How Can Construction Firms Protect Their Supply Chains?

Arguably, 2021 was the most tumultuous year for the construction industry over the last two decades. The pandemic has obviously been the biggest disruptor to global supply chains, but factors such as labour shortages, inflation and economic policies have also contributed to instability in the sector. Case in point: The Guardian reports that 34% of construction firms reported supplier delays caused by a myriad of issues in December 2021.

Supply chain disruptions can have disastrous consequences if businesses don’t have contingency plans to manage their impact. But as the adage goes, prevention is ultimately better than cure. Proper supply chain risk management training enables you to plan for and mitigate threats such as health and safety disruptions, data breaches, criminal activity and natural disasters.

Below are a few examples of tactics to manage supply chain risks.

Diversify Your Supply Chain Network

Having a single supplier in charge of providing materials and labour seems convenient — after all, it makes sense to transact with one entity for your supply chain needs. But if that business lets you down, makes mistakes, goes out of business or is unable to meet demand, it could end up paralysing your entire supply chain, or at least a good portion of it.

A multiple supplier strategy enables you to spread risks and have backup suppliers if your partners encounter problems. This brings us to the next point.

Have Contacts with Backup Suppliers

Murphy’s law dictates that anything that can go wrong will go wrong. This is especially true with supply chains, and there are all kinds of reasons why suppliers are unable to meet your expectations. The pandemic has taught us that tightened border controls have caused delays in overseas shipments and rising freight charges.

Anytime one of your suppliers experiences a problem, your supply chain manager must be able to bring in an alternative supplier as quickly as possible. This often requires paying more for last-minute orders for materials and labour, but having a list of backup businesses at your disposal goes a long way towards keeping projects on time.

Develop Risk Management Plans

Risk assessments are critical to preventing disruptions to your supply chain. In a nutshell, a supply chain risk assessment enables you to identify any risks that could potentially disrupt your supply chain, whether it’s suppliers that could expose you to legal action or warehouse/storage spaces for materials that could be prone to accidents.

The results of your risk assessments will serve as the foundation of your risk management plans, which outline contingency plans for foreseeable events and risks that could negatively affect your supply chain.

Work with Supply Chain Risk Management Solutions Providers

Supply chain risk management can be a complex process that needs all hands on deck. Fortunately, supply chain risk management services can help you by handling many repetitive, time-consuming aspects of risk

management.

For example, accreditation schemes such as the Common Assessment Standard consolidate supply chain compliance across 13 areas of risk management, from health and safety to building information modelling (BIM) competence. Contractors can work with a single provider like CHAS rather than go to the trouble of approaching multiple assessment bodies.

Author: Alex Minett

Alex Minett is the Head of Product & Markets at CHAS, the UK’s leading health and safety assessment scheme and provider of risk mitigation, compliance, and supply chain management services. With a working history in the audit and management consulting industry, Alex is experienced in implementing visions and strategies. Skilled in negotiation, management, and business development, he is passionate about driving CHAS in its mission to safeguard organisations from risk in the UK.