Low housing starts and a weak economic outlook are driving some structural changes on building products and materials companies that are being forced to become more efficient. Several key trends have emerged that are affecting building materials suppliers. In this article we look at some of these trends and how building materials supply software can help address them.
Sustainability and Green Building
The emphasis on sustainability in the construction industry continues to grow. Building materials suppliers have to adapt to the demands by regulators for more energy efficient construction using sustainable recycled and reclaimed materials. These eco-friendly and energy-efficient requirements are becoming stronger and are required for green building LEED certification. Building materials suppliers also have to adapt to the additional trend towards off-site construction driven by the need to consolidate demand and create more predictable production runs. Building materials supply software can help distributors diversify traditional vendors to add more recycled and reclaimed building products and materials and adapt to off-site construction.
There is a growing trend for architects, builders and suppliers of building products and materials to digitize their construction projects to improve efficiency, optimize resources and track construction progress. As a result, more and more projects are using building-information modeling (BIM) and building-management systems (BMS) to increase efficiency and enable architects, contractors and building materials suppliers to collaborate. To stay abreast of this, suppliers need to implement building materials supply software that facilitates electronic communication with other software systems. In addition, the push towards better on-site efficiency also drives the need for just-in-time logistics. Good building materials supply software will support this by allowing for project management, partial shipments and just-in time deliveries.
Building contractors are increasingly turning to online platforms and eCommerce, to purchase and track their building materials needs. Expanded online marketplaces for materials offer contractors increased price transparency and effectively allow them to out-source the just-in-time logistics. Building materials supply software that integrates with multiple online platforms allows building materials suppliers to develop effective eCommerce solutions to respond to this trend.
In parallel with the increasing digitization of processes, building materials suppliers are also leveraging data analytics. Good building material supply software also includes business intelligence and data analytics capabilities. Using these tools, building materials suppliers can explore their data to uncover insights into customer preferences, demand forecasting, and inventory management. This helps them optimize their stock levels and improve overall efficiency.
Continuing Supply Chain Problems
Since the pandemic, there have been widespread global supply chain disruptions that are still unsolved. A significant percentage of building materials are produced in China and are affected by the global supply chain problems. Current geopolitical tensions are only exacerbating these issues which include shipping delays, material shortages, and volatile pricing of building materials. Strong building materials supply software provides the tools to manage vendors, diversify vendors, track the progress of shipments through the supply chain and react proactively to supply chain problems.
A study by the Associated General Contractors of America (AGC) found that 93% of construction firms have open positions they are trying to fill. Various sources estimate that the overall employee shortage in the construction industry is between 500,000 and 650,000 employees. These labor shortages in the industry are continuing to affect construction project schedules. Together with the compromised global supply chains, labor shortages have caused disruption for building materials suppliers. Building materials supply software increases automation and improves efficiency and productivity - allowing suppliers to cope with shifting schedules more effectively with fewer people.
Few industries have been affected more by the move towards green solutions than the construction industry. In addition, the pandemic and ensuing global supply chain problems caused great disruption across the construction industry. These and other factors have led to some key emerging trends that building materials suppliers have to adapt and respond to in order to succeed. One of the critical capabilities they will need is powerful building materials supply software that gives them the tools to monitor developments and best position themselves for success. Contact us to learn more about Accolent ERP a leading Cloud solution for building materials suppliers.