3 Tactics Construction Companies Are Using To Combat Supply Chain Issues

  • Contributors:
  • Ann Plummer
Forklift loads lumber onto truck - part of construction industry supply chain

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 materials shortages have strained supply chains. More recently, a growing number of high-profile cyberattacks have threatened to disrupt supply chains in nearly every industry — including construction.

These heightened risks and uncertainties require high-level, real-time visibility into a construction company’s supply chain — from beginning to end. This is difficult to achieve with simple spreadsheets or paper documentation. That’s why more and more construction businesses are digitizing their supply chains to improve oversight, increase efficiency and manage risk. Here’s how they’re doing it.

1. Automating business processes

Generally, construction companies are automating three key business areas:

  • Procurement
  • Accounts receivable
  • Inventory management

To do so, they’re adopting technology that allows them to 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. It tracks the many parts of a project’s supply chain and often provides a digital platform all parties can use to view the same data.


2. Managing risk with technology investments

Another tool to consider for more in-depth supply chain monitoring 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 of SCRM software include:

  • Contractor/supplier assessments: Create standardized assessments and customize question weights and thresholds based on relevance
  • Risk management: Monitor suppliers and sites, configure risk scores, get critical failure points and track the progress of risk mitigation
  • Mapping: Visualize your supply chain using maps, assess potential vulnerabilities and prioritize supplier workflows
  • Event monitoring: Track events across the supply chain and create “what if” scenario modeling. Users can load sites and points of interest and monitor local impacts via news outlets, social media and regulatory agencies.


3. Hiring supply chain managers

Some construction companies are hiring individuals with education and experience in supply chain management who can address these distinctive challenges. Although investing in new employees and software is costly and requires due diligence, maintaining a strong supply chain is imperative in today’s business environment.


Have questions about improving your supply chain? Let’s talk!