Tackling Volatility in the Construction Supply Chain

Effective supply chain management lays the foundation for successful construction projects

Supply chain management can make or break a project in the construction industry, where timelines are tight, budgets are constrained, and precision is paramount. It goes without saying that construction supply chains are not immune to the disruptions and complexities that reverberate across global supply chains.

Factors such as increased demand outpacing supply, global shortages of raw materials and manufacturing capacity, and various conflicts occurring in Europe and the Middle East have damaged the construction materials procurement pipeline.

Amidst these challenges lies an opportunity for innovation and resilience through good supply chain management. As project teams navigate the ever-evolving landscape of supply chain integration, the Skyline Construction team has dedicated themselves to finding concrete solutions to mitigate risks, optimize efficiencies, and deliver projects on time and on budget.

5 Keys to successful supply chain management in construction

The following techniques are some of the more effective ways Skyline can improve supply chain management.

1) Local vendors are king

Local vendors allow for improved logistics, reduced shipping time, and greater quality control. Although it might be tempting to work with overseas vendors due to potentially lower prices on building materials, the uncertainty of exactly what you are getting and when you are getting it can lead to supply interruptions that may have dire consequences on project cost.

2) Work with your design team to find cost-saving opportunities

A common theme of our work at Skyline is the idea of “together” (so much so that it’s in our company tagline). When it comes to cost management and waste reduction strategies, working hand-in-hand with the project’s architect can lead to smarter design choices and discovering ways to save time and money.

3) Consistent communication amongst all project stakeholders

Like the above, keeping all of the parties involved – the end user, architect, construction manager, etc. – educated and informed of any issues as early as possible will result in more leeway with the solution- and decision-making process. Experienced project managers use their knowledge of the construction process to anticipate challenges and identify solutions. They work to keep everyone on the same page even through the most complex projects.

4) Don’t neglect MEP

Mechanical, electrical and plumbing costs account for 50% to 60% of a typical tenant improvement budget. Yet, they often get brushed aside due to their “behind-the-scenes” nature when clients want to prioritize luxurious finishes. Although dollars spent on MEP trades might not be seen, they will be felt, and understanding the entry level costs is key to knowing how to disperse the rest of the project budget. It’s important to use high-quality materials for these key components.

5) Pay attention to the existing conditions

Sometimes, what you need is right under your nose. If the building’s existing architecture and/or infrastructure already has most or all the components needed to complete a portion of the project, recycled materials can be a tremendous advantage to reduce costs and keep the project moving forward should there be supply chain issues.

Construction supply chain management can help prevent project failures

Demand forecasting allows construction companies to determine the materials needed and anticipate material shortages. Knowing lead times, supplier data, storage costs, and specifics about the construction site help construction professionals track materials, limit excess inventory, and reduce waste while ensuring material availability.

Of course, our actions are only one half of the equation. The construction projects which have seen the greatest success in easing supply chain challenges are those where the client has taken proactive steps to ensure their schedule is met, resulting in a smooth transition to the first day of business.

4 Tips to improve supply chain management

When it comes to the supply chain, there are steps that you can take to ensure timely project completion.

1) Engage a general contractor early

It is highly advisable to involve a contractor at an early stage of your planning process. Doing so provides them with ample time to offer insights into scheduling considerations and to facilitate the early release of necessary packages. This proactive approach ensures smoother coordination and potentially accelerates the project timeline.

2) Make decisions early

Similar to the above, early action is crucial for project success. Even in the absence of supply chain delays, taking proactive steps to place orders ahead of time can be a highly effective strategy. Demand forecasting mitigates potential delays. Develop contingency plans to accommodate any unforeseen circumstances that may arise during the project.

3) Be open to alternatives

During preconstruction, construction companies aim to avoid frustrating designers by finding comparable products at lower price points. Flexibility during this process is essential. Our goal, as a commercial general contractor, is to maintain the design intent of the space. When necessary, we will offer alternative materials options that align with the project schedule and overall design vision.

4) Be proactive with schedule expectations

While everyone wants the quickest schedule possible to reduce downtime caused by construction, the current market has the potential to throw wrenches into those plans. A little research and planning ahead of time can have a tremendous impact in lessening the severity of project delays. This can lead to significant cost savings once construction workers are on the job site.

Partner with construction professionals with a track record of strong supply chain management

In the construction industry there is no such thing as a “one-size-fits-all” solution; every project has its own unique intricacies. Effective supply chain management is an essential element of successful construction projects, regardless of project scope or complexity. Finding a firm experienced in dealing with these complexities is paramount to ensuring a project that comes in on time and on budget.

Skyline Construction & your successful construction supply chains

The macro scale tips outlined in this article are generally successful in reducing or eliminating the supply chain interruptions. However, they are just the tip of the iceberg.

In order to find the best way to proactively manage construction supply chain processes, the experts at Skyline Construction are always happy to meet with your team to share our knowledge and strategize your project timelines, quality control processes, and waste reduction strategies. All local Skyline offices are equipped with detailed cost and supply chain data that allows us an in-depth evaluation of key project parameters—ensuring we can pursue success together, right from the start.