Collaborative discounting in the construction industry

1053

Suppliers in the construction industry are well used to having to drop their prices in order to remain competitive and then face the challenge of finding cost savings throughout their organisations or supply chains to maintain profits.

While looking down your supply chain to achieve savings is always possible, little assistance is available or possible from your clients. So how do you reduce costs throughout your entire supply chain and provide your clients with the ability to both reduce their internal costs and at the same time reduce your costs when dealing with them?

For most construction companies this can seem like a Sisyphean task as clients are slow to integrate multiple suppliers systems in their organisation as the cost of this would be counter-productive. Fixed term contracts and EU regulations mean that long term collaborative planning in construction is not always possible when dealing with state or government agencies. Many of the hidden costs in construction are brought about by the labour intensive interactions when dealing in dispute resolutions with clients. The weakest points in any supply chain are the ones that have the least automation. From the sub-contracted independent tradesmen onsite to the large government or private clients that control the majority of the work.

For other industries the task is easier and private collaborative supply chains are becoming the norm, where Apple and Proctor & Gamble have set the bar. However, for reasons described above, traditional collaborative supply chains do not have a home yet in the construction industry.

Pieces of the puzzle are present and available to help manage tasks such as procurement and onsite project management but as yet very few offerings exist in construction that provide the technology and the management to act as an independent integrated middle layer between clients and main construction companies. In the end people don’t want to buy technology, they want to buy a solution.

Introducing new technology to an industry that has fought against it for years is not an easy task, so the focus has to shift from selling technology to providing a managed service. A managed collaborative supply chain where clients and construction companies can come together to achieve cost savings that are far greater that anything that can be achieved in isolation. This is what we at VRM call collaborative discounting.

In VRM our focus is to partner with the pieces of the solution that we don’t believe should be replicated. On the technology side areas such as Asset Management, ERP and Accounts are too embedded in companies to be replaced so integrating with them is the only logical option. Then finding partners that can provide a management layer on top of our collaborative supply chain platform Refurbify is a must. Our goal is to bring clients and partner construction companies together and allow them to achieve their linked goals through an independent yet tailored managed service called Refurbify.

VRM Technology Limited (VRM) is a UK software business targeting the construction industry for new build and refurbishment works. It has developed a Platform-as-a-Service (PAAS) technology “Refurbify” that provides a combination of Internet and smart phone technologies that enable collaborative supply chain management at the work team level.

For more information please email: neill.ryan@vrmtechnology.co.uk

Neill Ryan

CEO

VRM Technology Limited

Tel: 0203 468 7560

info@vrmtechnology.co.uk

www.vrmtechnology.co.uk

LEAVE A REPLY

Please enter your comment!
Please enter your name here