Consultant says sector vulnerable to its own version of the horse meat scandal
The construction industry could suffer the equivalent of the food industry’s horse meat scandal because of ignorance among firms about their own supply chains, a consultant as claimed.
Supply chain management firm Achilles, whose customers include Costain, Balfour Beatty, Laing O’Rourke and Network Rail, commissioned an independent survey of directors, procurement managers and buyers within 131 large UK businesses boasting over 250 employees.
Achilles said this found that many construction companies – which made up just over 10% of the firms which took part in the survey - do not know who their suppliers’ suppliers are yet remain ‘confident’ about their ability to manage supply chain risks.
Of all industries surveyed, the construction sector was the least confident that its data about suppliers was robust and verifiable, Archilles said.
In total, 60% of construction companies had doubts, or were dissatisfied, about the ability of their supply chain to mitigate against potential risks. And more than half of them were aware of a supplier failing to meet compliance requirements.
However, despite their lack of knowledge, almost all of the companies claimed to be ‘confident’ their supply chain management system allowed them to identify and mitigate risk.
Stephen Marshall, manager of of Achilles’ construction industry supply chain accreditation standard BuildingConfidence, said: “We believe that at present, the construction sector could have its own version of the horse meat scandal.
“This is due to a ‘perfect storm’ of a lack of information about suppliers at Tier 2 and below, twinned with a seemingly misplaced confidence in the information they have about their supply chains.”
Don Ward, chief executive of Constructing Excellence, said: “Flagship programmes such as the Olympics and Crossrail have showcased the UK’s leading capability and expertise in delivering supply chain visibility and assurance – but we must not be complacent.
“Industry should look to continuously improve by routinely investigating and checking exactly who is working on projects, so that risks can be established and mitigated or prevented.”
Achilles’ research was conducted on its behalf by IFF Research.