Effects of a Preferred Vendor Relationship on an Electrical Component Supplier and an Electrical Contractor: a Case Study

Proven supply chain management techniques hold much promise for the further development of construction as an industry, in terms of gaining efficiencies and streamlining processes. Because construction processes rely so heavily on people working together, examining new ways that participants on a project communicate and form relationships is vital to the advancement of the construction industry. This paper focuses on a case study that explores the effects of a strategic partnership directly observed in practice. This partnership evolved to support an alliance formed between a major owner/client, a general contractor, a mechanical contractor and an electrical contractor. The partnership is a preferred vendor relationship between the electrical contractor and an electrical component supplier. In this sense, the partnership on which the case focuses is one tier removed from the alliance, from a supply chain perspective. The implementation of this strategic partnership involved restructuring the process for procuring non-engineered, commodity type electrical components. This restructuring resulted in marked increases in productivity, reduction of inventory, and in efficiencies gained in material handling.