Categories: Thought Leadership
“Build, build, build” and “build back better” were the basis of key rhetoric from the government amidst the turbulence caused by the peak of the COVID-19 pandemic and Brexit, which have both brought varying challenges to the forefront. One such challenge is the current building materials shortage, caused by delays on trade routes and reduced global workforces resulting in shrinking manufacturing capabilities.
Our regional relationship manager for the Midlands, Emma Hesbrook, has been speaking to our ecosystem to better understand their thoughts and feelings about the situation.
To find out more about how the current shortages are impacting our suppliers, she spoke with James Speller, pre-construction director at Speller Metcalfe, and Kieran O’Donoghue, director at Edge Property Solutions. Here’s what they had to say.
How widespread is the materials shortage in the construction sector?
James Speller, pre-construction director at Speller metcalfe said: “The impact of the materials shortage in the construction sector is becoming increasingly apparent. Initially it seemed to be affecting only a handful of specific items and so was relatively manageable, but we are now facing a situation in which critical items like structural steel, timber and façade products are becoming difficult to source. With the knock-on effects of inflated lead times and rapidly rising material prices, indications suggest that this potentially crippling problem is set to get worse before it gets better.
“Where Speller Metcalfe hold projects onsite already it’s a case of tackling the issue on a project-by-project basis. All of our delivery teams are concentrating their efforts on constantly reviewing procurement schedules for materials and subcontractors to make sure that we are prepared to meet the construction programmes. If there are set to be fundamental issues on specific material availability, we will source the next best alternative options for our clients and consultant teams to consider.”
What role do consultants play in this situation?
Kieran O'Donoghue, director at Edge Property Solutions said: “I think consultants play an important role here. They are in a position to increase informal knowledge sharing by understanding client-led demand factors in relation to contractor’s knowledge of supply chain pinch points. By doing this, we can all be in a better position to understand forecasting trends and therefore able to provide advice to one another.
“Clients need to understand the risks caused by material supply volatility and appreciate that they can never fully pass on time risk. The consultants are responsible for passing on this understanding and for giving advice on the options the client has to mitigate this risk, which will possibly include buying out materials needed.”
How can supply chains mitigate the impact of the problem for all involved?
James said: “From the perspective of a construction company, we must now – more than ever before – work with supply chain partners to receive the earliest possible notice of requirements. We must be proactive, pragmatic and collaborative. However, the degree to which we can do this is ultimately determined by our clients. Critically, we need to be involved in projects at the earliest possible stage in order to advise on material availability and to provide our supply chain with the longest possible period to source what is required. We need clients to embrace a flexible approach to specification.
“There is no suggestion that the suitability or quality of a product or design needs to undermined, only that we need organisations to take a realistic and balanced approach, weighing the time constraints we now face as a sector against the drive to finish a project.
“We also need support from central and local government. As key clients for many construction companies, government bodies can lead by example and set a precedent for practices that must be employed to weather the materials shortage storm.
“Ultimately, to overcome this challenge it is paramount that the entire industry remains collaborative.”
How is the situation impacting the future of construction procurement?
Kieran said: “Taking an alternative view of procurement is now required. It’s essential to take a collaborative approach to achieving the clients aims and it may even be necessary to enter into an agreement for early orders of key long lead materials. What this means in practice is supporting the contractor during construction to secure material supplies as early as possible, which might also mean taking a lenient approach to unfixed materials on site or making additional storage space available.”
Clearly, the notion of collaboration is being echoed throughout the construction industry at the moment. At Pagabo our craft has always been collaboration, and this is more important than ever during times of uncertainty for our clients. We strive to educate, inform, and enable outcome best suited to our clients.
The crucial thing that procuring projects via our frameworks will enable is market engagement at the earliest opportunity, which is highly advisable considering the advice from contractors and consultants. We provide businesses a compliant route to start having conversations with contractors about key risks to their projects before procurement is considered. This enables a more informed strategy and consequently goes a long way in ensuring project deliverables are achieved, during a materials shortage or not.