The supply chain crisis is one of the most prevalent issues in the construction industry. Consultants have predicted that the supply system may not normalize in the next few years, so it’s the contractors’ responsibility to adapt to the new supply chain outlook in construction. As the demand for new buildings increases, so does the demand for construction materials, resulting in project backlogs.
Fortunately, there are strategies that contractors can adopt to mitigate the persistent supply chain problems that face the industry. Identifying the issues and their root causes can help contractors manage supply-related construction issues until the industry finds the balance.
What Are the Common Supply Chain Issues in Construction?
There are many areas where construction companies experience supply chain issues. Some of the major areas are discussed below.
1. Labor Shortage
The most unsurprising shortage of all is the labor shortage. For generations, the industry has been suffering from workforce shortage for many years now, and the surging demand for infrastructure, especially in housing, has left many construction companies incredibly thin.
Moreover, the demand for skilled workers has increased since the young workforce is not attracted to construction.
2. Wood and Lumber Shortages
With the heightened global warming, lumber and wood have become the most challenging supplies in the construction industry even before the onset of the pandemic. Prices have been fluctuating throughout the years, and even when lumber is available, the high prices make estimates high, creating challenging negotiations for construction companies.
3. Concrete Shortages
Concrete shortages are crushing the residential and commercial projects alike. This shortage has been causing major project delays around the globe. Like other industries’ supply chains, concrete manufacturers expect the demand to drop in response to the pandemic and have reduced production accordingly. However, the market has boomed, and manufacturers don’t have the manpower, supply, or production capacity to keep up with the surge of new infrastructures rising everywhere.
4. Shipping Delivery Surge
Many construction companies are suffering from long wait times for their construction supplies to be delivered on-site. Costs, especially for international shipping, are also reaching record highs post-pandemic. The truck drivers shortage in the U.S. also delaying domestic shipping. Even when the requested supplies are in stock, contractors may have to wait weeks or months for orders to arrive, thus causing delays.
5. Computer Chip Shortages
As surprising as it may seem, the computer chip shortage is not only affecting the tech industry – construction is also feeling the shortage. More vehicles, equipment, and tools heavily rely on advanced components such as control systems and sensors. Without it, construction operations and production are left in a dangerous position with a high chance of delay.
What are the Strategies that Can Help Solve the Supply Chain Issues in Construction?
Now, this begs the question: How can contractors solve these issues? The supply chain will certainly reach balance again at some point as the world recovers from the pandemic, but that may not happen in the next few years. Meanwhile, the demand for housing and commercial construction isn’t showing any possibility of slowing down as demand grows even more. Contractors need to adapt to meet the needs of the masses.
Problems and resources vary between companies, but contractors can use some strategies to navigate the current supply chain landscape. These tactics may not fully put an end to supply issues, but they can help limit the possibility of delays, setbacks, and shortages.
1. Consider Pre-Fab Construction
Traditional on-site construction methods have been a cornerstone in the industry due to their established processes and systems that have been solidified through the years. However, delays and price surges brought on by the supply chain crisis have weakened the conventional construction approach. The good news is contractors can significantly reduce building costs and speed up their completion timelines by considering innovative construction techniques, like modular construction.
Prefabricated and modular construction methods have been booming in the industry right now. With this method, building components are mass-produced and assembled offsite, then transported to the building location. Exterior and interior wall panels are produced on an assembly line and skillfully installed at their designated site rather than being built there as we’re used to. This process maximizes the use of building materials by minimizing waste and reducing time. Offsite assembly, especially for prefabricated components, is quick and efficient as it cannot be delayed in inclement weather.
2. Order in Advance, But Not Too Much
Many contractors have started adapting to delivery and supply delays by placing construction materials orders months in advance. More firms are also stocking piles of supplies to avoid delays, and some contractors search local department and hardware stores for supplies to abolish shipping issues from the get-go.
This can look tedious, but planning for one- to six months in advance can save trouble for your company in the long run. This allows construction teams to create more realistic schedules and makes potential delays less likely. These advance orders can also help suppliers plan accordingly and, in turn, could help the entire supply chain catch up down the road.
Industry leaders are discouraging stocking up too much, though. Bulk ordering makes sense when contractors are certain they will consistently need a large quantity of a specific material. However, stocking up on construction supplies just to be prepared for your delays can further congest the supply chain and leave other contractors with expensive storage and shipping costs. Moreover, some materials, like concrete, have a shelf life that could become a quality issue when project delays occur.
You may also consider using a construction scheduling software like Pro Crew Schedule to digitize and streamline your inventory management and tracking processes.
3. Be Transparent with Your Stakeholders
Contractors in today’s construction landscape must be straightforward with their stakeholders about setbacks due to supply chain issues. They need to be truthful about how long a project will take when providing estimates to potential clients, even if it is considerably longer than the client would prefer. Managing construction projects also means managing the expectations of your stakeholders so all can meet eye to eye.
If you have been in the industry for some time, then you know that all construction projects have experienced significant delays in one way or another. However, clients will ultimately be more satisfied when a project is completed on time, even if that timeline is longer than a typical construction timeline. This is especially important in competitive types of construction, like housing.
Offering your clients a realistic project timeline will dodge the need to have challenging conversations in the future when delays do inevitably occur. Without upfront planning, predicting likely obstacles in supply chain delays will more likely become a reality. Contractors may need to improve their planning and communication skills regarding project expectations.
Similarly, it can be beneficial to anticipate materials getting sold when the project is ongoing. Working with clients to pick alternatives ahead of time can also help prevent additional delays.
4. Shift to Sustainable Construction Materials
Sustainable building techniques have become a construction trend over recent years, but they have become more valuable today than ever. Supplies like lumber are expensive and slow to ship, so many contractors are turning to alternative materials and resources. More construction projects are utilizing recycled materials from deconstructed and dilapidated structures.
More U.S. cities are implementing laws requiring infrastructures to be deconstructed rather than demolished so that valuable materials like lumber and concrete bricks can still be reused. For example, Contractors can seek sources of reclaimed building materials even if local laws don’t require it.
5. Strengthen Construction Crew Management
Contractors may want to appeal to nontraditional demographics in the construction workforce to address the pressing labor shortage. Women, young generation, and people of color are all minorities in the industry. Shifting recruiting strategies to connect to these groups could help attract more workers to the industry’s many fulfilling roles.
The construction industry is missing several opportunities to fill the skills gap and the professional shortage. Shifting industry-wide culture to appeal to a more diverse construction workforce could be the key to reviving hiring when the industry needs it most, especially with the high demand for structures.
Who need to fill crucial positions if their teams can utilize research and strategies developed with these programs to learn how to diversify hiring initiatives. Consider offering attractive benefits, pay, and on-the-job training opportunities, which is especially attractive to young people.
The construction industry has faced various types of roadblocks for many decades. Despite this, contractors have persevered and never stopped building new structures so the world can be a better place to live in. The supply chain issues have left the industry working against new delays and setbacks. Still, good construction crew management and innovative strategies can help contractors thrive, even with the unprecedented challenges to come.