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This paper is based on research being undertaken by the Centre for Strategic Procurement Management (funded by BAA) considering best practice in construction procurement. The primary aim of the study is to establish how supply chains in construction may be managed more efficiently and effectively. This involves the amalgamation of conventional views on industry problems and initiatives for improvement, the theoretical and empirical consideration of supply chain optimisation, the identification of best practices' in the procurement process, and the development of suitable change management strategies to allow organizations to move towards better practice.This paper discusses the limitations behind the current thinking for reforming the UK construction industry, and how Latham's`team' approach will not succeed where clients adopt a`traditional' approach to procuring their construction needs. There is a need to differentiate between`process' and`commodity' spend in construction. It is argued that the benefits of a collaborative approach can only be realized by those clients managing`fitfor-purpose' supply relationships to satisfy their regular process requirements. An approach known as relational competence analysis is suggested as a methodology for helping clients to determine what is`fit for their purpose.