How Disruptions in The Supply Chain Affect the Infrastructure Industry

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Supply chains across industries are a focal point for the success of processes and operations. Disruptions can have huge consequences not just for individual businesses but the entire industry.

This is why it’s important to strengthen resilience within each step of the chain so it’s appropriately prepared for anything from industrial action to huge geopolitical events.

Stewart Beer, Site Manager at Electrix International, a global supplier of stainless steel electrical enclosures, has offered some expert insight into the supply chain issues facing the infrastructure industry, including the impacts it has and posing some potential solutions.

The immediate effects on infrastructure projects

With infrastructure projects lasting years or even decades, there are plenty of concerns about the effects of supply chains on them. Project delays are a huge concern, with the lack of available materials being a direct contributor. Crews’ workflows are disrupted while waiting for components and materials, which also means completion dates and schedules are hugely affected.

This can have a ripple effect on the project’s cost. When materials become scarce, their prices inevitably rise. Contractors are forced to absorb these inflated costs or pass them on to public agencies, potentially derailing entire projects due to budgetary constraints.

This volatility can leave infrastructure projects in limbo and uncertainty. Because of the lack of predictability, timelines and budgets cannot be planned. For example, the construction of new roads and bridges, vital for easing traffic congestion and improving connectivity, has been hampered by shortages of asphalt, concrete, and steel. Delays in obtaining permits and regulatory approvals, exacerbated by the pandemic, have further stalled progress on these projects.

Long-term effects on the industry

Beyond the immediate challenges, supply chain disruptions also raise concerns about the long-term health of the infrastructure industry. The shortage of skilled professionals is a well-documented issue. Supply chain disruptions exacerbate this problem by creating periods of inactivity and uncertainty. People may be hesitant to enter a field where projects are constantly at risk of stalling due to material shortages.

There has also been a significant stagnation in innovation. Infrastructure development often relies on the adoption of new technologies and materials. However, supply chain disruptions can stifle innovation by making it difficult for contractors to experiment with novel materials due to concerns about availability and cost.

Strengthening for the future

Addressing the challenges posed by supply chain disruptions requires a multi-pronged approach. There are some potential solutions, with one fundamental change being to utilize domestic manufacturing. Encouraging domestic manufacturing of critical infrastructure materials can lessen reliance on global supply chains and mitigate the impact of disruptions abroad. Investments in local production facilities and incentives for manufacturers can strengthen the domestic supply chain.

Diversifying suppliers for infrastructure projects can also be a massive solution for preventing supply chain disruptions. Businesses shouldn’t rely on a single source for critical materials. By diversifying their supplier base and building relationships with local and regional manufacturers, contractors can create redundancy and avoid being caught off guard by disruptions in one source.

Stronger communication throughout the supply chain is crucial. Contractors, developers, and material suppliers must be transparent about their needs and anticipated demands to allow for better forecasting and planning. Utilizing collaborative platforms and information-sharing initiatives can help improve visibility throughout the supply chain.

Emerging technologies, such as advanced planning software and digital inventory management tools, can help contractors better anticipate and manage material needs. Additionally, exploring new construction methods that utilize prefabricated components or modular construction can potentially reduce reliance on traditional materials and streamline the construction process.

The infrastructure industry is facing a critical juncture. Disruptions in the global supply chain pose a significant challenge, but they also present an opportunity for innovation and adaptation. By implementing strategic solutions and fostering a more resilient supply chain, the industry can ensure the timely and cost-effective delivery of essential infrastructure projects crucial for the nation’s continued growth and prosperity.