Insights and Advice for Enabling More Efficient and Sustainable Construction

How Connected Data Powers Faster And Smarter Procurement In Construction

November 10, 2021
9 mins read

Estimation To The Next Level

As a highly fragmented and complex industry, construction faces manifold challenges including stagnant productivity, low profit margins, intricate requirements for customized projects and more. One challenge lies in the construction procurement process, as stakeholders are constantly struggling to stay ahead amidst cash flow problems, tight margins, and contract management, all the while ensuring the project’s quality and profitability.

Some of the most common problem areas in construction procurement include:

  • procurement not connected to other aspects of the project
  • procurement avenue selection and supplier management
  • cost and time-related issues, e.x. soaring material price and idling time
  • long procurement cycle and material waste

Are you still transferring your data between systems/spreadsheets?

Procurement, by any standard, plays a sizeable role in all construction projects. As such, project procurement software solutions can help manage the heavy demands from any project. However, like other systems specializing in different jobs being used simultaneously across the organization’s project management, these software tools are usually not integrated with the builder’s main system. As a result, data is dispersed from multiple sources and so time is wasted transferring this data between the different systems.

What does collaboration in construction look like?

MTWO Construction Cloud is an end-to-end construction management platform that helps builders to connect all teams, processes, and data. The procurement process of MTWO helps builders to efficiently manage the procurement process by involving it from the start of each project, helping them overcome specific and common issues that can arise.

Why work alone when you can work together?

Internal teams such as the BIM modeling team, quantity takeoff and estimation team, and the procurement department, to name a few, along with external partners such as project owners, contractors, and developers, are all connected on one cloud platform for a truly integrated end-to-end digital process. One team’s data can be referenced by other teams, enhancing collaboration across the project regardless of location. When it comes to procurement, MTWO can help ensure that all supply-related data is reliable, transparent, and up-to-the-minute accurate.

The MTWO Procurement process covers the complete range of tasks of a fully integrated procurement process for services, materials, and equipment. By fully integrating procurement with 5D BIM and Estimate, it offers seamless process support from the quantity takeoff, requisitioning, request for quotations, quotation evaluation and price comparison, purchase orders or contract creation, delivery ticket, accruals, and invoice reconciliation.

Before we dive into exactly how MTWO can make procurement management easier, let’s look at two examples:

(1) YIT, the largest Finnish developer and construction company with significant influence in north European markets, is using iTWO 4.0 (the core solution of MTWO) in all projects across countries.

With the iTWO 4.0 procurement module, YIT, is able to combine requisitions from different projects into one supply quotation request. Once quotations are replied to, it’s easy to separate them by project, and hassle free to make these lump sum purchases into contracts.

With the portal functionality, YIT can request any pertinent information from their vendors, making digital collaboration between the two parties efficient and making the procurement process more streamlined. With the Business Partner Management module, the information of all the business partners YIT works with, such as vendors and sub-contractors, is stored in one database.

With iTWO 4.0, YIT procurement managers can easily search by procurement quote and easily group all business partners who can provide certain kinds of goods or services.

Read the full story here.

(2) With MTWO, Avintia ensures a smooth supply chain between their prefab factories and project sites

“With this enterprise cloud solution (MTWO Construction Cloud), you ensure the supply chain between your factories and project sites, deadlines are secured, errors are reduced, and maintenance costs are optimized over the life of the building.

MTWO has specific characteristics that allow business partners, such as suppliers, subcontractors, investors and all other parts of the project, to manage their relationships, collaborate with each other and share knowledge and information.”

— Avintia, leading industrial group in the construction and real estate sector in Spain

Watch the video here.

6 ways MTWO can benefit your construction procurement process

1. Automatically generate procurement schedule

Say goodbye to manual creation of procurement schedules on spreadsheets. As an end-to-end platform, MTWO integrates all processes and their data along the building project lifecycle. Based on the pre-defined events and the material list you saved on the platform, MTWO automatically generates a procurement schedule and integrates it into the main construction schedule. With your construction schedule and procurement schedule synchronized in one database and clearly displayed on one Gantt chart, the on-schedule progression of the project becomes much easier, minimizing idle time.

2. Visualize your procurement plan in 3 dimensions at the preconstruction phase

MTWO integrates the 3D BIM model with time factor (4D) and cost information (5D) for the 5D BIM project lifecycle simulation in the preconstruction stage. Procurement requirements can be generated directly from the model, from a catalog, or from a cost estimate. Design models, cost information, procurement and construction plans are visualized and evaluated during the planning phase, so that a clear and optimized plan is created before the physical construction. Not only is data accuracy ensured, but the savings in time and labor can be immense.

3. Comparing on all dimensions to work with the best partner

With the end-to-end MTWO platform, after a requisition is created and approved internally, you can send out the Request for Quote (RfQ) to invite vendors to submit. All quotes will be automatically compared in the Price Comparison module, providing an apples-to-apples approach of evaluating quotes to support your decision-making. Price is evaluated along with the supplier track record as the basis for selecting the best supply partner of materials and services.

4. Comprehensive evaluation of your business partners for improved collaboration

MTWO supports company-wide business partnerships management. The collaboration history such as projects, contracts, and execution performance of every business partner along with all their branches and contact details, and partner networks are stored in one place for critical decision-making. Partner evaluation reports can be created based on customized evaluation criteria for future project reference.

5. Integrated with all the other up- and- downstream processes

Since the construction lifecycle is all connected by the data flow in the MTWO Construction Cloud, data from the procurement process is integrated with all upstream and downstream processes such as estimate, bidding, tendering, and project timeline, truly aligning all departments to work together at greater efficiency.

6. Invoice tracking at an easy yet smart way

In the Invoice module, you can record the invoice documents from all business partners and after reconciliation, this information will be synchronized to your finance system by connecting MTWO with your existing tools, seamlessly connecting building project management and enterprise recourse platform for lean management of your accounts.

Overall, with an end-to-end cloud platform at the helm serving as the digital foundation, builders can benefit greatly from connected master data, streamlined workflows, leaner processes, more productive teams, and better decision making. And for procurement, MTWO can manage both internal operations and working with multiple sub-contractors, achieving greater efficiency and savings, and a higher level of certainty.

At MTWO Construction Cloud, we are committed to keeping your teams, data, and processes connected. Learn more about how MTWO can help with your enterprise projects today! Download the Future-Proof Your Construction Business whitepaper below or sign up for a live demo with our product experts and see how MTWO can help your team build better, faster, and smarter.