Issues facing construction supply chains this year

A supply chain is indicative of an interconnected hierarchy of supply contracts imperative in procuring the final built asset for any given client. Essentially, it is a sequence of actions that is required to take place in order to turn raw materials into a finished product.

With a large range of autonomous business entities collectively responsible for procurement, manufacturing, and distribution, it is difficult to ever imagine a supply chain completely void of stressors slowing productivity. These issues are further exacerbated by the matter that SCMC (Supply Chain Management in Construction), in comparison to SCM, is typically a make-to-order supply chain – with every project creating a new prototype, SCMC is typified by instability and fragmentation.

Therefore, CHAS, the provider of risk prevention, compliance and supply chain management services for clients and contractors, has identified a plethora of factors it foresees as hindering the efficacy of construction supply chains this coming year.

  1. The Building Safety Bill

This bill is undoubtedly going to change the way in which buildings are constructed, maintained, and made safe. It will feature consistent reforms on fire safety, focusing upon the quality of constructed products. It will further introduce a developer levy – a tax that forms part of a plan to fund the removal of unsafe cladding. In short, the package includes an additional £3.5bn funding for residential buildings of 18 metres and above.

The bill is expected to receive Royal Assent between April and June this year. With the HSE overseeing the new building safety regime, they are urging designers to prepare accordingly.

  1. The Environment Act 2021

This bill received Royal Assent on the 9th November 2021, introducing a post-Brexit framework for environmental governance. The act confirms the inevitability of further legally binding targets surrounding air pollution, biodiversity, water quality, and waste.

The supply chain in construction will be required to review the ways in which they monitor and ensure environmental management.

  1. Net Zero targets

From the 1st October 2021, a mandate was introduced stating that all companies bidding for projects worth more than £5mn per annum to commit to achieving net zero targets by 2050. Under such regulation, organisations are obliged to produce a carbon reduction plan outlining the sources of their emissions, along with the management measures in place.

  1. The skills shortage

The Office for National Statistics (ONS) has shown a record leap in job vacancies. They estimated that as of September last year, the number was 1.2 million across all industries. This has been partly due to an aging industry, where the number of those reaching retirement, is infinitely larger than the number of those entering the field. ONS suggests that the industry has experienced a decline in workers of 42%.

This issue reiterates the importance of efforts to diversify and attract a wider range of people into construction roles, whilst looking after existing staff and contractors. As of right now, this is most certainly a candidate led industry.

  1. Materials Shortage

The Department for Business and Industrial Strategy’s Monthly Statistic of Building and Components demonstrated a month-on-month increase in material prices throughout 2021. The Timber Trade Federation are now receiving record-breaking imports for timber; with a shortage of HGV drivers to deliver such materials remains a key issue. With the government unable to persuade those abroad to take-up 1 of the 10,500 visas available for lorry drivers, projects will continue to be delayed throughout 2022.

  1. COVID-19

Of course, the pandemic is perhaps the most weighted factor upon the efficacy of SCMC. With the omicron variant circulating, and the impact of new variants difficult to predict, business will need to remain COVID-safe. The management of the virus must be prioritised throughout all areas of the supply chain hierarchy.

  1. Mental Health

Perhaps an issue with little attention is that according to HSE, stress, depression, and anxiety, remain to be the second highest cause of work-related ill health within the industry. Driven by pressured and dangerous work environments, it has become all the more important that in this current worker-led market, companies are looking after their staff and their wellbeing. Positive, flexible working strategy is just one way to offer workers a better work/life balance, in turn making business more attractive to potential employees.