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Margins in construction are thin. Everyone knows it — and everyone feels it. With such small buffers, even a slight delay or scope gap can dent the bottom line. The shift from The Old Way of spreadsheet schedules, vague scopes, and missed opportunities to The New Way of structured procurement isn't just about better systems. It’s about better outcomes. Procurement has moved from a tick-box function to a performance lever — and smart contractors are using it to drive profit, not just manage cost.
Curious how they do it? Let’s break it down.
Most main contractors operate on margins of 2% to 4%. That leaves little room for mistakes, delays, or scope gaps. One botched package can wipe out months of effort. Profit isn’t just a result — it’s a target. Procurement is where it’s made or lost. A well-run tender process, a clean scope, and a solid contract structure can protect revenue by preventing margin erosion from disputes, rework, or claims.
The upside is real. With the right procurement practices, contractors can see 8% to 12% margin improvements across the supply chain, per McKinsey’s analysis of strategic procurement in construction. These aren’t theoretical numbers. They’re real-world gains, once procurement is treated as a commercial tool rather than a paperwork chore.
Most contractors know their profit is won or lost well before a shovel hits the ground. Procurement is where control starts. Here are seven ways The New Way of procurement lifts margins.
A live procurement schedule shows what’s on track and what’s slipping. It replaces guesswork with clarity.
"Before this, we had no helicopter view — you'd only find out a package was behind when it was already a problem." — commercial manager, tier 2 UK contractor
Real-time visibility lets you see risks before they land. That stops delays from snowballing into lost margin. For more insights on managing these risks, explore our supply chain insights.
Manual admin burns hours and margin. Each moment your team spends chasing dates, updating spreadsheets, or formatting documents is time they don’t spend on strategic procurement.
Cutting manual tasks creates direct savings:
You don’t need extra people — just fewer keystrokes.
A poorly written scope is a margin leak. It leads to inconsistency, variations, and disputes.
Standardised scope libraries fix that:
What you save isn’t just in avoiding errors — it’s in avoiding the argument.
Waiting on sign-off delays procurement. It also exposes you to price hikes, especially in volatile markets.
Quick approvals protect pricing:
The faster you act, the better rates you lock in.
Choosing a subcontractor is more than a race to the lowest price. It’s about risk, track record, and overall value. Comparing quotes without that context leads to poor decisions.
Structured vendor selection helps you:
Strong inputs mean stronger choices. That’s how you firm up margin before work begins. Discover more about buying smarter.
Procurement reports shouldn’t be a scramble. If you’re cutting and pasting data the night before a meeting, you’ve already lost time and clarity.
Structured dashboards fix that:
Forecasting improves when reporting isn’t an afterthought.
Procurement doesn’t sit in a silo. It touches design, delivery, and finance. When teams work in isolation, coordination breaks down and margin vanishes.
Digital collaboration aligns everyone. It makes project data easy to see, tasks easy to track, and decisions easy to finalise.
That compound effect? Less friction. Fewer mistakes. More profit. For more on how digital tools can enhance your procurement process, check out the benefits of construction procurement software.
Contractors rarely lack intent — they lack alignment. Procurement touches too many parts of the business to sit in silos. If schedules, scopes, tenders, vendor records, and contracts live in different tools, consistency slips and margins follow.
The New Way connects it all under one platform. Schedules update in real time. Scope libraries cut repeat work. Tenders, approvals, and contracts move without delays. Vendor data becomes a powerful resource, not something lost in inboxes. Reporting is instant, not dragged together in Excel.
Ready to see how it works? Book a demo and unlock your procurement potential with us today!
James Metcalfe
