Supply chain strategies for the construction sector

IDEALLY, YOU should be able to weather economic shocks and disruptions, minimise costs, and keep your activities sustainable. Let’s take a look at how this might be done.

Understanding the Current Supply Chain Landscape

In recent times, the construction sector has had to contend with severe logistical disruptions and material shortages, brought about by global pandemics and foreign wars. Many construction firms rely on lengthy and often fragile international supply chains, and are thus vulnerable to delays and price volatility.

Implementing Risk Management and Resilience Planning

To deal with the risks inherent in your supply chain, you’ll need to put in place measures to react to sudden disruptions. You might maintain a buffer stock of certain key items, which will allow your business to keep running, even when the supply is disrupted. You might seek to bring in items from many different suppliers – so that you can cope when one of them is disrupted. Finally, you might put in place contingency plans, so you can react to unexpected events like the COVID-19 pandemic.

Leveraging Technology for Supply Chain Optimisation

In many cases, digital tools can be invaluable in assessing and improving supply chains. For example, Building Information Modelling provides a way of keeping track of all of the materials needed to construct a given building (amongst other things). The right software can then keep track of the assets being brought onto a site, and provide accurate, up-to-date information to relevant stakeholders, wherever those stakeholders might be.

Fostering Collaborative Relationships with Suppliers

Building good relationships with suppliers is critical. When you’re able to talk regularly, you’ll be in a better position to receive information about any future disruptions. This will help you to react better to disruption, and even to outsource some of the functions of your company – like quality control – further up the supply chain. 

This can lead to greater efficiency. If your supplier knows what you’re looking for in a shipment of bricks, for example, they might be able to reject shipments on your behalf, which cuts the cost of shipping for everyone.

Adopting Sustainable and Ethical Procurement Practices

Having a good knowledge of your supply chain will allow you to pick out suppliers that share your values. This can be essential when you’re trying to run your business in a sustainable way. You can pick out suppliers that are certified by reputable bodies, like the Forest Stewardship Council. You could favour local suppliers, to cut down on shipping-driven emissions, or you could look for suppliers in countries with robust labour laws.

Optimising Material Sourcing and Inventory Management

If you don’t have a strategy for procuring materials, warehousing them, and keeping track of your inventory, then waste is inevitable. This goes especially for materials you’re using regularly, like building aggregate. You might also face higher administrative costs, as your stock levels will need to be regularly rechecked. This can lead to delays and overruns that will harm your reputation – and your bottom line.