How you manage construction vendors says a lot about your business. The manner you choose, communicate with, and work alongside your vendors could mean the difference between project success and complete chaos. It can also affect how customers view (and review) your business.
And the bigger your business is, the more vendors you are likely to have. We have seen contractors struggle to manage multiple vendors across different projects. Today, we want to share some of the best tips that we have seen work well for contractors regarding managing construction vendors.
Instead of dealing with delayed projects and angry clients, please read Contractor’s Society of America‘s guide on managing construction vendors.
Establish A Strong Line of Communication from the Start
First things first: when selecting material suppliers, you should establish a strong line of communication. But it’s not only about providing your contact information and even alternate contact information (although those things are important to do). It is also essential to establish what your goals are for the partnership. When onboarding a new vendor, make sure they understand the scope of the projects you typically face.
Onboarding should also entail discussions about how the vendor intends to deliver reports should a client require them. And if you want your vendor to use the same project management platform as your company, be sure to provide them with all the information they need.
Also, be sure to define your expectations clearly. Tell any potential vendor how often you would like status reports and the method(s) you prefer to receive them.
Evaluate the Performance of your Vendors
Taking inventory of how your vendor is performing is crucial for the overall success of your company. Some contractors assume that their suppliers are doing an excellent job if projects are getting done on time. But improved performance is usually attainable in one way or another. So you need to gather specific information on your vendors and review it regularly.
- Ask your Crew – A great source of information on how your vendors are performing is your crew. Ask them what they think of the vendor if supplies are making it to the job site on time, what condition the supplies are in when they arrive, and their interactions with the suppliers.
- Evaluate Safety Issues – When evaluating your vendors’ performance, be sure to compare the way they operate to your safety procedures. Are they following the safety protocols you set forth when you hired them? If not, you could be risking dangerous accidents and potential lawsuits.
- Flexibility – Have you had to change a supply order? If so, how willing to accommodate were your vendors. The fact is you will need to make changes (delivery location, method, materials, etc.) from time to time, and your vendor needs to be able to adapt.
Keep notes or official reports on how your vendor is performing throughout your professional relationship. This point is especially important when a vendor makes a mistake. Nobody intends to mess up, but it happens from time to time. When it does, it’s important to document certain aspects of the failure.
For one thing, you need to identify which vendor made a mistake if you work with multiple suppliers. It also helps determine the impact of the error i.e., missed deadlines, injury, or lost clients. Documenting the vendor’s reaction and explanation of any incidents is also essential. And when something doesn’t go right, don’t assume that it was the vendor’s fault. Take an unbiased look at any incidents so you can determine whether the responsibility lies with your company or the vendor.
Collect Financial Data
Chances are, vendor costs are a big part of your company’s budget. To make sure you are getting the best value for your money as possible, gather and evaluate critical data such as:
- 1) Itemized Materials – Itemize the materials that your vendor supplies to make cost analysis easier.
- 2) Pricing Breakdown – Request that your vendor breaks down in detail the prices for items and services
- 3) Discount Information – Be sure to calculate any discounts you may be receiving for large orders. And make sure you are receiving any applicable discounts as well.
Helpful Resources for Contractors
Good help is undoubtedly hard to find. But here at Contractors Society of America, we do our utmost to provide your contracting business with the resources it needs to succeed. Help with construction vendor management is just the beginning. We have a wealth of resources specifically for contractors, including industry studies, networking opportunities, and more. Grow your business and become a member today.