How a Digital Construction Supply Chain Can Boost Your Productivity and Profits

From finding the right products and services for your projects and negotiating the best prices to placing and tracking orders to preventing standing time, skillful supply chain management is the backbone of every successful construction company.

If you’re an estimator, project manager, or procurement manager working in the back office of a construction company, you know that there are a lot of software solutions out there that could probably make your job a little (or a lot) easier.

However, between creating bids, material sourcing, schedule management, and contract negotiations, finding the time to evaluate any new construction technology can be a significant challenge.

And you’re not alone.

For years, the construction industry, particularly specialty subcontractors, has lagged in adopting digital workflows. Many construction companies try to manage the supply chain process manually, using spreadsheets and a patchwork of outdated tools. Unfortunately, without a modern supply chain system in place, things will inevitably fall through the cracks.

In this article, we’ll examine why digitizing the construction supply chain is worth the time and effort and how it can improve profits and productivity.

Watch the webinar here: Procure-to-Pay: Digitizing your Supply Chain

What Does It Mean to Digitize Your Construction Supply Chain?

A digital construction supply chain brings the entire procurement and payment process into a cohesive and simplified experience. It also provides a single source of truth with real-time information to every person and department who needs to see it, and it does it all without requiring hours of duplicate manual data entry.

However, digitizing your construction supply chain affects more than just the materials in your warehouse or inventory in your yard.

A digitized construction supply chain handles everything from the first moment you realize you need a product until the day you finish the project and beyond. It allows you to source the right products at the right prices, makes it easier to find suppliers who offer the best lead times, and ensures that they have the stock you need when you need it. 

Improving the Construction Supply Chain for Designers and Estimators

The construction procurement process begins long before you start placing orders. Decisions your estimating and design team make during the bidding process will profoundly impact the build's future success.

When estimators and designers have access to accurate, up-to-date information, they can produce better, more accurate results–helping to eliminate problems like specifying a discontinued item. Additionally, when you can access historical procurement and supply chain data, you can dial in everything from shipping costs to scheduling considerations, as well as all the other details that affect a project’s cost and timeline.

By providing your estimating and design team with the tools to find the right product at the right price and factor in all the associated soft costs, every person in the project team will benefit– whether that means creating more accurate bids, better budget tracking or an easier closeout and costing process.

Improving the Construction Supply Chain for Field Supervisors and Site Managers

Communication between the back office and field teams has always been the cornerstone of successful construction projects, but when you’ve got hundreds of shipments to manage across dozens of job sites, sometimes, keeping the office and field in sync is easier said than done.

Digital construction supply chain management allows foremen, BIM managers, procurement managers, and project managers to log into the same connected systems your office team works in to view delivery schedules, order information, and delays. So you can eliminate standing time due to miscommunication.

When field supervisors and site managers know a product, service, or piece of equipment is delayed, they can reassign crews and workers as quickly as possible–eliminating downtime and equipment idle time.

This also means that field teams know exactly when to expect weather-sensitive or critical materials to arrive on site. Additionally, when change orders are necessary due to material-related issues, a digital supply chain allows your team to take appropriate action within their window of opportunity.

By digitally managing your supply chain, you can more effectively allocate field resources and increase on-site productivity, which means more money in the bank.

Improving the Construction Supply Chain for Finance Teams and Managers

Even when projects are going smoothly, there’s another step in the construction process that needs to be handled properly: financial management.

Whether ordering materials during the correct payment cycle to lower carrying costs or taking advantage of early payment discounts, the construction supply chain impacts your finances and cash flow.

Proper tracking of orders, delivery dates, returns, and more can all impact the profitability of a project and how quickly you’re paid for work that’s been done. It extends beyond the hands-on construction period, making job costing easier and more efficient while helping to identify issues to avoid on future projects.