Stone Market Procurement Intelligence Report

The market for Construction Supplies and its sub-segments such as Stone are at an interesting intersection. 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.

The growing need for smarter and resilient construction has encouraged a rapid implementation of advanced BIM solutions. The integration of 4D BIM and geographical information system (GIS) is helping in improving construction productivity, construction supply chain management, material supplier selection, estimation of deliveries, and overall coordination between construction companies and material suppliers.

Suppliers across the value chain are increasing their investments in technologies and incorporating systems integrated with IoT, AI, Big data, and data analytics to generate efficiencies and better serve the evolving demand patterns of buyers. This is expected to impact the cost structure of suppliers in the short-term but will help bring down the costs in longer run as suppliers recover the costs of current investment cycles.

Trends like these and many others discussed in this report are necessitating a relook at the way Stone is procured and the procurement cost saving opportunities that exist.

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 Stone procurement insights and hand picks best practices that can work for category managers delving in this market.

For example, Buyers should prefer working with suppliers who can bring in specialized solutions for their specific industries to ensure comprehensive delivery of construction related services to buyers.

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.

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