“Simply put, there’s probably no other supply chain that is in more dire need of transformation than the construction industry supply chain.”- Adrian Gonzalez-talkinglogistics.com
Is Today’s Construction Industry Supply Chain Ready to Sustain $79 Trillion in Infrastructure Spending?
According to Steve Cox, VP of Business Development at Command Alkon, “In a study by the Global Infrastructure Hub, global spending on infrastructure over the next 25 years is projected to be $79 trillion, but actual needs are expected to be $94 trillion, creating a $15 trillion gap we need to fill.”
In an article at talkinglogistics.com, Transforming The Construction Materials Supply Chain, Cox discusses the need to digitize and automate the construction materials supply chain in what he calls “a resource-constrained” environment. In the shorter, more immediate term, US infrastructure spending just to 2025 comes in at $4.6 trillion, with just $3.6 trillion actually funded. And this in a country where the American Society of Civil Engineers, (ASCE) has rated U.S. infrastructure with a disturbing D+.
From Document-Driven to Data-Driven Supply Chains
Steve Cox sees digitization of the supply chain as integral to bridging that trillion dollar gap by increasing gains in construction industry productivity. And the way to do that is to get rid of antiquated paper-based roadblocks in the supply chain. Cox says;
“We waste about fifty million work hours a year just keying in data from job site delivery tickets, and that may be low by a factor of two or three.”
As real-world examples for those who may still be on the fence about the ROI of digitization in the construction materials sector, Steve Cox cites several state DOTs where digitizing data brought returns ranging from 200% to 700%. Contractors making the move to digital calibration tools show immediate 3% to 4% savings on trucking and materials costs. Digitization provides unique management advantages such as :
- Real time fleet management to avoid routing delays
- Paperless shipping and receiving
- Efficient use of trucks and drivers
- Up to date inventory status
- Better understanding of actual supply demands
Construction Supply Chains? There’s an App For That
Covid 19 was a major supply chain disruptor but there may be a silver lining to the challenges of 2020. Savvy construction material suppliers learned that a move away from face-to-face service and toward digitization is the wave of the future, and this will be the case with or without covid shutdowns and contact restrictions in 2021 and beyond.
One leading concrete and masonry supplier has already made the move to next generation digital transformation. Chicago’s Elston Materials is embracing mobility by partnering with HokuApps, as a way to keep supply operations running in the no-contact Covid era. The industry-leading construction materials supplier offers a wide range of building materials and ready-mix products via an e-commerce application that provides:
- Ordering from both credit and non-credit customers
- Contactless deliveries with minimal physical interaction
- Efficient deliveries with navigation assistance and driver geo-tracking
- Delivery confirmations with client feedback
Now project managers and contractors have the ability to order directly from the site with their mobile phones for timely materials deliveries. Elston’s all-digital platform also takes record-keeping accuracy to the highest level and eliminating the paper trails from job and load delivery tickets save the staff both time and money in reduced administrative costs.
Digital Collaboration For Quicker, Faster, and Cheaper Supply Chains
While productivity in manufacturing has doubled thanks to digital transformation in industry the construction sector has remained flat, and may even be trending in the wrong direction according to Justin Mannina, business development manager at Command Alkon, a global software innovator. Studies show that the construction industry is lagging far behind when it comes to adapting to change and innovation, leaving the sector with a legacy of problems including:
- Disjointed communications
- Disrupted workflows
- Lack of visibility to delivery information, tracking, and order details
- budget overruns
- labor -intensive manual cost tracking and billing processes.
As construction companies move away from paper to digital blueprints for engineering, digital apps are becoming more and more common at job sites. Slowly but surely, the value of digital collaboration is making itself known in the field, especially when value is uncovered by precise data and analytics. But according to Mannina, the heavy building materials supply chain “still lives in a world of manual processes” involving phones, keying in tickets, and cumbersome paper billing processes.
Even when individual links in the supply chain have digitized, open network collaboration can be complex. That’s because the construction supply chain is an elaborate ecosystem of many suppliers working with many buyers, each with their own apps for project management, accounting techniques, ERP systems, and reporting and analytics. The solution is to digitize and connect all of these various systems in an open platform that lets them work efficiently together.
Electronic transactions can connect contractors, suppliers, haulers and producers to allow them to share data and streamline support to the supply chain for heavy material supplies like aggregate, asphalt, concrete and cement. Intra-company communication and data sharing between all links in the supply chain is the key to finding undiscovered productivity gains that just isn’t possible with paper-based legacy supply chain processes.
About Resource Erectors
At Resource Erectors it’s our mission to keep the human resource supply chain up and running. When your company needs to fill critical vacancies that cost you money each day an essential position goes unfilled, Resource Erectors can recruit and place the top professional candidates. We maintain connections with the industry-leading companies and professionals in engineering, mining, civil construction, minerals and metals, aggregates, concrete, and manufacturing.
We bring decades of specialized industrial human resource experience to the table and over 85% of Resource Erectors’ candidates are still contributing to the success of their companies 5 years later. Whether you’re building your organization’s dream team or you’re ready to make a move up the professional career ladder don’t hesitate to contact Resource Erectors.