We may be living in a post-pandemic world, but we are still feeling the impacts of the last several years. This is especially true when it comes to the supply chain.
A recent survey by Dodge Data & Analytics found that a significant majority of contractors (93%) indicated that their projects had been affected by rising construction costs due to supply chain issues.
Despite these challenges, however, firms can still thrive and stay ahead. The key is to keep up with the latest supply chain trends so you can identify opportunities and action steps for your teams and projects.
To help you do that, this post covers the essentials of managing the supply chain in construction. You will learn the benefits of supply chain management, strategies to improve, and leading technologies in the market today.
Let’s dive in!
What is Construction Supply Chain Management?
Construction supply chain management refers to the processes, systems, and practices used to manage the flow of materials in the construction industry. It also includes managing the relationships between various parties within the supply chain—including manufacturers, suppliers, contractors, owners, and more.
Successful supply chain management moves construction materials quickly and cost-effectively. Goods are delivered on time and within budget, meaning contractors can build and execute projects efficiently.
Strategies to Improve Construction Supply Chain Management
Proper supply chain management, and efficient systems and processes are critical to the success of any project. Here are several tips for doing just that.
Focus on planning with accurate forecasts
Costs tend to fluctuate when the supply chain is tight, so it is essential to plan and forecast appropriately. Pay attention to trends and events, like material price increases and manufacturing disruptions, that may affect the supplies you need and factor those in when planning your budget and forecasts.
It also helps to adopt solutions that make it easy to amend costs and bids. A cloud-based platform enables you and other stakeholders to collaborate in real time, so when prices fluctuate, everyone can see the changes and adjust accordingly.
Choose the right partners
For supply chain management to be successful, multiple parties—including suppliers, contractors, and subcontractors—need to work well together. For this reason, you must select the right construction partners for your project.
Evaluate potential suppliers and partners by looking at the quality of their goods or services, particularly amidst recent supply chain challenges. Ask for references and consider their post-sale terms.
You should also use a supplier management system that enables you to review and track vendor information. Some solutions allow you to input your supplier requirements and standards, so potential vendors or partners can determine if they are a good fit.
Create clear communication processes
Many issues (in construction and life in general) can be resolved or avoided altogether with effective communication practices. That is why you should set up processes to ensure everyone can relay information efficiently.
The specific process will depend on your project and team. You should include the following details:
Status and availability of materials. Pay attention to any goods or supplies you need for the project and where they are in the supply chain. Look at the materials in the pipeline and determine whether everything is on track.
Potential or predicted issues. Instill a forward-thinking mindset in your partners to empower them to foresee potential mishaps. Brainstorm solutions with your vendors and contractors, then produce action steps if things go differently than planned.
Changes in pricing or lead times. You will want to know about price changes and delays sooner rather than later. Make sure these are brought to your attention ASAP, then work with stakeholders to change course when needed.
Tech to try
Intelliwave Technologies’ SiteSense® construction software solution streamlines how users identify and track materials, inventory, and equipment. Plan and track installation packages with insights into material availability constraints and keep project teams updated with dashboards and notifications. These solutions work on both desktop and mobile so teams can manage assets from anywhere.
Invest in the right tools
Technology is not a magic fix for all supply chain issues; however, it can improve efficiency and reduce risk. Cloud-based construction management solutions enable teams to work smarter and have a better handle on all materials needed for a project.
Better insights into supply product information and pricing. Modern construction platforms can connect to suppliers for real-time quotes and pricing data. In a rapidly changing environment, having updated info is critical for putting together accurate budgets, quotes, and bids.
Tech to try
Kojo is a leading materials management software that provides contractors with an all-in-one digital solution to streamline materials management from pre-con to payment. With Kojo, contractors can increase efficiency, save on material costs, and grow margins.
Improve collaboration and communication between teams. Using the right construction solution makes staying connected with your team immensely easier. Stakeholders can collaborate on a single platform, so supply chain updates, issues, and action steps are raised and resolved quickly.
Integrated supply chain workflows. Connected construction solutions enable you to capture data in the field, which can then be synced with other applications—such as your ERP or accounting software. These integrations speed up admin and procurement tasks, saving time and lowering unnecessary costs.
Streamlined payments and billing processes. Connected construction also simplifies payment- and billing-related workflows. For instance, you can enable subcontractors to digitally submit pay applications, then route those requests to project managers for prompt approval. Moreover, modern tools can let you and your subcontractors track payment status updates online, reducing the need for back-and-forth conversations.
Tech to try
If you work in prefab, also check out AlliedBIM. This company offers BIM services and fabrication software to help firms design and assemble models in a way that saves time, labor costs, and material waste. Allied BIM leverages integrations to cut down spooling efforts and track fabrication lead times.
MSUITE is a cloud-based software suite that connects BIM, Fab, and Field Construction Teams and tracks, manages, and shares data for measuring a project’s health. Built for those involved in MEP, EPC, and modular construction, MSUITE increases VDC, shop, and project management visibility into design processes, material status, and shop stats.
Stratus is a construction procurement, manufacturing, and coordination platform. By maximizing the BIM model for prefabrication, STRATUS gives users the ability to create advanced work packages, on demand reporting, and job tracking all within a digital environment. That enables execs, shop floor & field personnel to make data-driven decisions with accurate information, communicate efficiently, reduce waste, and increase productivity.
The Benefits of Better Supply Chain Management
Improving your supply chain processes and systems can take time and money, but it is well worth the investment. Here are some benefits construction companies get when they stay on top of supply chain management.
The right supply chain management tools give you a better handle on project materials and equipment. With solid systems in place, you can easily track where supplies are, when they are delivered, and if they have been installed.
When supply chain data is visible, teams stay organized and make smarter project decisions. If you know when a piece of equipment will be delivered, for example, then you can make staffing and scheduling decisions accordingly.
Being transparent with the above information also adds value to the final stages of a project. Consolidating supply and equipment data is a breeze, thus making handover and operations easier.
Tech to try
If you need to monitor your supply chain network, Geometrid can help. The platform provides visibility and analytics across the supply chain, so you are never left in the dark. Geometrid delivers real-time updates in an interactive BIM environment, making it easy to track building progress, view elements, and access analytics.
Tighter cost control
Increased supply chain visibility also sheds light on areas of waste and improvement. You can quickly see where you are overspending and pinpoint inefficiencies in your processes. This, in turn, frees up cash flow and paves the way for a healthier bottom line.
Tech to try
build.works is a cloud ERP solution for lean offsite construction. It offers a range of tools for BIM-based production planning and execution. From creating quantity takeoffs for Design for Manufacturing & Assembly (DfMA) to crafting a Bill of Materials for your modules/panels, build.works has various capabilities that can help bridge the gap between BIM and supply chain execution.
Win more work
Solid supply chain practices lead to more favorable project outcomes for contractors, vendors, and owners. And when you consistently execute quality projects, you will naturally win more work and grow your business.
Bringing It All Together in Supply Chain Construction Management
Supply chain challenges will not be going away, so investing in systems and practices that improve how you manage supplies, equipment, and teams is more important than ever. We hope this guide gives you ideas for uplevelling supply chain management in your company.
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