This article is part of a blog series on supply chain issues. The impact of COVID-19 on the supply chain in the construction industry, as well as the war in Ukraine, are still very much felt in 2024. Inflation is high, and the industry is experiencing a lack of resources both in terms of labor and material.
The Dodge economic outlook 2024 predicts the US economy will grow at a slow pace as inflation will decrease. The first six months will be impacted by a possible government shutdown, higher energy prices due to the conflict between Israel and Hamas, and maybe some new union strikes. The good news is that manufacturing construction will continue to grow. Unfortunately, the construction labor shortages could delay the start of various projects, impacting the economic growth of the sector. It may also affect the cost of materials.
You certainly can. All you must do is improve your response times by sending the right information to your suppliers, adjusting the requirements if necessary, and automating the management of your inventory.
In this article, we will explore how to manage and improve your supply chain, and what technologies you should use.
Finch’s sector outlook for North America predicts that in 2024 the disbursement in commercial construction will decline moderately. The report says that growth in residential activity will continue to be slow or slightly lower than in 2023. The report also forecasts that public construction outlay will continue to increase. Overall revenues will be flat in 2024 after decreasing by 0.3% in 2023. Finch expects that margins will rise thanks to the raw material decline and reduced energy costs. Manufacturers of building products and material providers have a good rating from Finch. Unfortunately, labor wages will remain high.
Construction supply chain management, to move construction materials quickly and cost-effectively, requires that you automate and integrate your processes. System integration and best practices implementation could smooth the flow of materials on your construction site, and improve collaboration between all parties within the supply chain, such as manufacturers, suppliers, contractors, owners, etc.
Your projects will then meet the owners’ requirements in terms of delivery and budget, and your project efficiently constructed and maintained.
To manage your supply chain efficiently, bring the construction supply chain processes of your projects into one single management system. To automate your processes, integrate all your systems so they speak to each other seamlessly, and implement best practices to manage your equipment, materials supply, and your various teams. This will make your supply chain efficient and productive. You will be able to deliver projects on time, on budget, and meet the owner’s requirements.
We explore below some ideas you could try to improve your supply chain. Do not let your customers and/or manufacturers down! Apply the following principles to mitigate the risks of a failing supply chain.
To control your inventory, you need to know, in real time, where the goods are when they will be delivered, when they are assembled, and when the handover will happen. There are many tools you can use, like plannerly.
Your systems should provide easy real-time collaboration to access team updates and comments in a live online environment anywhere, anytime.
Advanced online editing must permit you to add images, tables, and videos in your browser. If you embed advanced content from many web-based tools like process maps from draw.io, YouTube training videos, surveys from Typeform, slides from Google, 360 photo walkthroughs from Matterport, and even BIM360 models, it will allow you to clean formatting, helping you to standardize your content across all templates.
Your best practices should include a simple approval workflow, moving sections from work in progress (WIP) to “Shared”, to “Published”. This will allow your team to achieve solid and continual agreement on your projects.
The construction process of an asset uses a wide variety of materials, and many of them are shipped from remote locations. Construction requires a significant input of man-hours, fuel, electricity, and materials with volatile prices that should be closely monitored in the international market.
Another important element is time. In theory, estimators can break the list of materials down to exact quantities of bolts, nuts, and nails. However, this approach is time-consuming, especially in large projects. For example Procore a construction platform, has developed a cost-estimating module critical to the success of 5D BIM which allows you to access the data contained in a 3D model for the take-off process. The system multiplies your estimator’s productivity by an order of magnitude. You could also view and make changes to a project throughout the design phase, generating many changes along the way, comparing changed models to each other, and automatically flowing the cost impacts into revised estimates.
Building real-time data into your workflow across the entire supply channel helps you to visualize demand and supply, classify and associate products by their volatility, and monitor and provide real-time alerts to handle your volatile stock levels.
Planning and forecasting appropriately are fundamental when the supply chain is under pressure as it is now. The supply chain planning system should run 24 hours, 7 days a week to avoid delays in signal processing, identify supply chain issues, and quickly resolve them.
You should consider the design phase of a project as an integrated forecasting system. The planning starts during the design phase and includes future team members of the construction and maintenance. The whole team is looking at various alternatives that are desirable from all points of view, eliminating the necessity of extensive revisions and avoiding clashes.
You should have tools to help you to create BIM contracts using the standard BIM templates, and/or from previous projects. Building ISO 19650 standards and guidance in your workflow designing templates in a software framework will simplify the design process on your projects. Sharing practical tips about each ISO 19650 document type (EIR, AIR, BEP, etc) will help you to walk through steps to create OIRs, PIRs, AIRs, EIRs, BEPs, Responsibility Matrices, RACI Charts, TIDPs, MIDPs.
Using the level of information need approach should describe how to implement the Information Protocol for your BIM contracts by sharing online templates to create your ISO-compliant workflow.
FMI, the leading provider of consulting and investment banking to the Built Environment, said:
Optimizing digital technology is probably just what the construction industry needs. Now in the absence of true face-to-face interactions, these tools have become essential to maintaining schedules and good communication. They have become as ubiquitous as a hammer drill or backhoe on job sites, enabling teams to close distances and utilize time more effectively.
Your management team should set goals to fully implement BIM and make sure that these goals are understood by every team member, planned for, and delivered. Your goals should identify the needs of new technologies to be integrated into your workflows, the data exchange for the enterprise system you should develop, the individual training requirements, the progress of activities and tasks undertaken to achieve the necessary deliverables and milestones related to the client requirements.
In the current climate, your suppliers may have difficulties responding to the high demand with tight deadlines. Your only solution to satisfy your clients is to find alternate suppliers both locally and internationally. You will then be able to disseminate the risk between different suppliers. If you rely too much on offshore suppliers, to keep your prices down, you risk having long lead times and increased delays. To mitigate this risk, you should optimize your ratio of suppliers with short and long lead times, and different price models.
To succeed in a difficult economic environment, you should embrace change and be open to new opportunities. Using integrated systems in the cloud, automating your processes, and introducing new technologies in your workflows like Artificial Intelligence (AI) and cloud platforms will ease your supply chain management.
To be successful you should have a slick and well-managed supply chain. The essential principles you should follow are:
Most firms intend to establish their best practices, but work gets in the way, and they are never created. £220 million is wasted per year in the UK alone. As a result, there are people solving problems that others have already solved.
Driving Vision's BIM expertise diagnostic looks at how you can eliminate waste (time and material) and improve your margins and the quality of the information provided during the design and construction phases.
A Driving Vision expert will conduct the interviews online and will issue a report and discuss our findings with you. Together we will decide the best way to implement the solutions at your pace and according to your budget.
Implementing BIM can be daunting, but Driving Vision is here to help you at the pace you are comfortable with. Get started by getting in touch now
You minimise the level of investment required to implement BIM as we share the Research and Development costs with other client
You increase your revenue by staying ahead of the competition as BIM best practices allows you to win bigger and more rewarding projects.
You reduce your costs, more than our fees cost you, by decreasing potential litigations, rework, and errors and omissions
