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Weathering the Storm of Rising Inflation
Supply chains in the construction industry are often complex and difficult to manage. The bigger the project and the more players involved, the longer and more intricate the supply chain.
The COVID-19 pandemic and subsequent material shortages have strained supply chains over the past year or so. More recently, a growing number of high-profile cyberattacks have threatened to disrupt supply chains (at least temporarily) in nearly every industry — including construction.
These heightened risks and uncertainties require high-level, real-time visibility into a company’s supply chain — from beginning to end. This is difficult to achieve with simple spreadsheets or certainly old-fashioned paper documentation. That’s why more and more construction businesses are digitizing their supply chains to improve oversight, increase efficiency and manage risk.
Generally, construction companies are automating three key business areas:
To do so, they’re adopting the technological tools necessary to better communicate and coordinate with all parties along each project’s distinctive supply chain, from the project owner to the designers to the contractor and subs to the actual suppliers.
One such tool is supply chain management (SCM) software. Also known as logistics software, SCM solutions help manage how and when equipment, materials and services are procured. Although more prevalent in other industries, SCM software is making its way into construction, doing the hard work of tracking the many parts of a project’s supply chain and often providing a digital platform that all parties can use to view the same data.
For more in-depth supply chain monitoring, another tool to consider is supply chain risk management (SCRM) software. You can use SCRM solutions to ensure you’re working with vetted suppliers and subcontractors who have the proper insurance, training and qualifications. Typical features include:
On the human side of things, some construction companies are hiring supply chain managers with educational backgrounds and experience focused on the distinctive challenges of this area. Although investing in new employees and software is costly and should be done with great care, maintaining a strong supply chain is imperative in today’s business environment.
Doeren Mayhew’s dedicated Construction Group continues to work closely with construction companies as they navigate through industry challenges. To obtain assistance with analyzing your business processes and exploring digital supply chain options, contact us today.
This publication is distributed for informational purposes only, with the understanding that Doeren Mayhew is not rendering legal, accounting, or other professional opinions on specific facts for matters, and, accordingly, assumes no liability whatsoever in connection with its use. Should the reader have any questions regarding any of the news articles, it is recommended that a Doeren Mayhew representative be contacted.
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