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Material Shortages: Time to look for solutions

16 November 2021

It seems every other construction update, LinkedIn post or internet search tells us of the imminent disaster due to material shortages and the serious impact on the industry.  The problem is here, it is real and there are going to be significant effects felt for years to come.   

But how about something a little different, as opposed to another article citing the most recent statistics from the BCIS, updates from the RICS and the latest industry insight report, we look to the future and explore the ways in which we can adapt to the problem we are facing, instead of waiting for the wave to crash upon us and glibly say "I told you so".

Whilst I do not wish to diminish the potential severity of the crisis, with the latest reports suggesting nearly 2/3 of house builders are growing increasingly concerned about the lack of raw materials (Frank Knight, November 21), this is not the first, and likely not the last time the industry will face something like this. The material shortage crisis (as well as the fuel crisis) has led to higher cost spikes over the last few quarters than we have seen in recent years, but this is not unheard of, and with our cyclical economy, construction tends to ebb and flow with more extremes that other sectors. We have gone through similar material shortages before; the biggest concern is that we have not seemingly learnt from these.

So without dwelling on the problem, let's consider some of the more practical (potential) solutions to properly limit the extent of the materials crisis?

COP26 brings into stark focus our need to invest in more sustainable and manageable alternatives to the methods and materials we currently use. A move towards modular construction and modern methods of construction have been a focal point for years , but traction and uptake remains slow. Where sections, parts or in some instances whole buildings can be pre-fabricated in specialist facilities, ensuring less wastage and reduced demands on labour are just the thing we need right now.  

In terms of alternative building materials, there already exists a promotion in using SIPs (Structural Insulated Panels), engineered or recycled timber and insulated concrete panel blocks, which also focus on reduced raw materials and a focus on efficient building.  What we cannot allow to happen is a "race to the bottom" approach of cheaper building materials; as all this will inevitably do is increase upgrading, remedial or restorative works throughout the life cycle of any asset.  As my mother says "buy cheap, buy twice".

Beyond the "what" and "how" we build and reduce waste, we also need to look at supply chain management. Ensuring timely procurement and the creation of supply chain relationships, with the client being part of these conversations early on and strategically thinking about what needs done, and when, in order to manage lead in times when they may be lengthy; instead of approaching the builder or contractor and stomping their feet when they are told there may be delays in supply.

We should also consider improving education in the public sector to different ways and alternatives to traditional contracting; and explore increasing in the uptake of Target Cost or open book type contracts; where visibility and transparency are key. There also needs to be an acceptance that risk should be placed with the party best positioned to deal with it, and that this sentiment does not mean "transfer all risk to the contractor" and gamble on the premium that may be paid for this.  

Ultimately there is no quick fix for the immediate materials shortage, but where early dialogue can be had, expectations  can be managed and supply chains are engaged as early as possible, we may be able to mitigate the current impact. We must however look to the future, as to how we can build smarter, more efficiently and in a manner that when the next material shortage presents itself, we are ready.

If you have any questions arising out of this article, please contact David McNeice.

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