Rethinking the Construction Supply Chain

COVID-19 has disrupted the construction industry in significant ways, requiring developers and construction managers to devise new strategies to keep their projects on time and on budget.

One of the main problems affecting job sites today is delays caused by logistics and supply chain issues. The lockdowns and work stoppages at factories serving the industry continue to have a major impact on construction throughout the country, and the effects may linger for years to come.

According to a recent analysis by the Associated General Contractors of America, “an unprecedented leap in the price of goods used in construction and supply-chain disruptions are wreaking hardships on contractors and slowing projects.” These include higher costs for materials such as wood, insulation, natural stone and tiles, along with the continued backlog of appliances and many other items.

Below are nine steps that construction managers and developers can take to help combat these issues, and enable them to continue to be successful in the post-COVID-19 environment:

Create a thorough list

Before a project gets started, create a detailed electronic list of all materials that will need to be purchased including doors, fixtures, lighting, flooring, kitchen supplies and appliances, along with every finish. Based on the construction documents (drawings and specifications), it is possible to come up with an accurate count of each of these items.

The list can be filtered by apartment, floor and room in order to give an exact location of where those items will be used. If the project is done using a Building Information Modeling software, the list can be created directly in the software.

Order materials

Order all needed materials as soon as the design is finalized, possibly months in advance, or for bigger projects even years before they are actually needed at the job site. By ordering and purchasing the items at an earlier stage, it allows developers to lock in the price and avoid unpleasant future surprises and price increases due to supply shortages, or drastic swings of exchange rates if materials are bought overseas.

Logistics manager

Designate and train a logistics manager to oversee all vendor purchase orders, along with the receipt and logging of deliveries at a designated offsite storage location. In addition to enabling more oversight and control of materials on a project, this step allows construction managers to cut out the middleman and reduce subcontractor surcharges that can range from 15 percent to 100 percent of the cost of material.

Map

Recreate a building map using the available architectural drawings, outlining exactly which floor, apartment and room each specific material should be delivered to and when.

Inventory all items 

Upon delivery at the storage facility and before signing off on any orders, the logistics manager needs to inventory each item to ensure the correct quantities were dropped off and everything is in good shape. The logistics manager will then update the master list to show that materials are now stored in the construction manager’s location and ready to be shipped to the site when needed. If items are received broken or incomplete, the vendors will be immediately notified and a new order requested.

Sort the materials

All items at the warehouse should be sorted and subdivided by floor, and then by apartment. After storing all materials for a specific apartment together, a second check must be performed to ensure everything is accounted for and undamaged. When BIM software is used for design and modeling, the material will be also shown in green in the model itself, making it simpler to visually see what is stored and ready to be installed.

Labeling 

Label all boxes and materials with an individual QR code. That way, when pieces are picked up from the warehouse and delivered to the construction site, it is very simple for the team on the ground to know exactly where every piece of material or equipment needs to be sent to.

Joint deliveries

When possible, all materials for each individual task should be delivered together, using an organized and planned out schedule. Every worker involved in the process must be informed in advance to avoid any confusion; for example, that flooring is designated for one floor, drywall for another, and painting materials for a third. This way, instead of having multiple trucks dropping off a few items at a time, there will be less vehicles bringing only exactly what is needed. This results in a smaller number of trucks in circulation, reduced street congestion and the lowering of gas emissions.

Scheduling 

Schedule all deliveries to job sites after regular hours if possible. This allows hoists to be reserved for workers to move easily between floors during the workday, which drastically increases work productivity – at some sites, workers are waiting for the elevator/hoist an average of 30 minutes or more every day. Delivery after hours also allows crews to be more efficient and get in and out quicker.

If the above steps are implemented properly, the project subcontractors will find the materials they need located in the correct areas of the job site at the beginning of every workday.

Rethinking the construction supply chain process in a lean and organized way may seem more expensive, due in part to the initial cost for warehousing materials until they are ready to use. However, maintaining a dedicated logistics team and inexpensive space for storing items will allow developers to save a significant amount of money by avoiding subcontractor surcharges, and most importantly, help avoid delays to the construction timeline and completion of the project.

While it may have been impossible to predict that construction supply chains would be so negatively affected by COVID-19, the tips listed above will help construction managers and developers better prepare for the next crisis to affect the industry, whatever that may be.

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Stefano Braganti is executive vice president of HAP Construction, a full-service construction management company dedicated to building high quality, contemporary projects that are delivered on time and on budget. Braganti is a licensed professional engineer in New York and California, and a licensed construction superintendent in New York City.