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Finding Value in Supply Chains

As much as 45% of construction costs are markups on markup accumulated through the supply chain on the way to the Owner of the project.

The following is a simplified map of the supply chain for just two of the dozens of scopes that are typical for a construction project. There are four links in the supply chain between manufacturers and the owner. A conservative estimate of markup for each of those four links is ten percent. These four links represent significant markup on markups, and they amplify inflation.

With the effect of compounding, an item that costs $100 five tiers into the supply chain (manufacturers) costs the Owner $146.41 when sourced traditionally. This is why construction cost escalation is 4x the Canadian inflation rate. Significant cost savings are possible when the project is designed to enable procurement that eliminates markups on markups. And that is what Énska does.

Reducing embodied carbon on your project is a function of supply chain. If the variation of embodied carbon for a given material is 1 to 100, the cost variation is not that. It's more like 1 to 5. That means that there is ample opportunity to find low carbon materials at zero premium cost in the supply chain. Énska maps your supply chains at business case stage to inform subsequent design decisions.

Maximizing social impact on your project is also a function of supply chain. Énska finds diverse-owned subcontractors and suppliers and designs ways in which they can participate in the project at zero premium cost. We also work with labour unions and employers who direct hire to impact at-risk youth with good trades jobs on your project. All of this is possible at zero premium cost.


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