RAW MATERIALS SHORTAGE: IS THERE A LIGHT AT THE END OF THE TUNNEL?

RAW MATERIALS SHORTAGE: IS THERE A LIGHT AT THE END OF THE TUNNEL?

A large portion of delays in construction project completion is due to the lack of raw materials.  

This issue first came about shortly after the onset of COVID.  Manufacturing facilities and warehouses were closed due to COVID outbreaks and state mandates.  Weeks and months passed without movement on the assembly lines within the factories.  

Slowly things started to open up, people went back to work but were met with another hurdle.  Raw materials were hard to come by.  Appliances were the first sector that felt the pain.  

Electronic chips were in low supply but very high demand.  Appliance distributors had (and still have to, to this day) allocate incoming inventory to their clients on a percentage basis.  Gone are the days of receiving a complete order of kitchen appliance packages.  Due to our strong relationships with our distributor partners, we are able to acquire more of what we need to complete projects.  

WHERE THERE’S A PROBLEM, THERE IS ALWAYS A SOLUTION

We’ve seen a scarcity of windows and plank flooring as well.  One job in Nebraska required plank flooring, which was nowhere to be found in the state.  The round needed to be completed so new tenants can move in, and we can progress with the remainder of the rounds’ renovations.  

Instead of sticking our heads in the sand, we regrouped and found a solution to the problem.  By drop-shipping the 50,000 square feet of plank flooring from another state to Nebraska, we were able to significantly diminish the delay in completion and were able to move to the next round. 

It pains us if we cannot meet the anticipated turn date on a round of units, but keeping our clients in the loop with open communication lines and weekly schedule updates help immensely.  

As a national general contractor, we tend to have more leeway when it comes to the receipt of order items due to our buying power and footprint.  We can handle the carrying costs when delays arise.  Smaller GCs have a much more difficult time sticking to their schedules due to the lack of materials, and a shallower pocket when it comes to funding.

Do we see the light at the end of the tunnel?  Yes.  Is it coming sooner than later?  That we cannot determine, but we can stay ahead of the pain points by utilizing our in-house strength: 

• Pre-fabricating countertops and cabinets in mass at our facility when the materials are available
• Purchasing in mass quantities when viable
• Looking for a viable solution by working hand-in-hand with our partners
• Open communication with clients