Streamlining Supply Chain Management Using Construction ERP Software
Supply chain management is an important key to ensuring you can manage your construction costs. Successful construction projects are dependent on having a flexible, proficient supply chain in place.
Construction ERP software can help you overcome many issues in managing your supply chain by delivering detailed information to your team when they need it so they can track materials, equipment, plant, and labour more efficiently and plan better.
Our blog post will cover the key steps you can take to improve your supply chain management processes, as well as provide you with details about how Construction ERP software can make it easier to manage your supply chain and keep costs low.
What is Construction Supply Chain Management?
Construction supply chain management is all the processes, systems, and practices you use to manage and track supplies for your projects. These supplies include information, labour, materials, and equipment.
Improving your construction supply chain management means improving the processes for gathering resources that you need to deliver a project, as well as managing relationships in the supply chain, including with manufacturers, suppliers, contractors, owners, and more.
Construction Supply Chains are Complex
Supply chains are made up of multiple components and third parties. Over the course of any construction project your supply chain will change and evolve. There’s your initial supply chain plan, followed by the work to seek out materials, equipment, and services, delivery logistics for these supplies at the correct time to support construction of the project, as well as reverse logistics for items that are defective or unsuitable.
Managing your supply chain is an ongoing effort that can be made more difficult by lack of transparent data or communication hold ups. Because managing your supply chain involves many different third parties from manufacturers and suppliers to transport and logistics, there is the potential for delays at every stage. One delay can lead to a cascade of scheduling problems and your budget could balloon if you aren’t able to manage the issues.
Understand ERP Supply Chains
Managing the complexities of supply chain management requires a solution that can handle a large flow of data. Integrated construction ERP software acts like a central hub for various supply chain activities. Without it, you can be stuck managing multiple systems. ERP software allows data to flow freely across departments, eliminating confusion and data silos.
Using construction ERP software to manage your supply chain means data can be accessed by multiple departments. For example, using ERP software like Nimbus you can convert your project quotes into a materials list, and send the list to various suppliers for an overall price quote, and then create a Purchase Order for the materials, which can be tracked and managed.
Streamline Procurement Processes
If you’re still handling your project procurement needs manually, you may be creating unnecessary delays or bottlenecks when multiple people on your team need to review documents. Look for an ERP system that allows you to automate parts of the procurement process so that you can act more responsively and efficiently when there’s new information regarding your supply chain.
Using ERP software that’s made for construction can help you automate procurement processes by generating purchase orders based on predefined criteria, automatically ending RFQs to your suppliers, and facilitating communication between your procurement teams and vendors.
In addition, using software to manage your construction data makes the process more transparent so it’s easier to spot issues and make decisions that will allow you to avoid bottlenecks.
Manage Your Inventory Efficiently
Every construction project faces uncertainties like changing materials costs, labour shortages, and emergencies. You want to ensure your inventory is managed as productively as possible, so you don’t incur extra costs for overstocking or running low on your regular stock.
For example, you can track inventory levels by reviewing your data on materials usage, reorder points, and supplier lead times. With this kind of inventory intelligence, you’ll be able to act to prevent shortages and reduce your overall carrying costs.
Enhance Vendor Collaboration
Successful construction projects rely on effective communication and collaboration to handle all of the details. Similarly, effective construction supply chains require regular communication among your project managers, subcontractors, suppliers, product vendors, and transportation companies.
Working with the most recent information so you can spot potential delays or identify higher costs before they impact your project leads to better planning and improved outcomes overall.
Manual tracking of materials is time consuming and may not provide sufficient lead time for you to comply with your project schedule.
Modern construction companies can use multiple digital tracking methods to ensure that supplies are available when they are needed. For example, RFID tags, QR codes, and GPS tracking can all help you monitor materials shipments, as well as providing project managers instant visibility into the status of your shipments, estimated arrival times, and potential delays.
Integrate with Financial Management
Construction is an industry with complex financial management. The ability to manage and track your supply chain supports and streamlines information about your project finances. By integrating your supply chain information directly to your project finances, you can use business analytics to identify areas where you have high logistics costs and use the information to revise your processes where possible.
Integrating your supply chain data with financial data allows your project managers to closely track costs associated with procurement, inventory, and material movement, and ensure accurate financial reporting.
Using ERP software addresses many of the biggest challenges in construction supply chain management. You can improve your procurement, inventory, communications, and material tracking processes, leading to increased project efficiency and reduced risks.
Moving to more automated processes helps you reduce waste, so you no longer have bottlenecks or repeated work.
With everyone on your team accessing centralized data everyone involved in the project has access to the most up to date information about project progress. It provides the basis for analytics that can alert you to inefficiencies or issues that may impact your construction operations.
Improving your supply chain processes and systems can seem like a lot of work, but the investment is worthwhile because using tools like ERP software make your processes more transparent, improve your ability to control costs, and enable you to complete projects on budget and on schedule. Ultimately, working with an efficient supply chain means you’ll be able to complete more project successfully and win more jobs overall.
Interested in using construction ERP software to help you to manage all the variables in your supply chain? Get in touch to learn more about Nimbus.
Release date: 22 September 2023