The UK construction industry currently faces an unprecedented challenge. The Covid-19 pandemic, inflationary pressures and skills shortages have created an uncertain operational environment for contractors, clients, and the supply chain alike. Uncertainty is an unwelcome addition to any project, but as a reliable, fair, and non-adversarial contractor, we have a proud history of reducing this through ‘doing right’ by the organisations we interact with. This was evident to our approach in the last economic recession in 2008, when we wrote to our suppliers to assure them of our commitment to fair payment and flexibility, rather than seeking to take advantage of the market conditions. This has held us in good stead in the intervening years, enhancing relationships with our suppliers and leveraging this to deliver the best results for our clients. Faced with the current uniquely challenging times, we have worked proactively to further strengthen our approach, prioritising building mutually beneficial relationships and reducing uncertainty for all.
Supporting our supply chain
With payment disagreements and delays continuing to blight the reputation of the UK construction industry, we have always sought to lead the way with our approach, with terms of always less than 30 days and negotiated preferential payment terms where helpful to our subcontractors. As testament to this, we have an enviable Dunn & Bradstreet ‘low risk of slow pay’ rating, which exceeds that of many of our industry peers, and our reputation for fairness enables excellent working relationships with our supply chain, enhancing project outcomes for our clients.
Amidst the Covid-19 pandemic, as well as ensuring robust and exacting additional health and safety controls maintain safe working practices, we have also adopted flexible procurement practices to protect our subcontractors from volatile material cost increases. Our approach includes facilitating the earlier procurement and payment of materials to provide enhanced protection against cost rises in the short and longer term.
Maintaining supply chain relationships
Throughout our history we have prioritised maintaining an open dialogue with our supply chain and building longer term, mutually beneficial relationships. Maintaining this openness enables us to respond to issues with our suppliers effectively, intervening where appropriate and maintaining a consistent and fair approach to working together. This has been a cornerstone of our success as a business.
To support and strengthen supplier relationships, we hold periodic meetings with key supply chain partners to review mutual performance at various levels of our business. These are supported by regular 360-degree feedback and discussion sessions with our delivery teams on an individual project level to maintain and enhance our relationships.
Diversifying our supply chain and supporting local businesses
As a local SME, we have benefitted from significant opportunities to develop and grow our business within East Anglia. In turn, we prioritise ‘giving back’ through investing in the local supply chain. We continually seek opportunities to expand our supply chain, as well as focussing on local expenditure to ensure that at least 60% of the project’s turnover is reinvested into the local economy, typically through sub-contractors within 45 miles of site.
Helping our clients manage risk in unprecedented times
We take proactive steps to aid our clients in the management of risk. This includes advising on selection of materials to highlight those with supply issues and cost increases, suggesting alternatives where appropriate to help protect our clients from the market conditions. Supported by staged payments from our clients, we are increasingly procuring materials early to avoid the risk of future price rises. On a recent healthcare project, we procured all materials early and sorted them offsite to safeguard against inflationary, availability and lead-in issues.
Industry summaries of cost increases are shared with key clients to aid in their planning and design of future schemes. Recently, we sent interim letters to our key clients in Cambridgeshire advising of steel, insulation, plasterboard, and concrete cost increases. This has facilitated discussions regarding future tenders and approaches to fixed price and risk-sharing. This exemplifies our open, solution-focussed and collaborative approach to project delivery in difficult economic times.
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