Fear of supply chain failures boosting collaboration

Aaron Morby 1 year ago
Share

Around nine out of 10 contractors say the biggest headache they currently face is industry supply chain fragility.

Fear of supply chain failure now dominates all other concerns like labour availability and materials cost and supply, according to consultant RLB’s annual procurement trends report.

But widespread concern about the supply chain in construction has pushed clients towards greater collaboration with contractors.

Contractors are also seeing an improved appetite for sharing more risk as the climate switches from managing towards investing in the supply chain.

RLB’s Procurement Trends survey found more than half of contractors (54%) saw increasing collaborative practices in procurement, while 35% of contractors stated that clients were more willing to share risk.

In response to market volatility, 16% of contractors now report increased use of project bank accounts.

Around two-thirds of firms also warned of a significant increase in the cost of performance bonds, with 23% reporting they were placing fewer bonds as clients were no longer willing to pay for them.

Paul Beeston, RLB Head of Industry and Service Insight, said: “In previous tightening markets, more competitive forms of procurement have seen a resurgence.

“But that is not universally the case in our 2024 survey. More than half of contractors are seeing collaborative practices in procurement, including a willingness to share risk.

“Clients may still have red lines for their own risk appetite, but they are willing to procure in ways that avoid just shifting that risk to the supply chain.

“The most collaborative routes to market are generally found on smaller projects, fit-outs and refurbishment works, with the highest competitive levels displayed on small to mid-sized projects (£5m to £7.5m) and within the retail and infrastructure sectors.”

At the same time RLB’s survey also found a 9% increase in the use of design and build to 67%, the highest proportion since the start of the survey.

Latest news

Comment: Gateway is acting like a barricade

Contractors left banging their heads on an (unbuilt) brick wall
18 hours ago

Final phase of £1.5bn Elephant and Castle revamp hits planning

Get Living submits revised plan for 500 homes and 450-bed student block
2 days ago

Ealing backs final phase of £1.3bn estate rebuild

Friary Park estate rebuild in Acton reaches end stage
17 hours ago

Green light for scaled-down Nottingham student tower

Glasshouse Street scheme will deliver 247 student rooms
18 hours ago

Aston Villa to revamp North Stand

Club to reuse existing structure rather than complete rebuild
2 days ago

Mace signs ex-ISG director to lead Euro health and tech push

Gary Sweeney to head up healthcare and life sciences consultancy arm
17 hours ago

Sir Robert McAlpine claws way back into profit

Firm says return to profit and strong cash balance validates new strategy
2 days ago

Severfield to cut staff by 6% amid pricing pressure

Steelwork contractor warns of extended tighter pricing due to project delays
2 days ago

JRL completes sale of 50% stake to Malaysian giant IJM

Deal boosts balance sheet and kicks starts growth plan
2 days ago

Green light for £100m Liverpool Baltic station build

Enabling highway works to start in the autumn
2 days ago

First live tests for flying construction robots

Drones can lay construction materials at height on site
2 days ago

Three firms land £170m Gentoo Sunderland housing deal

PHS Solutions, Esh and RE:GEN to deliver 10-year home upgrade plan
3 days ago

Gateway gridlock hits build-to-rent delivery as starts nosedive

Build to rent starts plunge 18% in the capital
3 days ago

Call to shift Gateway 2 checks to end building bottleneck

"The current system isn't working but we all want to see safe buildings"
3 days ago

GBN launches £600m bid race for SMR engineer roles

Owner engineers to provide technical and assurance services
3 days ago

Wates hires ex-Homes England chief to head public sector push

Robert Stone to spearhead its public sector and national frameworks strategy
3 days ago

Acheson Construction collapse costs suppliers £8.5m

One frustrated creditor seized a telehandler after contractor went into administration
3 days ago

Dominus wins go-ahead for 173-bed Glasgow scheme

Old Wynd Street job expected to cost around £25m to build
3 days ago

Safety Regulator misses deadline to clear Gateway 2 backlog

Investors pulling out of funding high rise buildings
4 days ago

CITB still sitting on £95m cash pile

Staff numbers jump from 666 to 763 as training body wage bill soars
4 days ago

£500m road surfacing framework market call

NEPO goes out to consultation on north east regional highways deal
4 days ago

Two share £220m Scottish rail repairs and minor works deal

AmcoGiffen and CPMS win civils and building repair deals
4 days ago

Builder wanted for £60m London leisure and flats job

Tower Hamlets aims to replace St George’s Leisure Centre in Shadwell
4 days ago

Contractor confirmed for business park expansion

Roe Developments to start on next phase of Castle Donington scheme
4 days ago

Driver escapes injury as scaffold collapses onto van

Major three-lift scaffold fall blocks north London high street
1 week ago

Gilbert Ash to be sold to staff

£267m turnover contractor to transition to an Employee Ownership Trust
1 week ago

M Group seals biggest-ever deal with Telent takeover

Digital infrastructure specialist deal lifts turnover to £3bn
1 week ago

Aggregates firm Ashville went down owing more than £3m

Debts revealed in Companies House update
1 week ago

Cardo saves 100 jobs at Breyer roofing arm

Private equity-backed Welsh maintenance group continues to expand
1 week ago

Excavator knocked off lorry going under bridge

Traffic Commissioner inquiry after accident in south London
1 week ago

Contractor services