Disruption Sends Shockwaves Through Construction Industry

A global pandemic, strained foreign trade relations and now a hot property market have sent shockwaves through construction industry supply chains, exposing a vulnerability to risk of disruption for contractors and developers.

While construction, infrastructure and property are booming as the economy recovers from Covid-19, fractured supply chains are yet to bounce back completely—and the impacts are keeping many executives awake at night, says Construction Industry Solutions (COINS) business development manager Tim Hird.

In a highly competitive industry, many contractors are contending with labour shortages, a lack of supplies and increased costs due to alternative procurement sources, often resulting in burdensome delays. For developers, the flow-on effects are impacting the feasibility of projects.

Companies are being forced to go back to the drawing board at the design level and innovate based on material availability and affordability, and to compensate for escalating costs.

Further, there is a lot more pressure on the sales cycle, with developers having to closely track opportunities to sell in a market with lower margins.

“While opportunities are plentiful this year, unprecedented market volatility in 2020 is continuing to unravel the fragility of under-managed supply chains,” Hird said.

“We are continuing to see a ripple effect across cash flow and increased commercial control needs to manage and administer contracts.

“The viability of many projects is then put into question, forcing executives to look at different operating models and ways of securing funding.

“Many organisations are realising the need for diversification—certainly geographically from cities to regional areas is a hot topic.

“However, many tier 2 and 3 companies are simply not set up to manage large structural changes, and that leaves them incredibly exposed.”

COINS’ principal solution architect Wayne Kemp said contractors and developers were looking at alternative, cost-effective software solutions to manage supply chain disruption and cost pressures as part of long-term business strategies.

“A single, digital-ready system that can quickly and reliably forecast cash flow, assess and review project feasibility, support diversification, and maximise growth is going to give businesses a competitive edge, he said.”

COINS works with developers, home builders and contractors to provide an industry-specific ERP solution with powerful functionality to manage supply chain, project feasibility, financials, job costing, sales and commercial contracts, as well as after-sales customer care.

Connect with a COINS property development software executive for a free consultation on how its technology can support your strategic business outcomes.

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