The construction sector spends a lot of money on materials that don’t have a lot of profit. The irony isn’t lost on industry professionals who look at low productivity rates and returns on investment and see numbers that pale compared to other flourishing fields. Strategic construction material procurement strives to make every dollar count through digital transformation, process discovery and additional methodologies so companies can more productively aim for corporate sustainability goals.
Sustainable construction must be more thoughtful since the price of concrete and fossil fuels stand in the way of environmental responsibility and refined budgets. Strategic procurement provides outlines for companies needing tech-forward, environmentally minded business structures.
How Do Procurement and Sustainable Construction Relate?
Construction procurement sometimes accounts for 70% of total spending within a company. Some items come from public sources, demonstrating the importance of spreading environmental messages regarding building projects. However, many CPOs struggle to hone in on a company’s nebulous or nonexistent sustainability strategy, making analysis of their value and supply chains a significant undertaking.
These staggering numbers include more than the materials themselves. There’s also wages for procurement specialists, the time invested in settling supply chain contracts, and transportation and fuel costs to move the materials. How can the sector decarbonize with all that hanging above it?
All construction material procurement practices and related processes impact the planet. However, strategic procurement looks beyond putting a bandage on the problem to healing it entirely. It doesn’t help that everything affects procurement, including not very Earth-friendly events like the war in Ukraine and material scarcity from overextracting resources.
These are some of the worst procurement team mistakes that lead to waste and environmental damage in the construction sector:
- Surplus stock from overordering with no objective
- Investing in new materials but not updated peripherals or tools to handle them
- Downtime or inefficiency causing material pileups
- Long-distance suppliers not meeting deliverables, forcing companies to order double the materials through local sources
- Inconsistent communication with engineers or manufacturers
- Lack of standardization in waste management, tracking and reporting
- Absence of technological tools to keep accurate tabs on stock, waste and efficiency
What’s the Difference With Strategic Procurement?
Strategic sourcing is more big-picture than standard practices. Before, procurement felt isolated and departmental, but the strategic variation involves the whole company and third parties. It highlights how environmental efforts must be collaborative to be sustainable — operationally and for the planet.
Strategic procurement leverages data and prioritizes aligning procurement planning with corporate social responsibility (CSR) and environment, social and governance (ESG) missions. It focuses on these things while streamlining operations and reducing costs, which is a hefty commitment.
The decisions made during procurement impact the entire infrastructure, making it the most influential phase in sustainability strategies. The resources and materials going into the project determine its immediate building impact and ability to withstand time to reduce waste. Strategic procurement phases ensure a circular end-of-life cycle. It achieves sustainable construction by implementing the following:
- Resource risk assessment and secondary materials
- Blueprint practicality in design and timeline
- Thoughtful tender documents and briefs
- Transparent stakeholder engagement
Companies can brainstorm sustainable priorities, like instituting recycling infrastructure or improving material quality with more sustainable alternatives. Still, they must also align with existing directives to achieve these goals if they want the approval of third-party thought leaders — and do so because they want to stay competitive.
There are only a few frameworks, but it can expedite standardization to impact the entire sector. For example, what metrics should companies measure to meet sustainable procurement and construction, and what language should they use to convey these advancements? CPOs and businesses can use procurement to navigate this web of priorities.
How Can Construction Implement These Sustainable Ideas?
The first way to embrace strategic procurement is to analyze suppliers and third-party contracts. Scope 3 emissions, the impact of outside influences related to the company, are the most prominent forces standing in the way between traditional and sustainable construction.
Procurement teams must measure their emissions and environmental impact and work from there. These efforts don’t necessarily connote slimming down on supplier relationships, as supplier diversity is a massive help in resilience and sustainability. It refers to intentional supplier relationships and mutual commitment to sustainable objectives.
Committing to sustainability requires construction companies to hold their partners as accountable as they do themselves, especially if they’re globalizing. Do they have zero-carbon supply bases or renewable energy projects to better the planet? Are they transparent and actionable about these objectives where a continued partnership would still promptly provide reasonably priced projects? These questions surface on top of a construction company’s responsibility to source green materials or convince current partners to adopt them.
Next is to manage trade-offs by instigating discussions with engineers, construction workers and data scientists. It’s time to find ways to streamline designs, maximize data-driven insights and find more sustainable materials. The discourse leads to unraveling how to make sustainable construction more circular and lower-emission. This is done by accenting the importance of cross-departmental and cross-supplier value alignment.
For example, innovations in concrete are making the severely impactful building material potentially one of the most sustainable on the planet. Is viable and strong in comparison to the legacy material? These questions will impact construction material procurement worldwide because trends will forge construction standardization. Insights on operational improvements can’t happen without collaboration with the departments doing the work.
Implementation includes internal policies, automation, software and goals for future sustainable construction projects. This finessing results in a long-term operational shift for companies that goes beyond a one-time experiment in new procurement strategies.
Eventually, construction material procurement will expand its mindset to consider every angle of the sustainability conversation in construction. It will have a hand in making all other environmental side effects less harmful, including:
- Noise pollution
- Habitat destruction
- Water wellness
- Toxic runoff and pollution
- Fossil fuel use
Making Construction Material Procurement More Sustainable
Strategic procurement is the next step companies should take to preserve the environment. Sustainable construction needs consideration from the beginning phases of projects. That means looking at material sourcing, supplier contracts and relationships, and innovation to positively impact the world.
Construction and its materials emit more carbon emissions than the atmosphere can keep up with. Companies must embrace more thoughtful procurement strategies that align with greener goals to bring the industry into a more productive future.
Emily Newton is a technology and industrial journalist. She is also the Editor in Chief of Revolutionized. She has over five years covering stories about warehousing, logistics and distribution.