Supply Chain Matters Assignment Sample
1. Introduction
Procurement methods define as a specific process in which the procuring entity purchases some services and multiple goods and products for the company. Procurement refers to some activities that obtain the goods and services that a company requires to support its operations daily (Montalbán-Domingo et al., 2019). These kinds of operations include sourcing and negotiating terms and various inspecting and receiving goods that are essential for the companies to keep the data in each step of the procedure. The main aim of the procurement methods is to enable the firm to gather some visibility into the performance of the stakeholders. Having good transparency help the company to have higher compliance about various costs and goods and services quality and so on.
A smooth supply chain has a massive impact on the collaboration of a company and it makes the company and its suppliers make more efficient. If there is a need for the transportation of the products, the company needs an inventory for its operations (Iqbal et al., 2022). The supply chain enables every advantage possible for the company so that the company can maintain its inventory. The main purpose of good supply chain management is to deal with turning the raw materials into the finished matter and then it helps the company to transport and distribute the goods and products to various consumers. It contains a system that connects the company to link with the suppliers and allows the company to produce and distribute various products and goods.
The study focuses on some of the suited procurement methods for the contractual obligations and the simple implementation of creative and innovative approaches to de-risk a specific construction. The study also focuses on the basic design of the UK economy related to procurement and supply chain methods and prime role played by construction companies related to the civil engineering industry in the economy of the country. The study also elaborates on how the quality assurance system manages the best practice in the constructional development and some practical approaches utilised by the contractors to make sure the project is the best fit and provides the best value for money. Lastly, a conclusion is added to the matter.
2. Best procurement methods for the contractual obligations
There are some common procurement methods for contractual obligations in the UK. some common procurement methods are such;
Open tendering: open tendering is the main method for competitive bidding for a company and it enables the companies to bid on the various products in an open competition. Open tendering allows the construction companies to be advertised locally and have some unbiased specifications and have multiple measures in the objective evaluation (Bernstein and Peterson, 2022). For example; two of the biggest contractor companies in the UK, Balfour Beatty and Interserve use the open tendering method of procurement to encourage efficient competition to obtain some products based on value for money. These two companies advertise their company locally and use some open measures in bidders and grant some least-cost providers to sanction the contract negotiations. However, this method is not suitable for the companies for making a large and massive complex and therefore, the companies in the country try to avoid this kind of method for making some big constructions as it focuses on the output processes for the stringent obedience to multiple standards.
Two-stage tendering: In this method, the construction company uses two stages and this method is very flexible for the clients and companies as it enables more spaces to fulfil the mutual requirements (Handfield, Jeong and Choi, 2019). The first stage is the receiving of the proposal in two envelopes. One is the proposal and the other one is financial information. The second stage is completed after the proposal and this method includes some methodology for the works. For example; the two companies, Balfour Beatty and Interserve use this method to evaluate some proposal and opens the financial proportions it combines both the proposals and helps the companies to bid on the contractors.
Single source: It is a method that is non-competitive and used in various specific situations and it happens when the procuring party acquires some products and services from a specific provider. This method needs very tough approval from the team of management just before it is utilised (Lingard, Oswald and Le, 2019). Mainly the construction companies like Kier Group or Keller Group use this method for emergency purposes. If there is only one supplier available, then the companies use this method in their construction. The companies use this for continuing some work that cannot be produced by other suppliers.
This type of procurement method is highly relative to basic procurement conditions and this kind of method fully follows the legal frameworks to make sure all the standards are met and achieve the target of the clients in terms of the quality.
3. Implementation of the innovative approaches to de-risk the constructional works
Three are some innovative procurement approaches to de-risk some construction activities. These approaches are like;
Lump-sum: Lump-sum is also known as the stimulated sum contract and it enables the construction companies to make some contracts related to agreements (Khalafalla and Rueda-Benavides, 2018). These kinds of agreements help the companies to set some prices for the project and in this method, the total price of the project depends on some agreement on a Lump-sum agreement rather than the bidding price of individual teams. The lump-sum contract defines the total price of the project and sometimes it needs some payments in progress stages throughout the project (Khalafalla and Rueda, 2020). For example; Balfour Beatty and Interserve use this method to de-risk the construction works. The construction companies use this method to fully determine the cost of the work and the total fee for the contractors. The construction companies determine the payments in terms of the percentages of work and this kind of innovative approach is used where the scope of the work is clearly defined in the construction work.
Cost reimbursement: costs are the main thing the contractors must pay to fully complete the projects and fulfil the main objectives of the clients. It focuses on many aspects like labour or multiple pieces of equipment or tools and so on (Dixit, 2020). Reimbursement means the contractor gets the money back from the clients after the project is completed. For the reimbursement, both parties need to agree on specific projects to avoid some future misunderstandings. In this contract, the client guarantees to return the money to the contractors and both the parties agree on a specific cost of the project and make a contract according to that (Adewuyi and Ujene, 2019). For example; a famous construction company in England is Amey and the company uses this kind of procurement approach for every project so that the company can avoid future problems related to the projects. The company implements some reimbursement contracts like; Cost plus fixed fee or cost-plus incentive fee or cost-plus award fee for its projects so that the projects get ideal for the quality rather than the costs. However, it can have some limitations like uncertain final costs or less efficient incentives. By applying this the construction companies de-risk, the construction works by having a good budget or creating a good report for the matter.
4. Analysis of the structure of the UK economy related to the procurement methods & supply chain matters
The procurement impacts the economy of the UK as the goods and materials or services purchased from the outside cost a total of 80% of the companies in the country. Direct purchases like production-related purchases and subcontracting impacts the basic income statement of the people of the country (Harland et al., 2019). Indirect purchase like outsourcing or information systems also impacts the country’s economy. Some investments in the income statement of the companies affect the country’s economy in the current times. The basic importance of direct procurement in terms of selling goods or products impacts directly the costs of services and their competitiveness and sales and thus it affects the UK’s economy. Indirect procurement focuses on selling products and multiple goods by improving the efficiency in costs puts a massive impact on the whole competitiveness of the company in the country.
Procurement has a massive impact on the country’s economy as procurement costs build a large part of the total costs of the company (Morledge, Smith and Appiah, 2021). Therefore, the construction companies, for example, Amey or Inetrserve try to fund cheaper or more efficient suppliers to take the advantage of the basic expertise and make the innovation better. Then the improvement of the advantages of the competitors in this industry is likely to increase significantly and that impacts the whole economical structure of the UK.
In the supply chain, the company turns some raw materials into finished products and services for the consumers. It starts with the main focus on raw materials like crops, animals, gold or timbers and so on. The manufacturers turn the raw materials into a finished product by following some simple actions in this method. The first method is a wholesaler who consolidates the products around the globe (Handfield, Graham and Burns, 2020). Then the retailer offers good products to the consumers and after that, the manufacturers sell these products directly to the consumers through their websites or outlets or warehouses. Manufacturing companies decide the main location of the company in terms of the production costs.
For example; some construction companies in the UK like Kier Group or Tramac Trading have lots of outlets in various parts of the country and it has created a very good opportunity for jobs in the country. Due to the pandemic, the whole world suffered. Therefore, the supplies of various construction related products like bricks or timbers which were produced in the country UK in a massive amount. The production slowed a lot and it affected the whole economical structure of the country as the whole process rounds about the economy of the UK.
5. Demonstration of an awareness of the economic role played by the construction industry of civil engineering
In the UK, more than 2.2 million people are connected to the construction sector and the current issue in the migrant labours in the UK went back due to the pandemic and it created an insecure atmosphere and transient environment in the job markets in the UK (Ghaffar, Burman and Braimah, 2020). exclusive construction activities like real estate and non-residential constructions in various commercial and industrial segments and the building of multiple assets faced a massive deficit in the country. The construction of royals or railways or bridges got hammered due to the pandemic in the country.
The construction companies affect the globalisation process and it makes the process more competitive. The globalisation process is concerned with the current economic structure of the country as the increase of the global demands of the infrastructures and the current signification process in the tariff barriers that makes more construction companies fluid. The construction companies mainly focus on various perspectives like civil engineering or manufacturing or house building and so on (Yap, Chow and Shavarebi, 2019). However, in the last 20 years in the UK, there is an intriguing demand for the properties and buildings and some energy efficiency as well. The companies like Keller Group recently recorded that the percentages of homeownership or rural dwellings have increased a lot and it affects the country’s economy. In 2018, the annual growth of close to 23% increases the low carbon requirements and the government demands on the requirements of greener products. For example, some architects or engineers or contractors of Interserve expect that the construction of their company is going to be carbon-free by the end of 2025.
The population of the country is close is slightly aged as the total number of aged people in the country is close to 13 million and it has resulted in the building of some healthcare facilities. Due to the growing increase in the ageing population and the need for the hospital and home care systems has increased a lot in the country (Naoum et al., 2020). Therefore, the construction companies like Interserve or Kier Group have decided to build a workplace of aged people to help the young generation as the youth can be able to learn some new skills from the experienced people and thus it can affect the whole economical structure of the country.
6. Description of how the quality assurance system suits the best constructional practice development
Some specific quality assurance systems help the construction companies to have the best construction development. These systems are like;
Work and material specifications: Work quality is very important as it is one of the main features of the designs and the main importance of the quality is to describe a specific facility the project offers (Pishdad-Bozorgi et al., 2018). For example; construction companies in the UK like Kier Group bulbs plan for the footings or foundations to permit the placing and removal of multiple frameworks and various services to make them work better. Kier group takes care of its excavation and uses some trim bottoms to make the lines and grades have a solid base to make the concrete better and more efficient. Material specifications need some judgements to permit some inspections and various activities. Companies in the UK like Koller Group uses asphalt pavement for the specific composition and it details the needed performance for the company to gain some strengths and permeability for the projects.
Total quality control: Quality control in construction helps the project to be more compliant with the various standard of materials and workmanship to make sure the facility fulfils the design and requirements of the client. Sometimes the work gets rejected as the work does not follow the standards of quality and violates the specifications (Hu, Chong and Wang, 2019). The best known formal approach for quality is ISO 14001 and it helps the companies to have good documentation and deliver some quality goods and modern implementation. For example; the construction companies in the UK follow these ISO 14001 standards in their construction works so that the work does not get rejected and it also helps the companies to decrease the inventory or scrap related costs.
Statistical methods: The construction companies nowadays use some x-rays inspection to maintain the facility of the projects (Harris et al., 2021). Statistical methods are used to maintain the test result on the sample people to have a conclusion so that the acceptability of the works or batches does not get decreased. For example; Interserve had ten defective pieces in its products and the company decided to have a testing method for all the products statistically as the statistical method helps the companies to analyse the total process starting from this sample test.
7. Proposal of some practical measures utilised by the contractors to ensure that the client achieves best project as a best fit and value for money
In construction works, there is a need for some practical measures that help the contractors to have a project that is the best fit and value for money. These measures are such;
Reviewing the project specifications: Project specifications mainly highlight the target and goals of the project. It helps in many aspects like resources or budgets and deadlines and by reviewing a good project scope the company determines whether it has fulfilled the expected targets (Bryde, Unterhitzenberger and Joby, 2018). For example, the construction companies like Morgan Sindall or Keller Group have a project to build a new house for a company. Then their prime objective is to have a proper project report. It helps the companies to determine whether the project is successful or not and whether it has fulfilled the goals of the client.
Budget compliance: One of the main important aspects is to complete the project while staying under the budget. Companies allocate some resources to the project managers for the needed tools and machines (Tripathi and Jha, 2018). Therefore, establishing a budget for a project depends on the wages or basic requirements. The companies need to complete the whole project staying under the budget. Keller group always set a budget plan for its projects and tries to spend staying under the final budget. However, sometimes the companies spend higher than the target budget but stay lower than the stretch budget to maintain the demands of the client.
Quality measurements: It depends on the specific product or project or service upon the time of the delivery or completion. This tests the final project to make sure the quality is maintained (Raidén et al., 2019). The companies in the UK need to have a proper plan to have a good quality measurement. Balfour Beatty, a famous construction company in the UK sets some quality benchmarks like the success rate to fulfil the main criteria of the client. The company also schedules some expectations for their projects or construction works without defects so that the quality gets maintained as always.
8. Conclusion
Procurement is simply a design for the contractors to construct or build a specific project and every activity related to the project involved the services that the company needs to deliver to its clients or consumers. The supply chain refers to the multiple stages where the materials in the construction proceed before the completion of the project. The supply chain satisfied a demand like materials or labour and it is a combining term of multiple resources for a company.
From the above study, it can be concluded that the study focused on the best procurement method for contractual obligations and an innovative approach to de-risk a construction project. Then the study highlighted the structure of the economy of the UK related to the procurement and supply chain and the major role of the construction industry in the current economy in the country. Finally, the study elaborated on the quality assurance systems for the best construction development and some practical approaches to make sure the project is the best fit and maintains the value for its money.
9. References
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Bernstein, L. and Peterson, B., 2022. Managerial contracting: A preliminary study. Available at SSRN 4036051.
Bryde, D., Unterhitzenberger, C. and Joby, R., 2018. Conditions of success for earned value analysis in projects. International Journal of Project Management, 36(3), pp.474-484.
Dixit, V., 2020. Risk assessment of different sourcing contract scenarios in project procurement. International Journal of Construction Management, pp.1-13.
Ghaffar, S.H., Burman, M. and Braimah, N., 2020. Pathways to circular construction: An integrated management of construction and demolition waste for resource recovery. Journal of cleaner production, 244, p.118710.
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Naoum, S.G., Harris, J., Rizzuto, J. and Egbu, C., 2020. Gender in the construction industry: Literature review and comparative survey of men’s and women’s perceptions in UK construction consultancies. Journal of management in engineering, 36(2), p.04019042.
Pishdad-Bozorgi, P., Gao, X., Eastman, C. and Self, A.P., 2018. Planning and developing facility management-enabled building information model (FM-enabled BIM). Automation in Construction, 87, pp.22-38.
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