The effects of inflation on commodity prices and supply chains put added pressure on the construction industry’s procurement strategies, partner Erik Sjödin and coauthors explain. Due in part to external challenges such as limited control over project specifications, construction falls behind other industries—logistics and technology, for example—in procurement best practices.
Image description:
A series of circles show the scores of 8 different industrial sectors on a procurement table, where 1 is low and 5 is high. The 8 sectors are ordered vertically from best performing at the top to worst performing at the bottom. Advanced industries and telecom, media, and high-tech sectors rank highest, and construction ranks lowest. The full data per sector is broken down by percentage-shared segments, split between leaders, middle of the pack, and followers. Each share is represented as a volume circle, with the circle positions where the average score would be for each of the three breakdowns mentioned. Construction, pharma, and medical products shows zero percent in the leaders column.
Source: McKinsey GPE benchmarking database
End of image description.
To read the article, see “The strategic era of procurement in construction,” April 19, 2023.