A well-known aspect of the construction industry is that it is a fragmented industry with a large share of working people engaged with it. Due to its nature of operations and fluctuations in demand, the construction industry thrives on hiring contractors and subcontractors on an as-needed basis. Likewise, one can find multiple sources of suppliers nationwide for all the hardware items such as windows, doors, drywall, doorknobs, and HVAC equipment. Suburban Homes, as an organization, realizes the importance of longterm partnership with various suppliers and contractors and the many benefits of such a partnership. Suburban Homes is planning to revisit their existing partnerships with various suppliers and contractors because competition is rising and profit margins are declining. Suburban Homes is lookingfor partners and suppliers to improve profits and increase customer satisfaction. Suburban Homes developed a set of criteria to select partners for construction work and supply of materials:
• Collaboration • Reliability • Value engineering (higher quality at a competitive price)
• Performance • Trust • Transparency in commercial deals and communication With its ambitious plan of expanding its business to several southern states and its vision to deliver high-quality construction that adheres to local, state, and federal standards as well as exceed industrial standards for quality, Suburban Homes is willing to identify, negotiate, and partner with competent and reliable suppliers and contractors. Adam Smith entrusted you with the task to develop a procurement and supply chain management plan. For this purpose, you were asked to do the following tasks:
Tasks to Complete
• Assess the current market situation.
• Identify prospective partners for supply of materials and construction work.
• Select an appropriate type of contract for each supplier (it may not be same for each).
• Assess risks associated with each contract.
• Develop contract terms and conditions.
• Perform qualitative assessment to prioritize risks.
• Develop a procurement policy.