How Tech Can Solve the Building Supply Crisis for Contractors


The COVID-19 pandemic caused global supply chain disruptions that affected all sectors of society. During the early weeks of the public health crisis, consumers found themselves staring at empty grocery shelves. For months, many restaurants and fast-food chains have had to replace certain options in their menu due to the lack of chickpeas, candy cane beets, ketchup, pumpkins, and to-go cups and containers. There is also an ongoing appliance shortage which major manufacturer Whirlpool said will not end anytime soon.

The construction industry was not spared. Across the world, builders had to pause work and even turn down projects because building materials arrived late.

The housing market has had a great year despite the pandemic. In 2020, due to historic low mortgage rates, many people took out loans to fulfill their dreams of becoming a homeowner. However, due to the limited supply of houses, the cost of buying a house rapidly climbed.

Despite the high demand, the construction could not keep up because of shortages.

What Happened?

A lot of problems in the global supply chain emerged during the pandemic. This is true for all sectors, including the construction industry. The reliance on overseas suppliers meant that, when borders closed, the movement of goods slowed down and even halted. There are also differences in how each nation addressed the pandemic, with most going into lockdowns and imposing restrictions.

Vietnam, for example, had to close factories as the number of infections continued to rise. The Southeast Asian nation, which had the best pandemic response in the world, struggled to contain the more contagious variant of the virus. In an attempt to mitigate the spread of COVID-19, the Vietnamese government imposed stricter restrictions, including the closure of factories.

Moreover, suppliers and manufacturers are not immune to COVID-19. As the virus spread, work became impeded when workers started showing symptoms one by one. Factories, where multiple people from different households interact, became hotspots for outbreaks.

More than 50 ships were stuck in the East China Sea earlier this year. Ningbo-Zhousan, the second busiest port in China, was shut down for over a week after staff members tested positive for COVID-19. This further delayed shipment of different goods, including construction materials.

What are the Results?

These factors all contributed to a global shortage of essential building materials. Builders had to compete to secure stocks of lumber, steel, aluminum, and lighting supplies. Those who were able to find a supplier had to pay premium prices.

The cost of steel and lumber, in particular, has risen steeply. Even when governments intervened by lowering tariffs, the huge demand for building materials could remain sky-high.

Aside from the cost, shortages are causing lags. A survey by the Chamber of Commerce found that almost all contractors (83 percent of respondents) had experienced product delays over the past year due to COVID-19. Around 71 percent also said that they have struggled to meet deadlines.

Unfortunately, the high cost of materials and shortages are making construction projects more expensive. Over half of contractors said that they are making higher bids as a result of the challenges that the industry is currently facing.

Is Technology the Solution?

The construction industry has been slow in adopting new technologies, but there have been improvements over the years. More builders, for example, are using sensors and tracking on heavy equipment for construction to monitor their health and whereabouts.

The challenge of building material supply can be addressed by technology. A digital materials management system can enable smarter and more efficient decision-making. It can provide advice on when and how much supplies to buy, monitor current inventory, and track deliveries.

While humans can do these tasks, technology does it better. They are more accurate because these digital systems collect troves of data and use it to make data-based suggestions.

A material management system maximizes worker productivity by having the right supplies when needed the most. Builders spend so much time waiting for supplies to arrive. Time spent on waiting is better used in performing tasks with the materials that are present.

Moreover, it prevents material wastage. Right now, the industry is reeling with shortages that make materials more expensive. Builders should utilize building materials wisely to cut down on costs.

The construction industry is experiencing delays and drawbacks due to shortages in building materials. Many are postponing projects to accommodate late shipments of essential supplies of lumber, steel, and others. Meanwhile, the demand for houses across the world remains high. Builders can better address the problem of supply with the help of technology.

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