which are, firstly, Alignment: ensure that sourcing strategies and activities are well aligned with the needs of the organization and internal stakeholders. That means understanding the business drivers in each case, whether cost, quality or other goals, and making sure sourcing reflects those. Also align with markets and suppliers, and work to resolve situations where the internal and external aspects are in conflict. Secondly, Openness: Being open to new ideas, products, services and suppliers sits at the heart of organizational success. It is impossible to generate competitive advantage by buying the same things and using the same suppliers as all competitors, and curiosity is a vital quality for procurement professionals. This means we must collaborate with our internal stakeholders, suppliers and potential suppliers, and look to innovate with them in terms of specification, supply techniques, technology and process. Thirdly, Rigour: Once we move beyond our basic requirements, sourcing is not a trivial, routine or simple process; it requires a professional and structured approach in order to generate good outcomes. We must approach it with careful planning, and make sure adequate skilled resource is engaged in the process. We will use appropriate tools and techniques to give us the best possible results in terms of selecting suppliers and agreeing robust contracts that deliver value and advantage to the organization. Fourthly, Coherence: We look at sourcing as an end to end process that starts with early market engagement and runs through into the contract and supplier management phase. Different stages will be linked and all assist the total aims of the firm and the specific sourcing exercise. The objectives will be visible to internal and external contributors in the procedure, and each element of the sourcing procedure will clearly fit into the bigger picture. Finally, Commerciality: Our suppliers play a vital and central role to our organization, whether it is a private sector firm, a public or third-sector organization. The purpose of sourcing is to achieve strong commercial outcomes, relationships and contracts with suppliers who can contribute to how the organization achieves its goals, whether those are profit, meeting social needs, or governmental policy related. Competitive advantage is central to this in the private sector; but for all organizations, thinking commercially is essential and sits alongside the other principles to guide our sourcing.

Responsible Sourcing

You may have noticed of the last few years the term “responsible sourcing” cropping up in conversations at the office when it comes to procuring materials for the next project. Perhaps you’ve wondered, “What has it got to do with construction?”. You might think that it’s all very well making sure your coffee comes from a well-managed plantation, where everyone is treated well and paid a reasonable wage. If that Fairtrade coffee is in an FSC certified paper cup, so much the better. And of course you don’t want to be feeding the family with horse meat that you thought was beef – but construction…?

Well yes… major contractors are increasingly aware that the source of building products, how they were manufactured and by who is becoming a key issue. It is now fairly common for contractors on large developments to require that, where possible, material and product suppliers demonstrate some form of responsible sourcing certification.

Indeed, the BREEAM assessment scheme, which is widely recognised as a badge of building sustainability, offers credits in its Materials category where responsible sourcing of construction products can be demonstrated for a number of years.

So why this concern with responsible sourcing in construction? Apart from feeling good about the way you operate, there are a number of important business risks and benefits involved – such as those outlines here.

Your Reputation

You may have noticed of the last few years the term “responsible sourcing” cropping up in conversations at the office when it comes to procuring materials for the next project. Perhaps you’ve wondered, “What has it got to do with construction?”. You might think that it’s all very well making sure your coffee comes from a well-managed plantation, where everyone is treated well and paid a reasonable wage. If that Fairtrade coffee is in an FSC certified paper cup, so much the better. And of course you don’t want to be feeding the family with horse meat that you thought was beef – but construction…?

Well yes… major contractors are increasingly aware that the source of building products, how they were manufactured and by who is becoming a key issue. It is now fairly common for contractors on large developments to require that, where possible, material and product suppliers demonstrate some form of responsible sourcing certification.

Indeed, the BREEAM assessment scheme, which is widely recognised as a badge of building sustainability, offers credits in its Materials category where responsible sourcing of construction products can be demonstrated for a number of years.

So why this concern with responsible sourcing in construction? Apart from feeling good about the way you operate, there are a number of important business risks and benefits involved – such as those outlines here.

  • The unacceptable ethics of some sources:                                                                                                There are some sources of materials and products that raise very serious ethical issues. A well known example is that of diamonds that find their way onto the market having been mined in highly undesirable circumstances during civil wars in some troubled African regions. Similarly coltan, a metallic ore used in the manufacture of electronic equipment such as mobile phones, is mined in parts of central Africa that are controlled by armed factions and organised crime. The profits from the sale of these materials to the less ethically minded manufacturers often go back to the countries of origin and maintain the existing states of conflict.
  • Demonstrating your ethical approach:                                                                                     Manufacturers are often keen to demonstrate that they embrace a wide range of ethical, sustainability and financial targets in their corporate governance strategy. Responsible sourcing, with its economic, sustainability and social focus, is an ideal vehicle for companies to demonstrate their aspirations and achievements in a wide range of different but related activities.