Home » Online Exclusives » From Survive to Thrive: How Supplier Collaboration Can Build Business and Increase Profits

From Survive to Thrive: How Supplier Collaboration Can Build Business and Increase Profits

By Shawn Casemore
Casemore and Co.

Any successful construction project requires a myriad of resources, from skilled labor to subtrades to suppliers. Collaboration between all parties provides the best possible means to not only survive, but thrive, in today’s increasingly competitive marketplace, where rising commodity and labor costs in conjunction with downward pricing pressure from clients are eroding margins and killing business.

Most large projects require two things: time and materials. Both are supplied, and often controlled by, the subtrades and suppliers. Considering that price, quality and service are tied directly to a contractor’s ability to effectively manage time and materials, there is sufficient incentive to build stronger and more meaningful relationships with key trades and suppliers.

There are several successful means to maximize supplier relationships through increased collaboration, resulting in new market opportunities, increased profitability, and sustained high quality.

Start Small, Be Selective
It is virtually impossible to collaborate with every supplier and trade. Take time to identify the key ones that are integral to your success. Explore opportunities to work together on projects, solutions, or on business development. Aecon Buildings, Inc., an AGC of Washington member, and Northland Power recognized the value in collaborating on building PV energy plants to maximize productivity, profitability, and business opportunities. This came only after both parties considered market opportunities and their existing client needs. In what areas might you engage key suppliers to develop or maximize new business opportunities?

Top Down and Bottom Up
Executives from Chevron and one of their key suppliers presented at a conference in late 2012 on the benefits of collaboration between both companies. In effect, they had purposefully partnered to tackle new business opportunities in order to compliment each other’s strengths. More importantly, discussions and alignment at the top levels of both companies were just as critical as those at the operational level to ensure success of the collaboration. For any collaboration to be successful, those in the C Suite have to be willing to open the door and listen in order to create a shared vision. Others in the company will follow suit. If you want to improve your relationships with suppliers or trades, make sure to start with discussions at the top to ensure outcomes and expectations are clear.

Dialogue Before Deliverables
Typically, relationships and dialogue with key suppliers, contractors, and trades are often handled like a game of cards. Both parties retain their poker face, displaying little emotion and even less information. This might have been the best approach in 1982, but today it just doesn’t provide the foundation for a strong and trustworthy relationship, and if you are to collaborate on solutions and improved processes, dialogue must have meaning. How are you driving innovation, and in turn, new market opportunities today? Decide what makes sense to communicate, how your key suppliers and trades might support you in achieving such, and then begin the dialogue. You will be surprised how many suppliers provide new ideas and alternatives you hadn’t considered previously.

Building a successful company relies on satisfying customers, something that is virtually impossible in construction to do alone. Focusing on opportunities to collaborate with key suppliers, trades and subtrades provides the basis for building successful, long-lasting relationships to maximize business growth and customer value. In deed, the ingredients to succeed in the coming decade will rely on your ability to collaborate. Now is a good time to get started.

Shawn Casemore is president and founder of Casemore and Co Incorporated, a management consultancy helping business owners and leaders improve operational performance and maximize profitability. For more information on Casemore and Co. and for additional resources to help improve operational performance, visit its website at www.casemoreandco.com.