In order to mitigate issues like price inflation and poor product availability, contractors and housebuilders need to expand and diversify their materials supply chain.
This involves strategic planning and proactive efforts to identify and onboard new suppliers while maintaining the quality and efficiency of operations.
Why is it important to have a wide, diverse supply chain?
A diverse materials supply chain builds resilience and mitigates risks by reducing dependency on a limited number of suppliers. This diversity helps mitigate risks associated with potential disruptions, such as supplier failures, materials shortages, geopolitical issues, or unforeseen events like natural disasters or global crises.
Below we explain the steps you can take to diversify and expand your supply chain.
Market research and analysis
Conduct comprehensive market research to identify potential suppliers. Explore different regions, industries, and markets to diversify sourcing options.
Supplier identification and qualification
Seek out suppliers that offer different materials or services, both domestically and internationally. Evaluate potential suppliers based on quality, reliability, cost, and adherence to sustainability standards.
Building relationships and networks
Attend industry events, trade shows, and networking sessions to establish relationships with new suppliers. Engage in discussions to understand their capabilities and how they align with your supply chain needs.
Risk assessment and mitigation
Assess potential risks associated with new suppliers, including financial stability, reliability, and geopolitical factors (especially for international suppliers). Develop contingency plans to mitigate potential disruptions.
Contractor negotiation and collaboration
Negotiate contracts that establish clear expectations, pricing structures, delivery schedules, and quality standards. Foster a collaborative relationship built on trust and mutual benefit.
Technology integration
Implement digital tools and platforms that facilitate communication and collaboration with new suppliers. Integration with supplier relationship management (SRM) software can streamline processes and ensure transparency.
Diversification across categories
Consider diversifying not only geographically but also across different types of materials and services. This can include exploring alternative materials, different grades or standards, or eco-friendly options.
Continuous monitoring and evaluation
Regularly assess the performance of new suppliers against established Key Performance Indicators (KPIs). Monitor quality, delivery times, compliance, and customer services to ensure they meet expectations.
Collaboration with industry experts
Seek guidance from industry associations or consultants experienced in supply chain diversification. Their insights and expertise can provide valuable strategies and best practices.
Compliance and ethical considerations
Ensure all new suppliers adhere to ethical standards, sustainability practices, and compliance requirements relevant to the construction industry.
By proactively seeking new suppliers, fostering strong relationships, leveraging technology, and maintaining stringent evaluation criteria, contractors and housebuilders can successfully expand and diversify their supply chains, enabling resilience and adaptability in an ever-evolving industry landscape.
Instantly expand your supply chain with The Build Chain
At The Build Chain, we understand those with responsibility for purchasing materials for construction projects are often low on time, so our solution helps you find new suppliers quickly.
On online procurement platform allow contractors and housebuilders to submit one enquiry form for materials which is then distributed to our network of suppliers which fit the location and nature of the enquiry.
With over 500 branches on The Build Chain, it’s easy to find new suppliers who have what you need where you need it.
Book a demo and we can sign you up straight away, allowing you to make enquiries today.
