Midas turns partnering arrangements into gold

More than half of the œ18 million-a-year spend on materials by Midas, the Devon-based construction group, is now made through partnerships with suppliers.

The biggest single arrangement is with Bradfords Building Supplies, based in Yeovil; annual trading between the two has topped œ1 million for the first time.

Ron King, Midas group purchasing manager, said: "We are seeing lots of benefits by sourcing in this way: price, availability of a quality-assured product and delivery are three advantages.

"There are also savings in manpower. We have just three buyers at Midas, together with a trainee buyer and myself and I'm only buying for 50 per cent of my time. With an œ18 million annual spend on materials, that's a small buying resource.

"We have spent the last five years developing partnerships with key suppliers, building an atmosphere of trust. More than half of what we buy now comes through this route."

King anticipates a further rise to a figure of 75 per cent, but because Midas Construction wins work through competitive tendering, which involves working to specifications set by others, a 100 per cent partnership purchasing scenario is not envisaged.

The partnership system has turned Midas's previous purchasing scenario on its head. "Before, we had a situation where Bradfords would come in with a lightweight block manufacturer, for instance, and they would join forces and sit across the table jointly negotiating against me," said King.

"Now the Bradfords' purchaser sits on the same side of the desk as me and we interview various lightweight block manufacturers in order to pick the one we prefer.

"The dividend of this policy is showing right now, for while lightweight blocks are on allocation elsewhere in the construction industry, our commitment with the maker Durox (part of RMC) means no hiccup in continuity that could cause us problems on site."

Midas has negotiated several other deals in partnership with Bradfords' sales director Mike Tidmarsh: damp proof course and damp proof membrane are both bought from Marley; kerbs, pavings and block paviers come from Camas; with Heritage as the selected manufacturer of architectural ironmongery.

Two further partnerships have been struck directly with manufacturers: RMC Floors of Bristol for floorbeams and Snows Timber for roof trusses.

The range of information exchanged between Midas and Bradfords will soon be extended by the introduction of EDI (electronic data interchange).

"We know each others' margins," said King. "The sea-change is that we, the contractor, accept that material suppliers such as Bradfords must themselves make a margin."