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Construction Supply Chain Disruptions and Solutions

In the wake of the COVID-19 pandemic and amid global geopolitical conflict, supply-chain disruptions are impacting nearly every industry—and construction is no exception. The result for contractors is higher material prices—think 20% higher year-over-year—and supply delays, just to name a few, but technology can help in more ways than one.

On the commercial side of the business, the AGC (Associated General Contractors of America) says prices of construction materials used in new nonresidential construction jumped more than 21% from February 2021 to February 2022 and noted price announcements made after the February data was collected suggest contractors are experiencing even more cost pressures this month. To address the soaring prices, the AGC suggests new efforts can ease supply-chain backups and public officials can allow change orders to reflect the rapid escalation in material prices.

Meanwhile, on the residential side, the NAHB (National Assn. of Home Builders) says homebuilding material costs are up 20% year-over-year, and the price of framing lumber has more than tripled while oriented strand board prices have doubled. To address this, the NAHB has called on the Biden Administration to increase domestic production of timber from federal lands and to work with Canada on a new softwood lumber agreement that will eliminate tariffs.

While the government can certainly play a role in addressing supply-chain issues, contractors can also leverage technology to anticipate and avert delays or budget overruns. Consider the recent example from InEight, which announced its quarterly innovations update. In it, the company announced automated EVM (earned value management) metrics to accurately track project progress; realtime data to improve oversight across project lifecycles; and accurate predictive scheduling.

These metrics will help accurately track realtime progress across two core project constraints—cost and schedule—which will help support transparent and agile construction amid supply chain disruptions and skills shortages.

InEight has also partnered with Felix Group Holdings, which provides a cloud-based enterprise SaaS (software-as-a-service) procurement management platform and vendor marketplace, enhancing project-management capabilities for project owners and contractors across planning, construction, and turnover phases. Felix’s platform adds comprehensive procurement and vendor management capabilities to InEight’s project controls platform, which gives stakeholders a deeper understanding of the supply chain by leveraging realtime vendor insights during the estimating process.

This is simply one example of how technology can help address supply chain disruptions. One thing is for certain: these disruptions will continue to happen. In many ways, the supply chain is broken, and it will not be fixed overnight. Yes, addressing tariffs or calling on the government to address supply chain backups will help. However, the only way construction companies can gain more control of their operations is by leveraging realtime data and having a better understanding of time and cost on projects.

Perhaps it is time for your company to consider how it is leveraging technology to gain a better understanding of a project. Now is the time.

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