What Is the Biggest Delay in Construction?

In this blog, I’m going to talk about one of the biggest delays that you all probably experience: the delay of not having materials on time. I will discuss the truth about what’s going on with material procurement, the delays, and ways to properly manage it. The content you’re about to read is something you’ve likely never heard before, so stay with us! 

What Is Systems Thinking?

Before diving into the details, I want to introduce a book called “The Fifth Discipline” by Peter Senge. The author talks about systems thinking, which posits that individual components, thoughts, ideas, processes, changes, and solutions are not the ultimate answer. Instead, everything in life is a complex system.

What Causes Delays & Overproduction in the Supply Chain

There’s an example in the book where Senge talks about a beer game to illustrate the impact of variation. In the game, suppliers and retailers deal with a popular beer. Initially, everyone orders a reasonable amount, but as demand spikes, they start over-ordering. Suppliers can’t meet the sudden surge in orders, leading to backlogs and eventually overproduction once the capacity catches up. By the time the suppliers fulfill the excessive orders, demand has already dropped, leading to wasted inventory.

This scenario reflects real-world supply chain issues, such as those exacerbated by the reactions to the COVID-19 pandemic. The panic ordering caused similar disruptions in the construction supply chains.

How Our Reaction Affects the Supply Chain

Our reactions to crises can significantly impact supply chains. Panic ordering during COVID-19 mirrored the beer game scenario, causing instability and delays. To work collaboratively in a system where many contractors use the same suppliers, stability and appropriately sized orders are crucial.

Important Mindset to Have to Avoid Delays in the Supply Chain

From a mindset standpoint, it’s essential to maintain stability and place appropriate, right-sized orders in a timely manner. This involves proper submittals and responsible ordering practices. Vendors are already aware of the common issues in the industry, such as premature ordering and over-ordering, leading to longer lead times and higher costs.

How to Minimize Waste & Simplify the Material Procurement Process

Most suggestions here are inspired by the book “Built to Fail” by Todd Zabel. Here are some actionable tips:

1. Reduce Unnecessary Paperwork and Bureaucracy: Streamline the process from design to material order, ensuring accuracy and minimal waste.
2. Value Stream Management: Visualize the flow of materials and information to identify value-added and non-value-added steps. Eliminate unnecessary steps and streamline necessary but non-value-added activities like transportation.

Benefits of Creating Strategic Partnerships with Vendors

Form strategic partnerships with vendors to reduce lead times and improve cycle times. Consistency and strong relationships can support project success and mitigate delays.

Important Concepts to Understand in Construction

Understanding the difference between lead time and cycle time is crucial. The lead time is the overall duration to get a product, while the cycle time is the actual production time, which may be much shorter. Identifying the reasons for delays—whether due to market instability or production backlogs—helps solve the root problems.

Important Reminders to Avoid Material Procurement Delays

Most material procurement delays result from not starting early enough, not managing consistently, and not delving into the details. To recover from such delays, start early, identify the value stream, manage lead times, and continuously monitor the process.

Remember, balancing inventory is key: neither too much nor too little. Right-size by managing early, understanding the value stream, and continually assessing lead times.