Optimising Early-Stage Project Value
Early involvement of engineers and use of digital tools like BIM are not buzzwords. They are proven methods of preventing costly redesigns, delays, and operational headaches.
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Late procurement is easy to blame on market volatility, delayed design or decision paralysis at the top. Many directors convince themselves the delays are inevitable, that everyone else is behind too, or that fast tracking the choices later will catch it all up. In reality, kicking the can on procurement is a management decision that silently raises risk across the whole project.
Why late procurement happens
It is rarely a decision anybody makes out loud. The design is not frozen, so the packages cannot be priced; the packages are not priced, so nobody wants to commit; and the commitment that would have unblocked the design is the one thing being deferred. Each step is defensible on its own and the sequence is ruinous.
1. Cost blowouts and budget erosion
- Loss of negotiating power: suppliers recognise desperation and price accordingly.
- Rush orders and expedited shipping add premiums of 20 to 40% over planned procurement costs, quickly obliterating the original budget.
- Higher risk of error: hasty selections, missing materials and poor substitutions lead to expensive rework and waste.
2. Schedule meltdowns
- Lead time crunches, because even standard items can take weeks or months to deliver, and a last minute order delays every dependent activity.
- Site standstills, with key trades and labourers left idle waiting for materials or equipment, wasting payroll and blowing critical path deadlines.
- Cascading delays, where one late item knocks out an entire sequence and escalates into late handovers, missed revenue and liquidated damages.
3. Loss of supplier trust and quality
- Reduced supplier commitment, as reliable partners deprioritise crisis prone clients in favour of better planned, repeat business.
- Compromised quality, because a team forced to scramble will accept off-spec or lower quality materials just to hit a milestone.
4. Project reputation and stakeholder frustration
- Client frustration: explanations about supply chain chaos do not satisfy a client who has heard it before.
- Team morale: field teams lose trust in leadership and in the programme, which fuels disengagement and turnover.
What the evidence says
According to recent construction market studies, up to 85% of projects experiencing major overruns cite late procurement as a leading cause.
- Rush procurement has, on average, increased overall project costs by 15% and added 8% to schedules over the last two years.
- Major infrastructure and private sector builds have seen direct losses in the millions where strategic packages were not secured on time, resulting in productivity losses and failed milestones.
How to escape the last minute trap
- Set procurement priorities immediately after the design freeze.
- Use digital procurement tracking for early warning on lead times and availability.
- Build in real contingency, while recognising that no reserve offsets systemic procrastination.
- Engage suppliers as strategic partners, bringing them in as soon as specifications exist.
MMC Ireland highlights that reforming procurement policies to prioritise modern methods of construction and accelerating BIM mandates are vital steps for the industry. Early and integrated procurement decisions are what make digital coordination and off site construction possible at all.
Pretending procurement can be back loaded is a shortcut to project disaster. The directors and teams that win in a volatile construction market are the ones who treat procurement as a front line, strategic activity.
Delay may feel easy now, but the price is always higher: in cost, in schedule and in reputation.
Sources (1)
- MMC Ireland, writing in Building Ireland Magazine
