One Construction Company’s Solution to Supply Chain Issues

The Problem

We work with a number of construction (and related) companies. Some of them purchase material directly and have laborers complete the work and others use trade partners (subcontractors). Many clients and friends of ours have experienced incredibly difficult delays with supplies, specifically in the past two years.

And it’s not isolated to construction. There are several industries experiencing supply chain issues. This is a problem in itself, but the problem is compounded when businesses don’t have insight into the supply chain issue.

Let me share a quick example. Tom, owner of TJ Construction, has 5 custom homes waiting to get started. They’re ready to start but for the past two months his masonry contractor has canceled on him several times. This, of course, has frustrated Tom. He needs to get concrete poured so they can stay on schedule. Tom has called Rob (the Masonry company’s COO) several times but to no avail. Rob rarely answers or calls back and when he does he doesn’t have any new info for Tom. Rob keeps blaming it on his suppliers and insinuates that Tom should feel lucky they’re even keeping him as a customer since they’ve had to drop several clients recently. Although Tom has never met Rob, he feels like Rob owes him for the years of business they have given him. Tom has called several other local masonry companies but none of them are accepting new clients at this time.

Tom feels handcuffed because he doesn’t know what’s going on in the masonry industry and it’s hurting his business but it all seems out of his control. He’s losing money and his customers are getting upset but he just keeps reassuring them it will get figured out soon… hoping and praying it actually does.

Situations like this are all too common. The problem is Tom has zero insight into the masonry supply chain. He has never taken the time to build a relationship with Rob so Rob isn’t taking the time to help him. At the end of the day, it wouldn’t be a huge blow to Rob if Tom left. Rob has other clients lining up at the door to work with him.

34% of small businesses do not know how their suppliers are performing. On top of that, only 6% of small businesses have full visibility on their supply chain. This is a major issue. (Deposco)

The Solution

We talk a lot about caring for and serving our customers and employees well. But often times, trade partners and suppliers don’t make it into that conversation. It’s easy to view suppliers as just a means to end...They do their job, they get paid, win-win, both sides are happy. But as business leaders, we have an incredible opportunity here. If we can show them that it’s about more than just making money, and treat them in a way that stands out, we may just build a relationship that helps us avoid costly problems later.

One construction owner we know decided to live out his value of “Relational” by having cookouts at the completion of every project at the job site. He would invite all the trade partners involved, grill up delicious food, give a speech thanking each one of them specifically and spending time talking with them acknowledging their involvement in the project.

This helped him create deeper relationships where it wouldn’t be out of the normal for him to call the trade partner for no other reason than to see how they were doing and ask how he could be praying for them. This of course set him apart from other contractors.

Once Covid hit and supply chain disruptions increased drastically, guess who the first contractor they called was? The trade partners would regularly call him just to give updates on what they’re seeing and what they believed was going to happen. They sent him information on supply limitations, kept him up to date with their capacity, and made sure he was always at the top of the list to receive the work when possible.

This, of course, wasn’t even the business owner’s intention in caring for them the way he did. His intention was to treat them like Jesus would and live out his value of Relational. He didn’t know Covid would hit and all these issues would arise but the byproduct of him investing time into caring for his trade partners resulted in him staying ahead of the problem.

It doesn’t have to be cookouts, but our encouragement to you is to continually think of ways you can build better relationships with your suppliers. The benefit of it may have a tremendous impact on your business one day.