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Getting the most from your merchant – Why avoiding transactional purchasing is critical to overall project success

Tony Finch, national key account director, Burdens

Delivering projects on time, safely, sustainably and profitably, is the goal of all contractors – but it’s one that has become ever more challenging in the light of continued difficult economic times, while other issues such as the availability of labour show no sign of easing.

Many of these factors cannot be controlled by contractors but there are others that can be met and overcome by a proactive and disciplined approach.

Key among these is the sourcing of the correct materials, as well as plant equipment for the job.

Typically, the specification of products – and the quantity required of each – is determined by a quantity surveyor who produces a detailed bill of quantities (BOQ) following assessment and measurement.

Depending on the size of the project, the BOQ is then sent as it is either direct to a merchant to supply, or to an internal procurement team who will request quotes from a number of merchants before deciding on the final choice of supplier.

Traditionally, many merchants have simply provided a cost for what is in the BOQ, allowing the client decision-maker to opt for a supplier on a truly like-for-like basis.

This is all well and good, but allows very limited opportunity for merchants to demonstrate the true value they can offer, by challenging the brief and offering more sustainable or cost-effective alternatives, as well as adding further value beyond product supply.

It goes without saying that some items on a specification may not be open to challenge, for very good reason, such as items for potable water or high-voltage electrical installations.

And in many other instances, it still may be that a very strong case is needed if a specification is to be altered.

But there is never any harm in asking – and this is where there is the opportunity for merchants to draw on their own significant expertise to recommend solutions which still deliver what is required at either lower financial or environmental cost.

For some simple requirements, there may be numerous products that will adequately fulfil the task. A quantity surveyor may simply recommend the one that he or she knows to have been sufficient in previous similar projects. There is of course nothing wrong or irresponsible in that, but many of the leading merchants work closely with manufacturers and so are party to the latest developments which might function equally well or even better and so can be supplied instead. At worst, they may be able to suggest a like-for-like alternative which can fulfil the brief at lower cost.

A challenge can also arise if a specification from the BOQ does prove to be out of date, if a product is simply unavailable, or in an instance where approval of a product for a particular task, or even in any scenario, has lapsed.

Lapses in approval are not generally publicised, and contractors are therefore reliant on the merchant to supply product which is fit for purpose and approved at the time. Many of the leading national merchants have dedicated teams checking up on the latest approvals – or those about to lapse – and ensuring they supply only products which have a current approval.

The approval status of potable water products is determined based on the date the customer installs and commissions the network, rather than the date of manufacture or purchase. Contractors should remain aware of this distinction and ensure compliance accordingly. Additionally, product approvals may be limited to specific functions or applications and should not be assumed to cover general use.

Whether for approval reasons, or simply because a superior alternative is available, a leading merchant will not just source the product but will advise clearly on lead time to establish whether this is viable for the project.

Meanwhile, it is also remembering that the process of supplying and delivering product goes well beyond simply establishing whether it is available from the manufacturer and can be ordered in. Other challenges such as logistics, and space on-site, play a key role too.

It is rare, for example, in an infrastructure job, that a complete order of a particular product will be needed on the same day. The item may not be due to be installed for several days, or even weeks, and there is no need for it to be on-site for all that time, even if space does permit, so staggered deliveries may make sense. Spreading deliveries over a longer period may also allow individual consignments to be dropped off close to the point where they will actually be used, saving time moving them around site.

Depending on the job, space on-site may in any case be limited.

This, and other considerations, mean that using purchase cost as a sole criterion for supplier selection means contractors may miss out on the opportunity to enjoy additional benefits in terms of guaranteed product approval, the availability of superior product and support around optimised logistics.

For these reasons, the transactional approach is increasingly being moved away from in favour of a more holistic and collaborative way of working, allowing merchants to demonstrate the true value they can offer. Indeed, many of the leading contractors now proactively challenge their merchant to seek savings and efficiencies.

For further information visit https://corporate.wolseley.co.uk/our-brands/infrastructure