Technology helps quash conflict in the supply chain
These are anxious times in the UK construction industry. Latest figures show that over 330,000 businesses are in financial trouble – and 40,495 of those are construction companies. In fact the Q2 2017 Red Flag Alert from insolvency specialist Begbies Traynor shows a staggering 22% increase in the number construction companies operating in a state of ‘significant’ financial distress, up from 33,222 a year ago.
It is a worrying trend. The construction industry is sadly notorious for a lack of transparency and late, reduced or non-payment. It is an industry where inspections, quality of work and exact specification can all be called into question. Relying heavily on paperwork, payments can be easily forgotten or misplaced. Put this alongside the proclivity for a contractor to pay when paid and both clarity and the financial situation can be very problematic.
The August 2016 report from the Asset Based Finance Association (ABFA), showed payment delays in the construction sector increased 22% over the previous six month period from 67 to 82 days. Late payment can, and often does, lead to discussion, delay and dispute.
In light of the recent Grenfell Tower tragedy and the question over whether the complex supply chain was a contributing factor in the now-infamous cladding being fitted, transparency within the construction sector has never been more necessary. This can be done by taking proactive steps to put in place an overarching system of management and accountability, with the aim of creating a culture of transparency, accountability and collaboration and avoiding conflict.
Like many sectors, construction is now increasingly embracing technology. Online platforms such as TenderSpace offer a comprehensive set of free cloud-based tools that allow those involved in a construction project to confront the challenges of a potentially fragmented supply chain right through the process – from the planning and design phases, through to build and completion.
TenderSpace offers a Finance Checker which allows businesses to credit check suppliers, ensuring that they are solvent, and will issue an alert should the situation change. For a small business attempting to weather the current economic storm, the ability to check the credit rating of potential project partners, main contractors and supply companies is an important step in protecting yourself from late or non-payment and is key to avoiding conflict within the supply chain. Using the Finance Checker means you can be sure your decisions on who to work with are well informed and your business is protected.
The functions TenderSpace offers also increases transparency across each project. Construction managers can keep track of all aspects of the supply chain and can easily understand what tests have been conducted, by which suppliers and on what products. Questions and queries can be asked, problems identified and conflict avoided.
These are tough times for the construction industry with the political and economic uncertainty set to continue. But embracing technology to avoid conflict and costly delays and ensure a transparent supply chain is a vital step to protecting your business and steadying the boat for the rough waters ahead.
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