Mastics Market Procurement Intelligence Report

A changing ecosystem within the Construction Supplies market also affects the procurement process, cost dynamics and supplier attractiveness for the buyers of Mastics. Periods of macroeconomic uncertainty and increasing stringency of immigration laws are key contributors to the workforce shortage in the market. Domestic workers in developed countries often choose to pursue higher education and less cyclical employment opportunities while foreign workers return to their home countries due to tough immigration laws and economic conditions. Consequently, suppliers have had to increase labor wages to attract skilled and unskilled labor, which has increased their costs and forced them to increase their pricing.

Construction activities and manufacturing of construction supplies are known to be a large source of emissions across the world. Regulatory and social pressures to keep emissions in check have transformed the way construction industry operates. Sustainable practices have penetrated the traditional business processes. There is an increasing demand for green buildings, low carbon concretes and other low emission construction aggregates and renewable energy solutions. All these factors are contributing to a significant change in the procurement standards and practices within the category.

Over the years, regional boundaries have blurred as suppliers foray into different continents, increase their capital expenditure and spend on cross-border M&A initiatives. The deployment of geographic diversification strategies through such consolidation initiatives has enabled the large suppliers to improve their performance and expand their business footprint.

Sometimes, procurement functions are unable to timely alter their practices while responding to market conditions. Industry experts acknowledge that periodically reviewing procurement best practices and adopting learnings from across procurement categories can help procurement teams respond to market needs in a more agile way. This report combines our experience of other categories with Mastics procurement insights and hand picks best practices that can work for category managers delving in this market.

For example, Buyers must have a clear understanding of the sub-contracting policies of suppliers. Suppliers must be evaluated on factors such as price, quality, and regulatory compliance of their subcontractors before they are selected.

It is highly recommended that buyers prioritize regional suppliers unless the project specifications are extremely sophisticated and require specialized vendors. A regional supplier base enables buyers to have significant negotiation power due to spend consolidation and exhaustive knowledge of the local codes and environmental regulations. It also insulates them from adverse fluctuations in currency exchange rates.

Service providers may outsource certain aspects of the project if they lack the required expertise or to expedite the project progress. If the subcontractor is not covered by a reliable liability insurance or does not abide by the same terms and conditions that were laid down for the main contractors, then it can hinder the main contractor's ability to perform its services. It may also entangle the buyers in legal complications and negative publicity.

Mastics procurement managers also need to proactively identify and mitigate potential risks that can arise in the supply chain or contracts for Mastics procurement. Some examples include: