Why relationships are at the heart of a good supply chain

All organisations rely on others for services, equipment or raw materials essential to running their businesses to some degree. In the construction sector, perhaps more so than any other, an effective supply chain is vital to the smooth running of almost every project. 

Disruption in supply chains can be devastating. Even the most minor blip in a supply chain can result in a loss of productivity, increased costs, relationship issues and loss of revenue and, amongst other things, reputational damage. It really is a minefield, but there are three fundamental pillars that we use at Vision Arch to ensure we avoid any pitfalls in our supply chains. These pillars are all linked to relationships. Our supply chain is built on open relationships, accurate and timely communication and, most important of all, honesty. 

What is the supply chain? 

Simply put, supply chain management in the construction industry is the relationship between the suppliers and the contractors involved in any development project. An effective and well-managed supply chain will give firms a complete understanding of the resources, logistics and people involved to ensure the project and programme are delivered on time and within budget.

The supply chain’s size, scale, and complexity will vary from business to business, from project to project and even from part to part. Depending on the scarcity of components and raw materials, there is always a looming risk of costs spinning out of control on complex projects if the supply chain isn’t well managed and optimised. 

The construction industry isn’t unique in facing supply chain issues. The well-documented blockage of the Suez Canal showcased first-hand how fragile supply chains can be when we operate in a ‘just in time’ world. The impact was catastrophic as an estimated 12% of global trade passes through the canal every day. The blockage brought the issue to the front of people’s minds and should act as a stimulus for all of us operating in the construction sector and a reminder that we live in uncertain times.  

Why are supply chains essential in an age of uncertainty? 

One of the main issues facing supply chain managers is that low-cost, efficient supply chains are very attractive when things are running smoothly. However, they make it very hard to predict major disruptions or react quickly when issues arise. The COVID pandemic and Brexit illustrate the potential to significantly impact the construction sector. With plants and processors closing factories across Europe and additional custom controls at British borders, many firms face significant challenges procuring the materials they need, leading to lengthy delays and other unexpected expenditures. These joint pressures are also pushing up prices. Overall, construction material inflation was more than 23 per cent in August 2021 compared to 12 months prior(1), and there seems little sign of this easing. 

When products become scarce and prices rise, the strength and depth of the supply chain come to the fore. 

Why our approach matters 

At Vision Arch, we see our supply chain as much more than just suppliers. Our performance depends directly on it, so we place collaboration at the heart of our agile supply chains. We make considerable efforts to choose the right companies and to maintain and improve our relationships with them over the long term. It’s in everyone’s best interest, so we always strive to have deep-rooted relationships with a handful of suppliers who know us, understand our focus on quality, consistency and success. We operate in a finite world where mistakes can be costly, both in monetary terms and time.  

We expect the very highest standards from our partners and suppliers, and we are always looking for continuous improvement. To ensure this, we need to have established relationships with our suppliers. Quality is our number one requirement, so we’ve built lasting relationships with our European partners to gain a competitive edge.  

Our supply chain is built on the principles of open relationships, accurate and timely communication and honesty. There is always a temptation to place a disproportionate focus on price with tight margins. Still, we know that price led procurement leads to short term relationships and ultimately a risk of substandard quality, something we will never compromise on. 

We assess our potential suppliers’ strengths and capabilities based on their reputation, technical ability, commitment to innovation, size, past performance and management style.  
We are experiencing an unprecedented period of growth as a firm; we are scaling and growing our team and have an extremely healthy forecast of work ahead of us. But we can only be confident of continued success because we are rigorous in our selection process. This means we have developed a bank of partners we genuinely place our trust in, which, in turn, should give you all the confidence you need to know that we are the right partners for you. 

(1) Construction News, November 2021 
 

If you would like to see more about our supply chain and those we partner with, please click here