Issuing a tender can be a pretty tense process. Often, that’s stating it mildly...
You and your team sit down, painstakingly put together cost projections for materials, man-hours and the construction technicalities at hand. You arrive at the best price possible and you submit it to the client.
But, what happens meanwhile? Your competitors are doing the same. How much is their bid? Have they struck a great deal with a global supplier to source products significantly cheaper than you? Only time will tell. And usually a lot of nail biting, too.
In many ways, the construction industry is unique when it comes to budget considerations.
Sure, budget is paramount for any business. But, when you’re issuing a tender, getting your budget the right means the difference between having work to do and having nothing to work on at all.
Naturally then, the continuing trend in global sourcing is of particular interest to construction companies. Here’s how to get it right.
Stay on top of your schedule
When it comes to the different stages of a project, each can potentially be held up waiting for inexpensive and often very basic components that get stuck somewhere in the supply chain.
If you’re sourcing from somewhere in Asia, for example, it’s important to be especially diligent about the supply chain schedule. A 55% saving off the domestic price is an attractive reason to source any given widget globally.
But if they get held up and slow down the next stage of funding, your savings are nullified and major cash flow issues arise.
Seafreight is the most common form of shipping used in global sourcing and takes on average around 4 weeks. Airfreight can reduce that down to a few days, but is more expensive.
It’s worth making contact with an airfreight company to have a standby logistics account registered. Likewise, having backup component suppliers for emergencies is especially important when taking your supply chain global.
With these contingencies in place, you can reap the massive savings and ensure you’ve got your bases covered.
Quality assurance measures
Quality is a major concern for any business looking to outsource globally for the first time, and construction especially so. The idea of poor quality components jeopardising the safety of a project is beyond unacceptable.
Different regions and markets have different ideas of what constitutes “satisfactory quality” or “fit for purpose”. For that reason, paying a reasonable fee to an impartial third party inspector with a predetermined set of factors for what you consider acceptable quality is the ideal way to keep your project on track.
If everything’s checked by a reputable auditor, you get the peace of mind you need to focus on the project.
Be aware of cultural barriers
Finally, comes the inevitable cultural barriers.
It’s often quite incredible how different perspectives can be overseas. For that reason, being crystal clear and unambiguous in the language you use with your orders is tantamount for a successful project.
Classic examples which anyone who has travelled internationally will appreciate include:
- “Neutral” colour schemes are not the same in all countries
- "Normal" toilets and bathroom fittings are very different
- “Environmentally aware” buildings and building materials mean very different things in different countries
In addition to committing to a policy of crystal clear communications, it’s worth doing a little research, too. Head to Google and search for info dealing with different cultures in a business context such as this article on the Chinese holidays.
If you’d rather speak to someone in person, call one of our specialist outsourcers with a strong track record of saving money, and even stronger relationships built while sourcing globally for construction companies.