Reduce risk by identifying your supply chain

Construction businesses can shore up their supply chains by removing risk, comments Lee Brunsden, BuildingConfidence Community Manager for Achilles.

Lee Brunsden is the Community Manager of Achilles BuildingConfidence. Lee’s main job roles include strategic account management, sales team management, public speaking, presentations, B2B, B2C, SaaS sales, budget forecasting, CRM, solution selling and training.


he construction sector has proven itself to be no place for the faint hearted – seemingly never-ending challenges, from skill shortages, to financial failure of suppliers, low margins and pressure on cash flow.

But perhaps even more troubling is that new research not only exposes a ‘melting pot’ of potential issues – which threaten the reputation and future of construction firm – but also highlights how unprepared many firms are to cope.

Independent research consultancy IFF interviewed 117 construction companies across the UK, USA, Spain, Brazil, Australia, South Africa, the Nordics and the Middle East, which identified three key risks associated with suppliers – lack of information, lack of audits and lack of visibility.

Following the top three tips below will help prevent any supply chain risks:

Challenges obtaining supplier information

Research from IFF found that 39% of construction businesses across the globe do not or do not intend to have a plan in place to find out who is in their supply chain. This presents a fundamental problem, as by not knowing who you’re doing business with, construction businesses are leaving themselves open to unethical practices, illegal trading or reputational damage.

The research also highlighted that 25% of construction businesses across the globe are awarding contracts or tenders to main suppliers without first having an anti-bribery and corruption policy in place. If a quarter of construction businesses are not doing this basic risk prevention measure and checking compliances such as adhering to the Modern Slavery Act with their main suppliers, it puts them at high risk.

The Modern Slavery Act, introduced last year, requires any organisation operating a business or part of a business in the UK, with a turnover of £36+ million, to produce a slavery and human trafficking report each financial year.

Challenges auditing suppliers

Only through auditing the supply chain thoroughly, and rigorously checking supplier details through every tier will construction companies be truly confident of ethically-sourced materials or not falling foul of legislation. This is done by looking at who you’re working with in every tier of the supply chain, identifying any problem areas in the process.

Mapping supply chains isn’t just about compliance. Knowing who you are trading with removes risk, yes, but it also may highlight some suppliers whom you may want to work more with.

Challenges gaining visibility of suppliers

To have a strong, cohesive construction sector, supply chain visibility is vital. It will allow buyers and suppliers to start working together more, which in turn will benefit the sector greatly. We have seen these benefits from running our construction communities across the world. This includes BuildingConfidence in the UK, used by 20 buyers to manage risks associated with 2500 suppliers.

As demonstrated by the research, construction businesses are leaving themselves open to risk and legislative non-compliance, but knowing who you’re working with is a necessary step to safeguard your business’ future.

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