Strategies to Mitigate Supply Chain Challenges in your Construction Project
In today’s environment of inflation and supply chain challenges, it seems like everything has been affected. Even though the construction market is hot right now, it too has been impacted by long (sometimes very long) lead times on items previously thought of as easy to get commodities. Contractors are having a hard time making any kind of promise to owners about how long construction projects are going to last or even how much they are going to cost.
There is no easy answer to these problems, but there are several strategies you can follow to help mitigate some of the impacts to your project. Here are some that have been used successfully.
During the planning phases of your project, there are a few strategies that can be effective, namely:
a. Set realistic timelines for your project. There is a tendency to try to be aggressive when developing a construction schedule to please the client and/or to reduce General Conditions expenses. In today’s environment, it may not be the best idea to schedule aggressively only to have to disappoint the client later.
b. Start earlier than you think you need to.
c. Get input from trade partners on what they are currently experiencing for lead times. These days there is an endless list of items that are taking longer to get than ever before. Identify those upfront so your schedule can be created with those items in mind.
d. Under promise and over deliver when communicating schedules and budgets with stakeholders. Again, there is a tendency to provide a schedule and budget that is as quick and cheap as you are comfortable with to get the work. This is not in the best interests of the client or the design/build team. Make sure you put some contingency time into your schedule just as you would put contingency dollars into a budget. The more unknowns you are dealing with, the bigger the contingency you should carry.
e. Select a project delivery method that emphasizes speed (e.g. Design/Build or CMGC)
f. Communicate early and often to everyone on the team what your expected project completion date is. Encourage everyone to bring up any potential delays so mitigation strategies can be developed as early as possible.
During the execution phases of the project, delays cause even more acute problems because they can cascade from one trade to another and often have an impact on the final delivery date. Again, there are strategies that can help mitigate the impact:
a. Design a separate demolition drawing package that can be pushed through the permit process more quickly (if allowed by your Authority Having Jurisdiction “AHJ”). That way, demolition can potentially start while waiting for final review of your total building construction permit.
b. Work with a permit coordinator who is familiar with all of the requirements of a particular AHJ. They can help ensure the first design package that is submitted includes everything the AHJ expects.
c. Consider ordering long lead items as soon as practicable. This can oftentimes even be prior to the Construction Documents completion. If the risk is greater than the owner or contractor wants to accept, be sure that the team is ready as soon after the CD package is delivered to provide submittals for these items so they can be ordered ASAP.
d. Put the “just in time” delivery strategy on the back burner until the supply chain becomes more predictable. Order items as soon as you can and find a place to store them if they arrive earlier than they can be installed.
e. Be creative when developing the construction schedule and the order of events. Obviously, some things need to precede others (think conduit needs to be in place before you can pull wire), but the traditional methods of construction may need to be carefully studied to see where time can be saved at the expense of efficiency. An example of this is to do a floor in sections so that other trades can continue their work rather than kicking everyone out of space for 3-5 days while the flooring contractor finishes their work.
f. Consider whether schedule or cost is more important. This is not as straightforward as it seems. If you can save a couple of weeks on a construction schedule by running multiple shifts, you might save that same amount or more by avoiding General Conditions costs or the costs of inflation. Or if you can pay a little more for something and get it onsite faster, you might save construction costs at the end of the project due to a shorter schedule.
g. Consider a phased approach for move in dates if it makes sense for the client and the AHJ allows it. Perhaps there is a greater need for one department in a company to move in than another. The area of the building designated for this early department move in may be able to be prioritized.
h. Prioritize Life Safety and other Code related construction tasks that the AHJ will concentrate on. Some tasks (such as some process related equipment) could be completed later after you have your Certificate of Occupancy.
i. Communicate with your vendors more often than you normally would. Be the squeaky wheel to keep anything that you order at the top of mind for your vendor. It is human nature to try to satisfy the folks you have a good relationship with and with whom you communicate often before satisfying a faceless stranger who just placed an order and is waiting patiently.
I am sure others can add to this list, but these strategies are a good place to start. There are many things beyond our control right now when it comes to the supply chain. Those who are creative, resilient, and communicative will weather this storm better than the rest of the crowd. Think outside the box, say no to stress, and keep on smiling to survive this time in our history.