Procurement Director at MAP Engenharia presents procurement strategy for the construction sector – opinion article by Nuno Botelho

It is undeniable that Procurement Departments, by definition, have a duty to promote systematic approaches, with the implementation of policies and processes that help to improve contract margins, allowing for negotiations on a scale of recurring needs, as a result of consolidating the purchasing plans for the various construction projects. In fact, I believe that the strategic decision-making of a department of this size, particularly from the point of view of a construction company, cannot be reduced to the management of paperwork, the purchase of materials and the contracting of services, or even to isolated acts of negotiation. Rather, it should be an integral, structural and functional part of companies, supporting production departments as their preferred internal clients.

Now, during the turbulent period of the last few years in the construction sector, directly motivated by the pandemic crisis and, in the following years, by the war in Ukraine, whose instability also caused constant volatility in the prices of raw materials and, consequently, in production costs, which have never recovered to the levels prior to these events, the challenges have increased in all areas and, in particular, purchasing departments have been put to the test by the need to “think outside the box”, to adapt procedures and concepts.

In this respect, I believe that, although the fluctuations are more limited because they are regulated by the law of supply and demand, they have stabilised upwards and there is a general awareness, which is no longer lost on us, that the great challenge for the future is to define the strategy to meet the current demand, which is central to construction companies and which we hope will continue, whether through private or public investment. It should be emphasised that this demand is linked to a shortage of skilled workers in a wide range of disciplines, which makes it imperative to constantly search for resources and, above all, to implement innovative solutions in order to meet all needs and, in this way, overcome the existing shortage of resources.

In fact, I’m in favour of purchasing departments having a transversal vision of the needs of the various production units. However, since procurement includes supplies, subcontracting and services, it does not act in isolation, but interacts with everyone, and I am pleased that in our company this internal and cultural attitude has served as a strategic foundation for the company’s growth and for transmitting signs of maturity to the market.

It is abundantly clear that we have an obligation to proactively mitigate risk by carefully analysing the supplier market and price fluctuations as a result of uncertainty. We must also monitor compliance with internal procedures and specifications, as a barometer of the requirements of the contract, promoting, with the other departments, the sharing of contacts, joint participation in negotiations, comparative analysis of proposals, compilation of the history of good and bad experiences with the various partners in the various works, supported by a demanding evaluation of suppliers, which allows us to make conscious choices at the time of future contracting, often forcing us to leave our comfort zone. It is also important to emphasise the need to implement innovative, sustainable solutions that are environmentally responsible, economically viable and add value to the end product. This, I believe, leads to the desired satisfaction of our clients and the consequent pleasure for all concerned.

Read the article in Diário Imobiliário