Materials prices have risen about 50% within the last year. This has led to even more competitive project bidding. The wins are going to contractors that can guarantee materials will be available when needed.
When the supply shortages became a crisis, some contractors resorted to hoarding, ghost orders, and pop-up warehouses. Warehouse operations are becoming as much a part of the construction industry as hammers and nails.
Ghost orders occur when contractors without projects request bids from several suppliers for materials. This can cause materials shortages for “real” construction projects. Brian Sudduth, president of Miller Construction Company, Florida, said suppliers are pushing back and “asking for project-specific information” to avoid ghost order pile-ups. Some suppliers in the roofing materials industry simply won’t quote a price until you actually place an order.
Lead times are basically a crapshoot. In February 2022, one building professional was surprised to discover bar joists delivery “has pushed into 2023.” What was weeks is now months. Lead-time estimates are:
- Aluminum windows/curtain walls – 6-12 months
- Metal decking – 8-10 months
- Metal studs/cold-formed metal framing – 2-4 months
- Precast concrete wall panels – 6-10 months
- Roofing/roof insulation – 8-10 months
- Steel bar joists – 8-10 months
- Structural steel – 6-8 months
To compound the growing problems of finding materials and suppliers, contractors are having difficulty finding warehouse space. Many resort to building their own temporary storage on project jobsites.
Warehouse operations software provides a fulfillment strategy for construction companies and contractors. Ask your contractor management software provider if a warehouse platform can be integrated to save time and confusion through best-practice management:
- Establish key performance indicators (KPIs) to measure:
- Cost per delivery/mileage
- Loop clients into project supply/materials order fulfillment, and storage/delivery turnaround time
- Offer inventory/materials management
- Set up processes for crowdsourced deliveries
- Bar codes to identify items
- Package/labeling into bins/parcels
- Pick-up staging
Technology in construction business management isn’t a trend. It’s the fuel that empowers the future of construction. If you have questions about what our software deliverables can do for your business development, contact Construction Monitor.