Supply chain issues caused by Covid-19 - sound familiar? Here are some lessons the civil engineering industry can also benefit from.
I recently attended the UK Infrastructure Show, where I was fortunate to catch a panel debate on ‘Lessons Learned from the Pandemic’. On the panel were Chris Holmes, director of supply chain at NHS Supply Chain, Sarah Holliehead, head of procurement at the Leicestershire Partnership NHS Trust, and chair Glen Hodgson, head of healthcare at GS1 UK.
You may be asking “what could construction possibly learn from the NHS?” Well, I certainly was, as this is the question I posed to the panel.
The global pandemic, Brexit and growing pressure from climate change has indisputably affected the construction supply chain. Some of our clients are reporting a 20% uplift in the cost of certain materials, and some simply can’t source certain items at all. This sound familiar?
Upon hearing about the valuable lessons learned within the NHS, I wanted to explore what lessons we could transfer to accelerate our recovery and increase our resilience. Their response was enlightening.
- The importance of supply chain visibility;
- The importance of working with your supply chain to build resilience; and
- The importance of unambiguous identification of the materials delivered so that you can judge equivalence.
1. The importance of supply chain visibility
Chris immediately offered this first lesson, followed by a murmur of consent across the other panel members and wider audience. This may seem obvious, but regardless of blatancy, it needs to be said, as we certainly have room to improve on this in construction.
The old adage “you can’t manage what you can’t measure” rings true here. With so many and such varied systems in use across our supply chain, it’s no wonder we struggle to get a clear and comprehensive picture of what is happening. However, it is becoming increasingly clear that not understanding what is going into our buildings poses an increasing risk to contractors, developer and end users alike.
2. The importance of working with your supply chain to build resilience
Like the NHS we, in construction, don’t have the luxury of stockpiling materials. For the NHS, this is often due to expiration dates. For construction, we are more constrained by space. So ‘just in case’ supply management is not a good option for us.
I’d also note that the ‘just-in-case’ model has often led to stockpiling of materials on site that then get damaged and wasted (as per the 13% of materials going away as waste, according to a 2013 study) before even being used for their intended purpose.
This is not only a waste of money, it’s also deeply unsustainable, so we need to operate a ‘just-in-time’ model instead. This is what the NHS and construction have been working towards, and the pandemic certainly accelerated some learnings in this space.
It was acknowledged that it’s not possible to control every step of the supply chain, but it is possible to identify multiple points along the way that can have a significant impact on resilience and reliability.
With greater supply chain visibility, we should be able to identify key bottlenecks and vulnerabilities, and put in place strategies to alleviate these, such as diversifying supply companies and locations, or providing greater clarity on the ‘acceptance criteria’ of various materials and suppliers.
Sarah noted that after the initial surge had passed, the ongoing PPE supply chain was 70% UK-based. This provided greater independence and resilience of their supply chain. This may not be possible for construction material supply, but the diversification is vital.
3. The importance of unambiguous identification of the materials delivered so that you can judge equivalence
This final point was contributed by the panel chair, Glen. One thing that became acutely clear during the NHS’s drive for PPE (personal protection equipment) was that not all things are made equal, but many things are sufficient.
The endless scramble to certify and verify what PPE was acceptable for different uses led to a lot of avoidable waste and stress.
As the construction industry begins to face similar shortages of key materials, establishing ‘what we have’ and ‘what is equivalent’ has never been more critical. Without these checks, we risk either installing low-grade materials (incurring significant risks down the line) or struggling to get materials at all, having to reject items that may be sufficient, but are not acceptable.
The key barrier here somewhat comes back to point number one – supply chain visibility and transparency. If we cannot capture sufficient information in a timely manner on what is being provided by our supply chain, then we cannot hope to manage these risks.
The shift towards consistent and unified reporting of materials across our varied and often fragmented supply chain, while simultaneously striving for diversification in order to achieve resilience, seems an impossible task. But with digital tools like Qflow entering the market, it doesn’t have to be so.
Digital construction tools offer a way of tracking and managing your supply chain without having to require an impractical overhaul of their systems, or shelling out hundreds of thousands on hardware.
The NHS has invested in the right digital tools to help them build resilience and efficiency within their systems. Construction can do the same.
With a focus on supply chain visibility and transparency, resilience, and effective materials documentation, we may yet be able to overcome the existing supply challenges and build back better.