Sep 22, 2020

4 Ways You Can Improve Your Construction Procurement Strategy

4 Ways You Can Improve Your Construction Procurement Strategy

The right construction procurement strategy is critical to completing projects on time and within budget.

Procurement is the process of acquiring new products and services for a construction project. To the layman, it may sound like just a fancy word for buying something – but the reality is that while procurement is a simple concept, the scope of work involved with procurement management is wide and varied, making it a complex practice with many moving parts.

Construction procurement managers have to juggle a wide range of variables and factors when they land a construction contract, including client preferences, value for money, time constraints, risks, regulations, expertise, rebate agreements, accountability, environmental factors and much more.

One of the little-known secrets to  improved construction procurement is better management of supplier rebates. Rebates often form part of a vendor’s building material sales strategy. A rebate is an incentive paid by vendors to buyers for the purchase of large volumes of materials. The vendor essentially pays you back a percentage of the money you have spent after you meet a specific threshold. 

Managed well, rebates can lead to significant cost savings and improve the bottom line. Project managers who have a good rebate programme can reduce their total annual spend by thousands. Conversely, those that manage their rebate programme poorly – or lack one entirely – fail to maximise their profit.

To get better rebates from suppliers, we recommend a four-step process.

profit and supply


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