Procurement push and marketing pull in supply chain management: The conceptual contribution of relationship marketing as a driver in project financial performance

The agenda for supply management practices on construction projects originated from clients. It is largely procurement driven, the dominant strategy of contractors being to emulate the client approach, and hence push the procurement model along the chain. This procurement push along the supply chain translates the intrinsic client interest in value into a contractor interest in repeat business from the same client or through referral markets, the consequence being: (i) loss of interest in adding further value along the chain, (ii) continuous improvement prematurely reaches the law of diminishing returns through a primary cost reduction focus, (iii) supply chains may be rationalised in terms of the number of suppliers for each link in the chain, yet the procurement push increases chain length in order to squeeze the lowest costs possible, hence those doing the work at the bottom of the chain will not have the resources to add value nor necessarily be aware of the strategic principles at the top of the chain. Marketing is the other side of the same “procurement coin” relationship marketing (RM) soliciting a pull in the supply chain, potentially adding value for continuous improvement. Finally, the RM approach will be related to the theoretical and actual decoupling point for construction, with the potential to move the point towards the start of the chain, hence increasing the potential for agile manufacturing.