Why You Must Rethink Supply Chains Post COVID-19

Why You Must Rethink Supply Chains Post COVID-19

by Proforma Construction Inc, November 5, 2020

COVID-19 has been more than a health disaster, as it has crushed many businesses due to government-mandated shutdowns. For construction firms to regain momentum, rethinking supply chains for the post-pandemic world is critical.

Here are important steps that builders must take to rethink and implement a smooth recovery in supply chain relationships post COVID-19.

Pandemic Effects on Suppliers

Supply chains connect producers/manufacturers with distributors, wholesalers, and contractors. They can encompass suppliers serving a wide array of independent marketers of services and products. Traditionally, supply chains have been the key to global enterprises that order supplies from all over the world to get the most competitive costs on materials. When shortages for materials occur in a particular country, a builder can make adjustments to buy from an alternate nation where materials are more plentiful and affordable.
However, the 2020 pandemic has interrupted construction projects, causing many contractors to pay higher costs or live with shortages. That’s why rethinking supply chains in the post-pandemic world is vital for survival. When construction companies can’t get the necessary materials on time, it can slow down projects and even cause clients to cancel deals. Every aspect of the supply chain must be evaluated to avoid these disruptions.

Risk Management and Supply Chain Assessment

At the core of rethinking supply chains is the reality of dependencies. Since very few companies of any industry can be considered all-in-one operations, it’s particularly useful for construction firms to consider expanding their lists of potential back-up suppliers. An important point to keep in mind is that many suppliers themselves get their materials from elsewhere. So, part of your evaluation should be to prioritize suppliers who can be considered as the original source of materials.

Relying on suppliers who, in turn, depend on other suppliers creates enormous risks, especially during any economic crisis. So it’s wise to identify which suppliers are most reliable in supplying materials that you need. Understanding mutual dependencies between partners is the key to successful future business planning. An essential step in the evaluation process is prioritizing first-line suppliers, then creating back-up supplier lists.
These types of risk management decisions separate sustainable businesses from those that flounder due to unmet customer expectations. Well-thought-out supply chains are essential for developing a competitive edge.

Creating New Business Relationships

A construction company can collapse like a house of cards if it’s too dependent on a particular supplier of single goods and services. Every supplier should be evaluated for their financial state and quality control department. Assessing how the supplier manages health and safety issues will help build confidence in your forecasts for all future orders.

Part of your business plan should be developing new relationships with back-up suppliers. Maintaining long-term partnerships is healthy for consistency, but you should also work on streamlining your operation to access the most affordable supplies without sacrificing quality. The more active your company is at striving for overall business efficiency, the stronger and more stable it will be in the long run.

Sustainability in the Post-Pandemic World

Digital technology is opening the door for companies to use massive, diverse data for internal streamlining. Your company will emerge as more robust in the post-pandemic world if you invest in the right digital tools for collecting the most relevant data on construction projects. Monitoring a wealth of industry data will help your organization reduce supply chain risks.

Here are other ways to build a path toward sustainability once the pandemic subsides:

● Pre-work inspections to ensure clean conditions
● Anticipate worker questions on management, safety issues, and scheduling, and prepare useful answers for the same
● Develop plans for social distancing among worksite employees
● Keep communication with workers open
● Create guidelines for business continuity

The more you prepare for future uncertainties, the greater your ability to handle unforeseen market changes. Rethinking your supply chains and recovering supply relationships will allow your business to flourish even in the post-pandemic environment.

In search of an experienced construction company in the Bay Area? Contact the experts at Proforma Construction to learn more about how we can resolve all your construction needs.