Useful strategies for minimizing supply chain management issues

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The supply chain disruptions of 2021 have been well documented. There are daily reminders in our news pointing to the most recent product shortage or price increase. We thought it time for a ground-level view into the issue of construction material supply chain management and some strategies you can use to minimize the impact.

Why is this happening?

The reasons are numerous, but many issues have collided in what already was an extremely tight supply chain. COVID-19-related labor issues in production facilities, port congestion and shipping delays, and material sourcing all contribute.

Additionally, black swan events in the Suez Canal and Texas power degeneration have had surprisingly large ripple effects that are still being worked through. We have previously dealt with challenges in individual trades and material markets, and this cycle is presenting them across virtually every trade and material category. Now, what do we do about it?

Plan early, check often

I know, just “starting earlier” sounds easy but ensure your expectations are realistic. Even pre-pandemic securing of a commercial door could take six to 10 weeks. Many projects were cutting it close or using just-in-time (JIT) delivery strategies.

JIT has some merit, but when the commitments of your upstream suppliers and shippers become unreliable, the need to build slack into material sourcing and delivery becomes greater. Know your critical path and items that are near it (float) and pay closer attention.

Examine sourcing

For years, we have striven to buy American or buy local, but the reality is that components for projects, even construction projects, come from all over the world. Pay close attention to where all the pieces of your materials are produced. If you choose to select ceramic tile commonly sourced from Europe, your risk increases with the components of production, shipping, ports and customs.

A similar product produced in North American may be available in six weeks versus the Italian tile now taking six months to secure.

Customary overseas selection of mechanical, electrical or other complex equipment typically relies on both foreign and domestic components. Stay in close contact with your suppliers and determine if there is an equivalent and more available product.

Always have a Plan B

When learning to drive a car, I was taught to always look for a “way out” — have a Plan B if the lane you are traveling closes in front of you. While generally not the preferred solution, these alternatives get your project open while you get back on track.

Construction Plan Bs commonly involve temporary — temporary doors, generators, driveways or some other workaround. While 100% completion is always the primary goal, temporary measures can sometimes safely allow occupants to move into buildings when the alternative is a late turnover.

When does it end?

Most suppliers have indicated things get worse before they get better. The market is active with shelved and new projects emerging, and a large supply of capital dollars flowing into facility upgrades. We anticipate continued challenges through 2021. Plan early, stay close to your suppliers and keep backup plans updated; we will keep building together.

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