Q4 2021 Summary:
Material unavailability and unpredictable price escalation continue to plague construction. The solution to material shortages is threefold: Choose the delivery method which best resolves these challenges; Consider using alternative materials and manufacturers; Order materials early and store them.
We live in an era where doom-and-gloom headlines would have us believe completing projects on time and in budget has never been more difficult. While we believe this to be hyperbole, we would be foolish not to acknowledge the extraordinary challenges facing our industry today. Having a plan to address limited material availability, cost escalation, and labor shortages is the key to a project’s success in this current market. The first step in the plan is to choose the delivery method that can best help resolve these challenges. To that end, the following chart highlights the strengths and weaknesses of various delivery methods, in relation to current market constraints:
Click here to view this chart in your browser.
To address material unavailability and unpredictable price escalation, many design teams and contractors are suggesting Owners be open to alternative products or manufacturers and forego any proprietary specifications. As your trusted advisors, they can offer valuable market insight, vendor relationships, and product knowledge when working through material procurement challenges.
Before approving any substitutions, you may want to ask the design team or contractor some questions, like: "What is the price difference? How do their long-term maintenance costs compare? Is the alternative material as durable as the original? How does the warranty period compare? Have you used this material on a previous project and how did it perform?” Having these conversations early can help you make the most informed decisions when it comes to product substitutions.
A shortage of gypsum and a lengthy procurement lead time caused us to source an alternate sheathing supplier on the University of Houston – College of Medicine project.}
Just in time deliveries, a principle of lean construction, have become increasingly difficult due to ongoing supply chain disruptions. It only takes one raw materials supplier who cannot deliver goods on time to shut down an entire production process—and ultimately delay your project. A prime example of this principle is the worldwide microchip shortage’s impact on automobile production and sales.
In today’s economy, we recommend ordering materials early and storing them. Here are the things to evaluate when deciding where and how to store them:
Early procurement and storage of materials is one of the best ways to minimize schedule impacts of unpredictable supply chain issues. Make sure your construction manager continues to monitor material lead times, procure them early, and evaluate a variety of material storage options.
Because of the absence of laydown space at the Harris County, Criminal Justice Center Mitigation and Improvement project we are utilizing off-site storage for materials we procured early.
Vaughn Construction is a Texas-based construction company that specializes in new construction, renovations and additions to civic, healthcare, education and research facilities. The privately-held company has offices in Austin, Bryan/College Station,
Dallas/Fort Worth, El Paso, Houston, Lubbock, San Antonio, and the Texas Medical Center (Houston).