Project case study: Professional sourcing for general contractors – Jansen Building Group
Price has become the key criterion for awarding construction projects. As a result, the companies winning orders are the ones with the sourcing expertise to cost their projects precisely and cost-effectively.
Although the complexity of sourcing activities for all the various parts of the work places great demands on general contractors in particular, the Jansen Building Group demonstrates how these demands can be met.
About Jansen Building Group
Founded after the Second World War as a plastering company without a permanent workforce, the Jansen Group based in Meeuwen in the Belgian province of Limburg is now one of the leading suppliers of interior fitting services in the Benelux countries. A general contractor with more than 500 employees, 500 permanent subcontractors and an annual turnover of around 160 million euros, Jansen offers a portfolio that includes complete shopfitting concepts for chain stores and interior fitting services for major projects such as the European Parliament.
A strategic reorientation brought about by a new generation taking over at the helm has transformed the construction company‘s sourcing organisation. With INVERTO‘s help, Jansen has developed professional sourcing management solutions in typical construction sectors that cover large groups of costs.
Sourcing one-off requirements
One of the major challenges in construction projects lies in complex products or services that are sourced for the first time or on a one-off basis for a new project. One example at Jansen involved sourcing a panorama lift with an abnormally large convex sheet of glass for a project in Brussels.
Jansen only had one quotation and this was way above the price it had quoted the customer. Within two weeks, INVERTO‘s sourcing consultants provided Jansen with the details of new East Asian suppliers for the steel and glass structure and an experienced German subcontractor. It also took charge of all the necessary steps up to installation at the site in Brussels.
As a result, the lift system cost 20 percent less than the initial quotation, processes for sourcing similar items were optimised and a comprehensive database of specialists was established.
Sourcing subcontractor services
The sourcing of subcontractor services represents the Jansen Group‘s largest spend area, accounting for around 60 percent of the total. Jansen used to work with more than 200 different subcontractors and failed to take advantage of the sourcing benefits that could be achieved by spend consolidation.
Following a detailed sourcing market analysis and invitation to tender, Jansen now has framework contracts with a pool of three to five suppliers in each region for each aspect of construction work. In return, these subcontractors cut their prices by more than ten percent.
Thanks to complete transparency in the sourcing market, Jansen has succeeded in walking the tightrope between cost pressure and relationship management in its dealings with suppliers. Only with in-depth knowledge of the companies and products on the market was it possible to know whether a supplier was actually able to cut its prices and what the most effective sourcing levers were.