A contractor with five live projects places protection orders five times, generally at short notice, generally at rates that reflect urgency. Consolidating into held stock changes that pattern – sometimes for the better, sometimes not. Knowing which requires looking at the whole picture rather than at unit price.
How the arrangement normally works
Stock is held either at the supplier or at the contractor’s own facility, invoiced when drawn rather than when produced. The supplier carries more inventory risk and prices accordingly; the contractor gains availability and usually a better rate than spot buying, particularly where quantities are predictable across the year.
When it genuinely pays
Consignment suits steady, repeated consumption: a contractor running continuous fit-out work with predictable protection requirements across projects. Availability certainty is often worth more than the price benefit – protection that arrives next week is worth little to a job that starts tomorrow.
When it costs more than it saves
Irregular demand, widely varying specifications and long gaps between projects make consignment expensive, because stock ages, capital sits idle and the supplier prices the risk back in. In those cases scheduled call-offs against each project usually work out cheaper even at higher unit rates.
Who owns what, precisely
Get clear terms on damage, obsolescence and shrinkage for stock sitting at your site, and on what happens to anything left at the end of the arrangement. Ambiguity here is normal and expensive; specify it once at contract stage.
Counting discipline is non-negotiable
Drawn-and-paid models fall apart without accurate counts. Every draw needs recording against a cost code, and someone needs reconciling periodically against deliveries. Contractors who skip this end up paying for stock they cannot find – which is the single most common complaint about the model.
Standardisation makes it work
Consignment presupposes a limited range of standard sizes. If each project needs bespoke panel cutting, there is nothing sensible to hold, and the model collapses back into per-job orders. Several contractors use consignment as the forcing mechanism to standardise their protection detail, which is where much of the real saving comes from. We have described the same logic in consolidating specifications.
The reconciliation routine
Reconciliation only works if it is boring and regular: every draw recorded against a cost code at the point it leaves the store, plus a monthly count that reconciles deliveries, draws and remaining stock. Once a month, thirty minutes.
Where the count does not reconcile, investigate immediately rather than at year end. Discrepancies are far easier to trace close to the event, and delaying turns a small administrative gap into a large unexplained number that nobody wants to sign off.
Try it on one region first
Rather than rolling consignment across every project, run it against one region or division for two quarters and measure honestly: availability incidents before and after, effective unit cost, and how much reconciliation effort it took. That data decides whether it scales better than any argument made in a meeting.
Talk to the site teams first
Sites resist centrally controlled stock when it has been arranged without them. A short conversation with the people who will draw against it – about sizes, locations and who authorises draws – does more for whether the arrangement works than any commercial term. The same arrangement for packaging rather than protection board is described in consignment stock for packaging.
What we can do
We can hold protection panels against an agreed schedule and invoice on draw, provided the range is standardised. Send your annual profile and we will say honestly whether the arrangement suits your pattern or whether call-off would cost less.