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Take your partners

Thousands of building products and services will be showcased at Interbuild 2000 at the NEC in Birmingham in May. In the first of a series of previews, we look at Structural Building products, which will be exhibited in Hall 5. First, Paul Donovan asks su

THE NEW, Egan-inspired culture of partnerships is slowly beginning to impact on the working practices of materials suppliers and producers.

Among the more astute there is a dawning realisation that the partnership approach is the only game in town and that, in the long run, the winners will be those who get in early.

Others may accept the inevitablity of the change but are holding back out of a fear of the unknown and an inability to quantify the benefits.

Martin Aldridge, sales director at Sandtoft Roof Tiles, has seen the tiles business change dramatically over the past year as the new partnership culture took hold. Where Sandtoft Roof Tiles had previously dealt mainly with roofing contractors, they now spend far more time talking to major house builders who are pushing for improvement of the supply chain.

'The large builders want to know the cost in the market place and the economic rate up and down the supply chain,' says Mr Aldridge.

Environmental issues are a further concern regularly raised by the house builders.

Mr Aldridge believes the greater exchange of views between different parties involved in the supply chain can only be good news, though he is unsure as to whether there will be cost implications for the industry in the long term. While Sandtoft is beginning to adapt to the supply chain management approach, other companies appear to be further along the learning curve.

At Dow Construction Products (DCP) a system approach has been adopted in order to sell insulation products.

'Instead of selling a component into a building structure, we look at the whole system of walls, roof and floor,' says Patrick Hall, responsible for technical support to the sales team at DCP. 'The system approach means getting involved with other suppliers and contractors and looking to the whole system being put in place.'

Much of the insulation work is situated in the roof of buildings, so DCP has developed its own

preferred network of roof installers and underlay suppliers.

Mr Hall believes much of the impetus for the system approach at DCP has come from the chemicals side of the business, where a partnership approach has been in operation for many years.

'The chemical industry now is where the construction industry wants to be in 10 to 15 years' time,' says Mr Hall.

Michael Ankers, director general of the Construction Products Association, believes partnering has so far mainly centred around contractors and clients, but major suppliers and producers are beginning to appreciate the benefits of the approach.

'The major suppliers are beginning to see the benefits that can accrue from a partnership approach,' he says. 'When partnering results in a genuine relationship between supplier and user then there is a basis to improve and innovate the products being produced.'

For the smaller companies Mr Ankers sees the supply of niche markets as the way forward.

The new age of partnerships is client-driven, he says, with public sector customers playing a particularly influential role: 'There is a changing attitude among clients, with government and local authorities looking for partnering arrangements.'

The director general of the CPA accepts that new methods of working are going to require a change of culture among suppliers and the process of change is likely to be a painful one.

But there is a general inertia towards change among many product manufacturers and suppliers, which is frustrating those firms that would like to see things moving faster.

Ron Edmonson, the managing director of ventilation parts manufacturers Water Air Management, has been trying to get partnering agreements with clients for three years but has only seen real interest develop over the past year.

'It takes a leap of faith to understand the benefits of the partnering approach but it will bring a lot of savings. The removal of compulsory competitive tendering will save 10 per cent in costs off the top,' he says.

Mr Edmonson believes the UK market will move toward the type of arrangements for business that his own company already operates in Holland.

'Some 80 per cent of our business in Holland is done through long-term agreements, with information being kept on a computer system and orders dealt with electronically,' says Mr Edmonson.

He foresees a rationalisation in the UK market, with fewer suppliers being left after a shake-out. The problem at the moment, he says, is convincing other people in the market that they will make substantial savings up and down the supply chain by entering into partnership deals.

There appears to be a growing realisation that partnership is the most cost-effective means for the construction industry overall to proceed, but people want reassurance about the benefits to their own individual businesses, says Mr Edmonson.

Glen Sabin, the contract trading director at paving and block manufac turer, Marshalls, believes a shake-out would bring greater stability, with fewer people involved in the supply chain.

'Those committed to the agenda will have greater stability in terms of pricing but will be driven harder to reduce costs,' says Mr Sabin.

Aco Technology is a company that has been preparing its partnership pitch for some time and has no intention of being left behind. Paul Wagnell, UK business development manager for Aco, believes the race is on to win the lucrative partnerships and avoid being left out in the cold.

He says: 'It will be a race against time, with only a small number of partnerships to be had and the smart people making hay while the sun shines.

'There will be huge changes in the industry and only a small number of materials producers are aware of the depth of the change that will come upon them. It is important to be talking to prospective partners now.'

What is clear is that the way in which material suppliers and producers operate is likely to change radically over the next few years. There seem likely to be fewer and larger players in the long term, and the small and medium-sized operations are only likely to survive if they can carve out a lucrative niche for themselves.