13 Supply Chain Visibility Solutions for Common Construction Risks
Part 1: The Power of Visibility
You might have stumbled upon this page to learn more about what supply chain visibility actually is. Or, how it solves a risk you keep experiencing during your construction project. Or simply out of genuine curiosity because you needed to do some lunchtime reading and discovered Matrak online.
Either way, we’re glad you’re here.
Construction has always played a significant role in the world. Without head contractors, suppliers, installers, manufacturers and more, the many innovative buildings we see today simply wouldn’t exist.
In Australia alone, the latest data indicates that 1.18 million Australians are directly employed in the construction industry, which is equivalent to about 1 in 10 jobs across the economy.
What does this mean? It shows just how many hands and materials are passed in the construction industry. Construction is a very large industry, broken up into many small, medium and large businesses.
The teamwork and collaboration between these businesses are what make up a construction supply chain. And when a supply chain is filled with several companies working together, the room for risk and error is highly likely, if not expected, without the right tools and technology.
That’s where the power of supply chain visibility comes in.
In this content series, we’re going to tackle 13 different common construction risks — some you’ll have experienced, others you may have not — and how supply chain visibility is the savvy solution to your problems.
What is supply chain visibility?
Supply chain visibility is when you are able to track the movement of materials from the manufacturer or supplier straight through to installation and completion. Or in layman’s terms — the material’s journey from beginning, middle to end.
Through technology, construction businesses can now obtain real-time data on the movement and progress of a material, whether it’s defected, delayed or lost.
With the power of foresight, you can now get on top of these risks, planning ahead and having a solution already in place before the issues even occur.
Why is supply chain visibility important in construction?
Visibility gives the power back to you and your team. With supply chain visibility and the right planning, common construction risks are either eliminated or at the very least, can be managed and reduced and planned for.
Best of all, your supply chain stays connected, collaborative and organised — reducing common risks.
We’re going to dive deeper into all of this, but as a general overview, supply chain visibility also provides:
- Reduction of disruptive costs in reordering materials or doubling up
- Increase in client satisfaction through enhanced team productivity and communication
- The confidence boost to stay on schedule
Risk #1 – Without supply chain visibility, projects are at risk of delays, lost materials and duplicate deliveries
Without supply chain visibility, you and your team are essentially working based on outdated information, messy communication records and gut instinct.
But risks arise when unforeseen circumstances impact build times and deadlines and communication and data sharing is slow to catch up. Perhaps an important material you need to continue progress hasn’t arrived yet. Or it’s become lost somewhere along the supply chain.
To make amends, the solution would be to reorder the material and pay extra to have it delivered as fast as possible. But then the original material, plus the re-order you made, arrive altogether. You’re then left with material double-ups, excess waste, and an avoidable dent in your construction budget that could have been allocated elsewhere.
Supply chain visibility gives you a live bird’s-eye view into every stage of the supply chain. You have all of the information you need to know right at your fingertips, from material location, quality check information, quantity and whether or not the material is on track to arrive on time.
Issues, whether material delays or otherwise, are bound to happen occasionally along a supply chain in a construction project. Such is the nature of working with several businesses, each with its own practices and processes, on a singular project.
But with supply chain visibility, you’ll know the issue and associated risks before they happen.
By anticipating the risk that’s approaching, you can effectively plan ahead. You’ll be able to clearly communicate the issue to your team and other businesses in the supply chain, shift priorities if needed or coordinate with other subcontractors to commence work on other areas of the building.
The result is a proactive action plan that provides you with less stress, better team management and a build that won’t suffer from risks like severe delays or miscommunication. You have a clear and organised flow that keeps projects aligned to their construction program.
Risk #2 – Without collaborative planning for your construction site logistics, your team is in the dark
To coin the popular phrase, teamwork makes the dream work. In every construction project, planning your construction site logistics is essential for a good build. By logistics, we mean the movement and tracking of materials and equipment, quality assurance practices, timelines, sequences, who does what, when and more.
But to plan effectively, collaboration is paramount. It’s important to work openly with the other construction businesses included in the project, keeping them informed about the site logistics to ensure everyone is on the same page.
Without collaborative planning, your team (and everyone else in the supply chain) are left in the dark. If there is a potential for issues to occur during a build, none of you will know about it. And lack of collaborative planning creates siloed working environments, which leads to other risks and issues resulting in the blame game and miscommunication.
End-to-end supply chain visibility is easily created with the right tools, especially with software that enables real-time communication.
Supply chain tracking technology allows you to seamlessly add your team to a construction project, and be notified of any important changes through push notifications. This eliminates the hassle of having to update everyone manually and individually through other communication methods like email, which is already out-of-date information as soon as it’s sent.
Just like a project needs many different materials to come together to create a solid building, it also requires many different teams to work together seamlessly to put those materials together. One can’t work without the other. Having open lines of communication and technology that provides that visibility is essential for builds to run smoothly without a hitch.
Risk #3 – No single source of truth can create project delays, miscommunication and the blame-game
Being collaborative with different businesses on a single construction project can be difficult, especially when each business has its own way of completing tasks. The key to a successful build is ensuring everyone in the supply chain is on the same page.
If you’re communicating to stakeholders and updating them through communication tools like phone calls, emails or even paper-based messages, there’s a risk not everyone in the supply chain will be kept informed of the updates. An in-person meeting could address this issue, but there’s always a risk not everyone will attend the meeting. Those that were informed will adapt to the changes, while those who weren’t will continue working away.
Eventually, the miscommunication will come to a head, perhaps in the form of incorrect tasks completed, materials delayed, or the wrong trades called to the site. From there, the blame game begins as head contractors will try to find the root of the issue.
You’ll also need to communicate to the client about the delay, which may impact your relationship with them. You may even need to pause construction completely as you try to realign all teams on the project brief and the processes to follow.
Supply chain visibility stops miscommunication before it starts by allowing everyone to refer to a single source of truth.
Without a single source of truth in construction, projects can easily get off track in both time and budget – two important factors that will certainly cause conflict amongst stakeholders if neither are managed properly.
By utilising construction management software that refers to a single source of truth, communicating to all businesses at once becomes even more efficient. Benefits include:
- Significant reduction in mistakes reworks and unforced errors
- Help all teams meet their construction schedules
- Improve communication and enhance the quality of construction
- Creates better decision-making for head contractors and management
- Huge improvement in trust and transparency as a whole
- Reduces additional risks like moving forward with the wrong information
- Builds being completed on time, which creates happy clients and wins you more work
Best of all, referring to a single source of truth allows people to also review the status updates at any point in time, as well as see the most recent update in real-time.
Part 1: Key Takeaway – Supply chain visibility is the future of construction
Supply chain visibility provides construction businesses with many opportunities to mitigate or control risks, whether it be through enhancing your construction site logistics or by creating a single source of truth that prevents miscommunication and the blame game.
By confidently controlling potential risks, your supply chain stays connected, organised and collaborative from project commencement to project completion.
Part 2: Gain More, Lose Less
In Part 1, we unpacked the power of supply chain visibility and how it can prevent common construction risks like project delays, miscommunication, the blame game and more.
Indeed, having visibility over your supply chain empowers you, your team and every business you’re collaborating with, leading to an efficient build that keeps your customers satisfied.
But that’s only scratching the surface.
When done long-term, supply chain visibility helps you gain more, and lose less. It’ll help ensure the operations of your business are consistent, sustainable, environmentally friendly and tech-savvy enough you’ll never need to worry about things like lost documentation or materials ever again.
And of course, gain more work that ultimately grows your business.
In Part 2 of this downloadable series, we’re going to dig deeper into 3 more construction risks that supply chain visibility can address.
Risk #1 – Paper-based inspection test plans (ITPs) and results (ITRs) can be lost, damaged or destroyed on-site
Imagine you’ve completed a section of a brand new building. It’s turned out beautifully, and now the next step is just to assess each area, like the windows and joinery. Every. Single. One.
A hard-copy paper-based Inspection Test Plan (ITP) quickly becomes tedious to work with. Putting pen to paper leaves plenty of room for error, plus it can be a time-consuming task that could be completed quicker with construction supply chain software.
The fact that it’s a physical item also comes with many risks. It could be accidentally thrown in the bin. Misplaced somewhere on a construction site. Gone with the wind, literally.
Indeed, every ITP and ITR contains important information about the construction site and the building progress overall, as well as the materials used and much more. ITPs are especially needed for quality control and assurance, should you ever encounter any legal or compliance issues.
Without it, not only will you be vulnerable to the blame game should projects encounter unexpected hiccups, but you also don’t have a record you can backtrack to investigate issues and address them in a timely, concise and collaborative manner.
In other words, if you’ve lost, damaged or misplaced your ITPs and ITRs, the situation could become a legal compliance issue. You’ll also need to spend time tracking your footsteps from the beginning to get to the root of every issue or risk that occurred during and after your build.
Paper and excel spreadsheets have long been the norm in construction. While the latter does hold merit in the industry, more companies are digitising and automating their ITPs and ITRs in construction projects.
There are a few key reasons for this.
Firstly, digitising ITPs and ITRs ensures it is readily accessible should you need them.
No longer will you need to sift through thousands of papers at a construction site to find the information you need. Most construction management software will allow you to organise these important documents in a way you can understand it, making them even easier to find. These software also archives it for you — you can find ITPs and ITRs on a construction project completed 10 days ago, or 10 years ago.
Secondly, automating your ITPs not only gives time back to you but ensures you capture the right information, every single time.
This protects your work and gives teams peace of mind. If any issues arise further down the line, you have the data that can easily be recalled to avoid penalties or liabilities. It increases the accuracy of your documentation and communication to other stakeholders. Any changes that are made to an ITP sync right away, ensure all stakeholders in the supply chain can view the most up-to-date copy at any given time.
Risk #2 – Increase of lost or defective materials, due to lack of quality control at your construction site
Ensuring the quality of materials falls into two buckets: Quality Control (QC) and Quality Assurance (QA). Quality assurance sets the quality management expectations and how quality will be achieved. Quality control is the plan to achieve it.
We know that materials matter in construction. Without them, the project can’t begin. If the quality control is minimal, there’s a risk for materials to become defective as it moves through the supply chain. The issue becomes bigger when businesses in the supply chain aren’t aware of it, only to realise the problem once it impacts their team and work.
If this occurs, managers will be inclined to act reactively, rather than proactively. Common band-aid solutions could be doing reworks, rescheduling trades, reordering materials, or delaying the project as you try to locate lost materials — all of which eat up valuable time you could be dedicating to actually building.
Supply chain visibility allows for traceability, helping you trigger corrective actions faster than typical word of mouth or emails. This is especially helpful if materials get lost or are defective.
Meanwhile, the visibility improves quality control procedures by helping you update stakeholders in real-time, helping you work together to set up a quality framework for all materials to adhere to so they consistently meet standards across the entire supply chain.
Supply chain visibility keeps quality control practices up to standard in the following ways:
- Mapping out the supply chain – by having a 360 view of the entire supply chain, you’ll know the locations of materials, their level of quality, as well as names of the suppliers and manufacturers
- Data collection – construction management systems collect valuable data, that can then be used for planning proactively ahead of time, and communicating the changes to important stakeholders
- Real-time alerts – if you want to stay on top of quality control updates, construction software can send push notifications whenever an update has occurred. This could be anything from materials being delayed to arriving on time on-site
- Product traceability – The right construction technology can help you track a material’s entire journey along the supply chain, so should an item not meet standards, you can protect your quality of work
Risk #3 – Creating DOWNTIME waste in the construction industry
The construction industry creates 27 million tonnes of waste, according to the national waste report in 2020. That’s 44% of all waste generated throughout the country, and of that waste, 20 million tons end up in landfills every single year. But in construction, waste isn’t confined to just physical rubbish. Waste is anything that doesn’t bring value in the eyes of the customer.
Without the right tools and technology, construction businesses are at risk of creating exponential waste during a build, and not just in materials. The DOWNTIME acronym sums it up perfectly:
- Defects – any process that isn’t correctly implemented the first time, leading to reworks
- Overproduction – too many materials, more than you need to work with
- Waiting – lapses in the workflow when materials and information are delayed or lost
- Not utilizing talent – not utilising the right workers with the right skills for the job
- Transport – excessive movement of materials that causes project delays
- Inventory – stockpiling materials that can cause congestion and contribute to an unsafe work environment
- Motion – excessive movement by teams and subbies
- Excessive processing – executing extra activities that don’t add value to the project and client
Supply chain visibility helps to enable construction’s growing trend – Lean Construction.
Lean is a methodology that focuses on eliminating waste and maximising value. With a 360 complete view of the supply chain, head contractors and managers can identify hidden problems and eliminate them. As a result, you’ll reduce waste, establish more sustainable and environmentally friendly practices and improve overall efficiencies.
Part 2: Key Takeaway – Everyone Wins with Supply Chain Visibility
Knowledge is power. By having visibility into your supply chain, you’ll stay reassured that your business is operating efficiently and effectively. You can access important information on the go and make better decisions backed by detailed data through construction management software.
Visibility empowers you, your team and everyone in the supply chain to work smarter as a team. As a unified front, you’re all in a better position during your respective tasks, enabling open communication that enhances productivity and reliability.
Simply put, everyone wins with supply chain visibility.
Part 3: Taking Back Control
In Part 2, we dived into some of the ways supply chain visibility can empower everyone in the supply chain, from your team to your stakeholders and clients.
In any construction project, the likelihood of risks happening are high. Without the right tools and technology, risks like defective materials, project delays and more can become part and parcel of the job. If you don’t address risks early, eventually, they begin to negatively impact your team’s operations and tasks, as well as your budgets and bottom line.
Supply chain visibility helps you take back control, by giving you insightful data and information that helps you manage the risk as best as possible. You’ll be able to identify, analyse and mitigate the risk before it causes too much damage to your construction project.
Addressing the risk early means you can continue building and meeting your schedules, without the worry of delays due to unforeseen risks happening down the line.
In Part 3 of this downloadable series, we’re going to dig deeper into 3 more construction risks that supply chain visibility can address.
Risk #1 – Making decisions based on out-of-date information
As soon as an email is sent, it’s out of date. What does this mean? In other words, when you send an email, the recipient may not open it until days, weeks or months later. By that point, the important information inside that email would be obsolete and out of date.
When you’re making decisions based on out-of-date information, the entire build itself is affected. Depending on the most up-to-date information, you could unknowingly be working with old materials, the schedule may have been altered or the overall budget could have been reduced. Either way, it opens you up to a variety of other risks that all impact your time, money and quality of work.
Without access to real-time data analytics on your business, you lack the advanced insight toward improved equipment and labour planning requirements. It hinders daily progress evaluations, rapid course corrections, and instant awareness of unexpected cost overflows.
Meanwhile, without the right tools, construction companies are unable to collect, organise, search, analyse, or access current and reliable data effectively. This means you’ll never be able to enhance your process for solving daily or long-term problems.
Construction management software notifies all involved parties about the update, ensuring everyone in the supply chain is working with the most up-to-date information. In doing this, visibility and transparency of information is created.
The result is a unified team between all companies involved in a construction supply chain. It also eliminates the manual slog of other communications like emails, phone calls and word-of-mouth, which can be difficult to maintain especially if you’re working with several businesses at once.
Risk #2 – Delays in your building schedule create more construction costs
Project delays can occur for a range of reasons, from materials being lost to defects being identified during quality control checks. The issue here is that construction schedules are rather definitive, with a certain budget being allocated to cover the time it takes to complete the build.
The more delays you experience, the harder it is to stick to the schedule. In order to mitigate the time lost, managers may need to extend the time it takes to complete the build, which significantly impacts their bottom line.
That said, requesting a ‘variation’ could be a possible solution if unforeseen delays that start impacting your construction costs.
But the risk with requesting a variation is it can be rejected. If this happens, companies can be pushed to their limits financially, to a point where they no longer have the financial means to continue operating.
Supply chain visibility allows you to anticipate delays, so if they are on track to occur, you have enough notice to create a plan that mitigates the risks caused by the delays. You’ll have time to create a recovery plan to get you and your team back on track.
Additionally, construction management software that enables supply chain visibility gives you insight into your costs during the build. You’ll know where every dollar is being spent, and stay confident that you aren’t going over budget.
Risk #3 – Control novated risks within the construction supply chain
Without the right management, novated risks can become more significant than they need to be. Novated risks are the risks passed down the supply chain, eventually making their way to the sub-contractors.
A prime example is when materials go missing as it passes through the chain. Project delays, material reorders and waiting times are examples of novated risks associated with the issue of lost materials.
When novated risks do happen, it’s difficult to stick to the original schedule. And when you don’t stick to the schedule or the contractual terms set by the client, there is often a penalty you need to pay. The result is excessive financial costs for situations you could have otherwise been able to control.
To solve this risk, you need visibility over the entire supply chain so you can identify and control the risk before they completely take your project off course.
If you can control the variables that relate to the oncoming risk in the construction supply chain, then you can control the risk itself. With the right planning, you’ll either be able to eliminate the risk altogether or correct it before it deals any significant damage to the chain.
Construction management software allows the novated risk associated with the supply and delivery of materials to be managed. Due to the visibility, it allows for mitigation and subsequent reduction of exposure to the risk by the subbie.
Part 3: Key Takeaway – Supply Chain Visibility Keeps You in the Driver’s Seat
When you’re dealing with so many moving parts and communicating to multiple stakeholders, risks can happen.
But the key is in how you address the risk when it’s identified. Supply chain visibility gives you the means to mitigate it by providing ample notice of its existence.
With the right information at your fingertips (thanks to the innovation of supply chain management software), you can create a plan early to keep your team on track, while keeping your construction schedule running smoothly without delays.
Risks always have the potential to be disruptive, but with supply chain visibility, you stay in control from the beginning of a project right through to its completion.
Part 4: The Future of Your Construction Business
As the construction industry grows, so does the amount of competition in the field. So the time to adopt construction management software if you haven’t already, was, well, yesterday.
Indeed, the industry is ripe for digital transformations, with many companies utilising technology to streamline and digitise their operations.
Of course, it sounds easier to keep doing what works best for your construction business. Same processes. Same operations. There is comfort in familiarity. But, there’s a risk you’ll be left behind while others are continuing to innovate.
Whereas, the harder path is analysing your business’ infrastructure and analysing what is or isn’t working as well as it should be. The main challenge here would be where even to start, especially if you’re a large enterprise.
The future of your business, or any construction business for that matter, lies in supply chain visibility. What we mean is identifying opportunities and creating long-term growth shouldn’t be overwhelming or difficult — not when you’re using supply chain management software and being supplied with insightful data.
Risk #1 – Not following best sustainability practices in construction
Every construction project requires materials. Though the bigger the building, generally the more materials are required and as such, more packaging and rubbish.
When you’re working with many materials at once, there’s a risk of using too much of the product or having an excess of one material that you later have no other choice but to throw away anyway. This situation is especially likely if you’ve reordered new materials because the original quantity failed to arrive or was unexpectedly delayed.
Doing this can come at a cost to the environment in multiple ways.
Firstly, when you use or require more materials, manufacturers and suppliers need to use more of their original source to make it — just like how you need to cut down trees to make wood.
Secondly, any excess materials can become waste that clogs up landfills. Furthermore, excess materials also create extra movements within the supply chain. For example, additional ships, trucks, crane lifts and more will be required to get the materials to their destination.
Thirdly, more materials and rubbish lead to an increase in CO2 emissions, and a higher carbon footprint overall in the construction industry.
With all of this in mind, it’s important to practice sustainability as much as possible.
Supply chain visibility allows you to see where waste is increasing in the supply chain. From there, you can examine where in the supply chain you can reduce waste. It could be optimising movements happening in the supply chain, the amount of transportation you’re using or even producing only what is needed to complete the build.
In doing all of this, there is strong potential to decrease risks of defects, overproduction, excess inventory and long waiting times.
Through improved planning and with the right digital tools, construction companies can operate sustainably without causing harm to the environment — all with the additional benefits of improved planning, deeper insights and smoother execution made possible via supply chain management software.
When implemented correctly, supply chain management software becomes the key source of support when making important business decisions, such as how to address excess waste in a project’s supply chain, optimising product demand or fixing order fulfilment issues without having to make reorders.
Risk #2 – Remaining stagnant with your construction project management skills and processes
You’ve probably heard the phrase, “don’t fix what isn’t broken”. Indeed, once you’ve found your groove and processes of completing tasks, it’s easy to stay this way because that’s how you’ve always done it.
But this mindset – while valuable – is a double-edged sword. Keeping your skills and processes the way it always is can lead to stagnation, with your construction business falling behind with the times. The construction industry is growing at a rapid rate, so now isn’t the time to be resting on your laurels.
Their importance lies in the fact that once we had universal on-site access to smartphones and tablets, industry-wide productivity levels increased and changed the way the industry builds.
Using a construction management system opens you up to a world of opportunities to enhance your skills and processes.
For example, you can use the data from the software to improve your operational processes. Construction technology has the ability to log transactions and provide your team with analytics that identifies inefficiencies and areas for improvement. This high level of visibility allows you to confidently make your construction planning processes easier.
Some of the things you can learn from material tracking data and supply chain visibility include:
- Which materials have the lowest defect rate versus the highest
- Turnaround times for materials and where they may potentially get lost in the supply chain
- Understand which materials have the lowest defect rate – if the data shows you that a particular powder coating is always going to cost more in on-site defects, then better factor that into your cost upfront than get a nasty surprise
- Know which jobs need additional staffing and which ones don’t by comparing your daily run rate across projects against the due date. If your team was running behind, but they’ve not only caught up but are hitting a rate faster than required, then some of your team can be sent to other sites that might need them more.
Risk #3 – Without construction management software, you could miss opportunities to reduce your operational costs and grow your business
If you’re currently managing your construction business through pen and paper, it’s easy to get caught up in all the little details and administration work. Updating records. Organising archives. Manually communicating to stakeholders through emails and phone calls. Trying to win more work.
While these tasks definitely hold significant value to your business, unfortunately, you run the risk of not having time to deep dive into every aspect of your business. Reflection, analyses and identifying new opportunities to grow your business are some of the best ways to stay up-to-date on current trends in the construction industry.
The vast volume of the construction industry naturally means there is a lot of competition out there. If you’re completing tasks the manual traditional way, without utilising technology, there’s a good chance you’ll fall behind your competitors when it comes to seizing a moment or adopting a new innovation.
The longer you wait, the further behind you’ll be. The earlier you start to implement innovative technology, the quicker you’ll be up and running efficiently.
Construction software gives you insight into every area of your business. The visibility it creates allows you to see trends, measure outcomes, and critically review business transactions using data, and not just relying on feelings or instinct. These valuable insights help you to better understand the numbers that keep your business operating, which in turn improves the business’ bottom line performance.
Meanwhile, construction management software can be a repository for your intellectual property. What this means is that if you use technology to monitor your schedule, materials, labour and more, you can build up a profile filled with data and results so you can then show your capability to potential clients. This depth of knowledge demonstrates your rigour and attention to detail, creating trust and leading to more opportunities to win you more work.
Risk #4 – No way to navigate global payments
More and more construction companies are collaborating with international construction companies to obtain the right materials for their project. While it’s a great example of just how widespread and influential the construction industry is, navigating global payments can become an issue.
If you’re manually doing it yourself, you’ll have to consider factors like currency conversions which constantly change. Not to mention, having a record of everyone’s correct bank details to ensure the money is actually received. Transaction fees, extra charges, handling and conversion costs can all eat away at the profit margin.
And with many projects costing millions of dollars, international transactions are not something you want to do incorrectly.
With supply chain visibility, you’ll know exactly who you are working with. Plus their team members, locations and their role in the construction project.
Most construction management tools offer an integrated payment solution, where all payments can be executed inside the software. The hard yards – like currency conversions – will be automatically converted for you. You can take a step further by building a unified digital ecosystem that integrates with other payment apps to create even more flexibility and options, as well as automate payment cycles if needed.
Part 4: Key Takeaway – Long-term growth starts with supply chain visibility
To prevent the risk of falling behind your competitors, supply chain visibility is the solution to help get you started towards long-term growth.
From identifying ways to reduce your operational costs to enabling global payments for international stakeholders, supply chain visibility gives you in-depth insights to examine your construction business as a whole.
It also prevents you from becoming stagnant in your processes and operations, providing regularly updated information that helps you easily figure out inefficiencies and areas for improvement.
By utilising supply chain management technology and its many features to create long-term growth, you and your business won’t just be joining the pack — you’ll be leading it.
For more information on supply chain visibility and how materials tracking software can help your business, check out our Resources page.
Let’s Chat! See supply chain visibility in action
Matrak is a cloud-based material tracking platform. Our software provides visibility and insights to high-risk and high-value construction items through manufacture, logistics and installation.