Depending on type, nature and sourcing of a project most construction projects go through a linear or concurrent phases of brief, design, procurement, construction and operations. The number of suppliers involved at each phase depends on the contractors' capacity to source them internally but generally in-sourcing only accounts up to 10% of projects' activities; hence around 90% of projects are outsourced from specialist subcontractors and suppliers. In terms of firm-to-firm interactions, the number of project stakeholders involved in a project increase as project design and production information becomes finalised and concrete. Construction stage is probably the busiest stage where many firms are involved for practical completion of the project. It is where many activities are executed on site in a simultaneous and concurrent process. Once the construction stage is over few firms engage with the operations or facilities management of the project. It is also worth to note that due to interdependencies, some supplier engagement may halt at a stage and resume later on when the specific conditions are formed or established. For example, a subcontractor may get involved in the design stage and wait for the project to progress to a certain stage to carry out its activities.
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| Figure:Timeline of supplier involvement in construction projects
In terms of managing the relationships with suppliers, one of the primary tasks of a contractor firm is to identify the key/critical suppliers in the execution of a project. For example, depending on the attributes of the project, the outcome of risk management strategy can give an indication to manage it's relationship with a mechanical subcontractor. Managing the relationship with a subcontractor, in turn, requires identification of interfaces with that subcontractor. Once these key interfaces are determined appropriate relationship management procedures can be applied for the relationship. Just to re-iterate, these interfaces can vary at different project stages, between organisational units/disciplines/teams and processes. Below diagram shows some of the areas of concern for interface management at different project stages. I will write more about this in my future posts..
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