Key Issue

REDUCING RISK IN THE SUPPLY CHAIN

Doug Aris, Head of Construction at Achilles, outlines the red flags that could be costing businesses work.

Things that may once have passed unnoticed are now a potential red flag for contractors Principal contractors have always been focused on eliminating risk in the supply chain, but as we enter the recovery period post-COVID, it is more of a concern than ever. A major fear is a supply chain partner failing, which can have a significant impact on a project – creating a knock-on effect for the rest of the project, it results in delays and, in some cases, could carry financial implications for the main contractor.

Sub-contractors are coming under more intense scrutiny than ever, so it’s vital that businesses make sure they’re keeping their house in order to put themselves in the best position to secure new projects. While pricing will inevitably remain a major factor in procurement, there are many other considerations at play.

Things that may once have passed unnoticed are now a potential red flag for contractors and could result in projects and longer-term work being lost to competitors who are better prepared and able to present themselves as a safer, more solid prospect.

Polish your PQQs

Failing to keep prequalification details and accreditations up to date is an obvious smoke signal for contractors, who will be concerned that it is a sign that the business is in trouble. Electrical contractors should take the opportunity to give PQQs a spring clean – check they’re all in place and up to date.

PQQs are an essential tool for contractors so it’s important that they are completed fully in order to win lucrative new contracts. Make sure that all answers are appropriate and that nothing has been excluded.

The fact that you have PQQs in place gives contractors confidence in the strength of your business and its good governance – maintaining a high level of accreditation will pay dividends.

Don’t delay policy renewals

In the same vein, it’s vital to avoid letting insurance renewals slip – it will be a glaring concern for contractors and may raise concerns around the viability of your business and its long-term future. Is there a reason that the insurance hasn’t been renewed, or perhaps the company cannot afford to pay at present – either way, neither scenario will give a potential customer the confidence to hire a business.

Don’t delay in renewing policies for another day and don’t give contractors any cause for concern.

Recent references

The bar is higher than ever for businesses looking to be appointed to new supply chain frameworks – confidence is key. Solid references are a good way to demonstrate your track record, quality of work and reputation for delivery so it’s important to make sure those are in place should you need them. Make sure they’re recent and relevant – make things as easy as possible for the contractor.

Safeguard your reputation

In today’s connected world it’s important to remember that references may not be looked at in isolation. Do you have social media networks or review pages and how do they portray your business?

ESG is a major focus for contractors and we know that the supply chain plays a key role – they must only align themselves with businesses that share their values and uphold good governance. If you’ve experienced negative feedback that is public, or had any difficulties with your company’s reputation, it’s important to take steps to address that as quickly as possible. While it may not have impacted on your P&L – and so may not feel like an issue for the business – a contractor may well take a different view.

Take the time to take a critical look at your own sustainability strategy

Take your eco-credentials seriously

Similarly it’s also critical to make sure you measure up on the sustainability front. Sustainability is a major focus for the construction industry as it works towards a zero carbon target in the not-too-distant future. Contractors are under intense scrutiny to make sure they’re playing their part, and their supply chain is an important part of that. Make sure you’re taking your eco-credentials seriously.

Take the time to take a critical look at your own sustainability strategy, pinpoint any weaknesses and put a plan in place to make improvements. No-one expects a comprehensive, all singing, all dancing programme of measures, but make sure you at least have the basics in place.

Consider joining new supplier networks

Businesses that aren’t part of any supplier networks should think about whether that could be a new avenue for growth – it will certainly create news leads and may also make the business appear a safer, more attractive prospect when it comes to bidding for new work.

Achilles helps construction companies to reduce risk in their supply chain, so has a strong grasp of what their challenges and priorities are, and what they’re looking for in a supply chain partner – make sure you’re safe and risk free and eliminate any unnecessary red flags to stand yourself in the best stead in a competitive marketplace.