Skanska has become the third major contractor to reveal plans to cut back its supply chain in a bid to cut costs. Chief executive Mike Putnam told NCE that the firm was cutting back on the number of suppliers it uses for commodity purchases but that subcontractors and designers are safe. "We are taking a more co-ordinated approach and using fewer suppliers," he said. "In today's environment, why go buy commodities from lots of people when you can save on transaction costs by buying from fewer?" Skanska's move follows those of Carillion and Balfour Beatty. Carillion is slashing its supplier base from 25,000 to just 5,000 to save £140M a year by 2013. Balfour Beatty is cutting the number of suppliers it works with from 27,000 to 10,000 (News last week).
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