How to Reduce Lead Times in Construction?

Lead time is the time-lapse between initiating a process and its completion. In the construction industry, lead times specifically refer to the amount of time that elapses between the placing, ordering, and delivery of an item or service. 

Reducing lead time helps to wrap projects, secure project payments, and can move on to the next job at a quicker rate. Long lead time increases expenses, disrupted cash flows, and delays the project. 

This article enlists a few strategies to reduce lead time to help contracts take over the areas they have control.

How to Reduce Lead Times in Construction?

1. Communicate Project Forecasts with the Supplier

Contractors need to extend their communication with their suppliers by sharing the timelines of the current project. This would help suppliers know about the upcoming requirement of materials. Hence, the suppliers can stock the materials as per the given workflows by ordering from their manufacturers.

This strategy helps to face the issue of increasing the lead time of material arrangement when the supplier is running out of materials. There are preconstruction platforms that engage suppliers to keep them informed about the required materials during the course of the construction.

2. Buying Local or Domestic Resources

It is better to pay a little extra to purchase domestic materials compared to buying cheap, international sourced materials. International deliveries slow down the timeline. Hence, be sure to select suppliers who source materials domestically and whose manufacturers are domestic.

3. Defining Order Timelines in the Estimate

Before agreeing to purchase orders (PO), make sure that the estimate mentions the desired timeline and expectations. This helps to ensure optimal delivery and ultimately reduces lead times.

This can be achieved by:

• Look for top suppliers in the area
• Look for suppliers with good reputations and reviews

4. Using New Supplier Payment Methods

Missing payments and the slow-paying project can ruin the contractor and supplier relationship. This makes it hard for new procurement and purchases within optimum lead times. This can be resolved by opting for material financing options. 

5. Correct Way of Ordering Items

The impact of lead times on the completion date for a project can be reduced by ordering long lead time items early. This process is called lead-time management. This method may involve the preparation of a long lead schedule.

Read More: Construction Procurement | Procurement Management