Nearly all industries have felt the pain of supply chain issues. The construction industry has been dealing with supply chain issues for several years now, posing a continuous challenge to completing projects timely and within budget.
The reason for these supply chain problems is not a singular issue, but a whole laundry list of contributing factors. The COVID-19 pandemic is responsible for many of our current supply chain issues, but there’s more to it than just that.
Major domestic and overseas weather events have placed further strain on supply chain sourcing and fulfillment. Weather is a constant and largely unpredictable threat that can cause sudden inventory shortages and impact the ability to transport products from point A to point B. Winter Storm Uri wreaked havoc in February 2021, shutting down shipments significantly as the widespread storm impacted the United States, Northern Mexico and parts of Canada.
Just a few months later, the Suez Canal, one of the world’s most important trade routes, was obstructed and rendered inoperable for six full days, jolting global markets to the tune of $9.6 billion in daily trade delays. Transport limitations, staffing shortages and embargoes continue causing delays in shipments and materials.
All these factors and more have negatively impacted the construction industry’s supply chain. The industry first started feeling a negative impact with roof membranes, silicones, aluminum and steel. These critical manufacturing materials have seen major delivery delays and shortages for years. Further adding to the frustration, any time there’s a reprieve on one of these items, another issue seemingly rears its ugly head elsewhere. In fact, exterior insulation, roofing membranes, glues and adhesives can still be difficult to acquire today.
The shortage in silicone metal is directly related to the availability of silicones and adhesives. Silicone metal is used in many different products, especially in the fabrication of aluminum. Large volumes of aluminum are utilized in curtain walls and metal panels. As a result of these delays and shortages, there are extremely long lead times and price increases. Price increases for the end user can be 200-300 percent higher than what they were pre-pandemic.
Additionally, supply chains are now experiencing shortages in architectural coatings due to increased demand for polyvinylidene fluoride (PVDF) resin, which comprises 30 percent of paint composition and is generally preferred over other coating options because of its high quality. Although the market will eventually bounce back organically, PVDF is a significant challenge and will likely be in short supply for the foreseeable future.
For a long time, the building enclosure industry has prided itself on its ability to complete projects on time and under budget, which the end user has come to expect as the status quo. However, meeting those standards and expectations are becoming difficult these days due to supply chain issues. That makes it more important than ever to manage client expectations about what a project looks like and what can be reasonably accomplished.
Accordingly, “on time and under budget” will need to adjust to longer lead times and higher prices. That means companies will have to think strategically to compensate for this reality. Here are some best practices IWR North America is using to overcome supply chain issues.
Communication and Transparency
If a project is active, it’s important to receive regular updates from all downstream supply chain parties and effectively communicate pertinent updates to the appropriate project stakeholders. IWR holds team huddles regularly and recommends establishing a meeting cadence suitable for the project team that keeps all aspects on track to completion.
Although not typical, this consistent information sharing is becoming more and more necessary for upstream and downstream partners to efficiently manage their part of the process. So, while certain elements of supply chain disruptions are not within our control, frequent status updates for clients can make a positive difference toward completing projects effectively.
When a job is in the stages of pre-construction or design development, getting good information from vendor partners at the outset and communicating it to the client, is essential. Nothing should be hidden. Get the information and be open and honest about it. Even if it is something the client will not want to hear, the earlier it is shared, the better.
Within the supply chain, there are product manufacturers, end users, and everyone in between. It’s important for all parties to get involved early. The days of getting design documents to 100 percent completion and sending them out to bid for a firm number, are likely over. Instead, it can be beneficial to get a designer on board and develop a design intent. Then work to identify and shortlist some trusted vendor or manufacturing partners to bring on board and establish what is best for the project, based on key objectives.
Understanding the driving factors can allow vendors to find creative solutions. It’s hard for one person to find solutions and requires a collaborative environment early in the project. This means more people from the supply chain should get involved as early as possible. Subcontractors should be in the same room as the owners, architects and consultants. The nature of day-to-day operations, and the many questions they create, make it essential for the experts – manufacturers, fabricators and trade partners – to be present as consultants.
Through this process, a roofing manufacturer may help an architect develop a specification for a product that meets the needs of a certain job. If the job has a hard, end-of-year deadline, sacrifices may need to be made to accomplish the project goals on time. Understanding the job schedule and bringing in the right people who can offer effective solutions is crucial to meeting those objectives. Having these discussions early will also allow for relevant stakeholders to identify key milestones that must be achieved to maintain the schedule.
Trusting Clients and Supply Chain Partners
Even before all these issues, IWR North America has always worked with a select group of supply chain partners. These are trusted partners the company has had a great relationship with for years, in part because of strong, consistent communication.
At the same time, one of IWR’s sales goals is to shrink its customer base. If a company has a few select customers it can trust, and if the trust is mutual, it might be ideal to decrease a customer base amid these unprecedented times. IWR has kept its small customer base informed with good communication throughout the process, so everyone is in lockstep with what’s going on and how it impacts the job.
It is crucial for companies to be responsive and flexible during these times, and that can only happen with trusted partners who communicate with each other. This means being forthcoming and communicating openly with stakeholders. Companies that fail to meet these communications standards risk being left behind by their competition.
Communicating regularly, collaborating early and trusting clients and supply chain partners are all ways to help overcome supply chain issues. While it’s not known how long these issues will affect the construction industry, taking these extra steps can help keep projects on a progressive path toward completion.