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- Herausgeber: John Wiley & Sons
- Kategorie: Fachliteratur
- Sprache: Englisch
A concise tour of need-to-know concepts in supply chain management for busy construction executives and project managers, complete with bulleted chapter-specific summaries
In Next Level Construction Management: Leveraging Digital Supply Chain Fundamentals for Project Success, renowned business process improvement and digital supply chain expert Dyci Sfregola delivers a timely and insightful discussion of how supply chain fundamentals from a variety of industries, including automotive manufacturing, medical devices, and pharmaceuticals, can be applied to the construction industry to achieve positive project outcomes. The author provides a thorough introduction to the fundamentals of supply chain design and governance, network design, strategic procurement and sourcing, integrated business planning, and the enabling technologies that support these processes.
The book also offers substantial coverage of supply chain leadership principles, technological innovation in the construction industry, digital tools and trends in construction supply chain, and resilience and agility best practices for project and program professionals attempting to execute on their projects.
Readers will also find:
- A thorough introduction to supply chain management and planning for construction
- Comprehensive explorations of the fundamentals of supply chain management and strategies for assessing the state and maturity level of their own organization’s supply chains
- Practical discussions of key supply chain terminology and techniques for improving supply chain planning and management
- Insightful industry case studies from construction firms outlining the real-world application of the concepts discussed in the book
Perfect for executives, managers, and senior business leaders, Next Level Construction Management: Leveraging Digital Supply Chain Fundamentals for Project Success will also benefit students in construction-related programs, project management, supply chain and logistics disciplines, and undergraduate- and graduate-level business administration programs.
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Veröffentlichungsjahr: 2025
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Table of Contents
Cover
Table of Contents
Title Page
Copyright
Preface
CHAPTER 1: Introduction
Supply Chain Fundamentals for Construction Management
PART 1: Supply Chain Organization and Governance
CHAPTER 2: What Is Supply Chain Management?
What Is Supply Chain?
Why Does Supply Chain Matter?
Digital Supply Chain Today
Supply Chain and the Built Environment for Good
CHAPTER 3: Supply Chain Models
Vertical Integration Versus Horizontal Integration
CHAPTER 4: Supply Chain Leadership and Oversight
Supply Chain Stakeholders
CHAPTER 5: Supply Chain Design and Maturity
CHAPTER 6: Working Capital and Cash Flow
Cash Flow Management
Landed Cost
CHAPTER 7: S&OP and S&OE Essentials
Executing
Scenario Planning
CHAPTER 8: Procurement Fundamentals
Demand‐Driven Material Requirements Planning (DDMRP)
Supplier Relationship Management
CHAPTER 9: Performance Analysis and Metrics
CHAPTER 10: Part I Recap
Action Items and Takeaways for Executives and Senior Leaders
PART 2: Digital Tools
CHAPTER 11: The Current Technology Landscape
Why It Matters
CHAPTER 12: Digital Tools
Emerging Technologies
Enterprise Resource Planning (ERP)
Inventory Management and MRP
Additional Benefits of ERP Systems
ERP Platform Versus Point Solution
The Case for Open Source
MRO and Service Parts
Logistics Management, WMS, and TMS
Project Management and Scheduling
Procurement Technologies
Inventory Management Tools
Advanced Planning Systems
CHAPTER 13: Data Governance
Best Practices for Data Governance
What Is Master Data and Data Management?
Data Visualization and Analytics
CHAPTER 14: Tool Selection – Criteria and Considerations
CHAPTER 15: What You Need to Know About Cybersecurity
How to Build Competency
Course Recommendations
CHAPTER 16: Parting Words About Digital Tools
PART 3: Implementation Best Practices
CHAPTER 17: Technology Implementations
Steps to a Digital Implementation
CHAPTER 18: Change Management and Leadership
CHAPTER 19: Reskilling and Upskilling Your Team for Digital Supply Chain
Training
Evaluating Training Programs
CHAPTER 20: Part III Takeaways
CHAPTER 21: Conclusion
The Case for New Construction Supply Chain Design
The Case for Digital
The Case for Strategic Procurement
Glossary and Additional Resources
Glossary
On‐Demand Supply Chain Training Options
Manifest: The Future of Supply Chain & Logistics
Manufacturing and Supply Chain Conferences
Cyber Security Conferences
Manufacturing and Supply Chain Publications
Index
End User License Agreement
Guide
Cover
Table of Contents
Title Page
Copyright
Preface
Begin Reading
Glossary and Additional Resources
Index
End User License Agreement
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Next Level Construction Management
Leveraging Digital Supply Chain Fundamentals for Project Success
DYCI SFREGOLA
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Preface
Welcome to Digital Supply Chain 101. If you’ve ever wondered what supply chain really is and how it applies to the construction industry, this book is for you. Inside, you’ll find an introduction and high‐level overview of some of the most important fundamentals of construction supply chain and the technology that drives it. The supply chain frameworks and terms you’ll find in this book are presented within the context of construction operations. But anyone who has spent significant time in supply chain operations and strategies in any industry will tell you that these concepts are industry diagnostic.
The construction industry is currently in a much‐needed and long‐awaited time of innovation, evolution, and disruption. COVID‐19 and subsequent disruptions brought supply chains to the forefront for leaders across business models, geographic locations, and company sizes. We are currently in the era of the operator, where sales and marketing will only get you so far. If you are unable to operationalize on the promises made to customers during the sales process, your business will suffer. And if you are not able to operationalize the sales plan profitably because you have not optimized your supply network and value chain, it is only a matter of time before your competitors will begin to outpace you in the market.
Inside this book, you will find the culmination of years of research, experience, and advisory related to concepts presented during my digital supply chain trainings and workshops and consulting engagements. Unfortunately, trainings and workshops are temporary. You attend them. You reflect on them. You might discuss them with your peers, managers, or direct reports. But ultimately, once the training is over, it’s over. This book, on the other hand, is your handbook and your guidebook to creating and recreating – evaluating and reevaluating – your supply chain structures, strategies, tactical operations, and the digital tools that enable all of that.
Technology has improved exponentially over the past few years, with AI implementations at scale across business and consumer use cases. The technology will only continue to improve, but the fundamentals discussed in this book are evergreen, regardless of the type of technology you’re implementing and regardless of the current or future designs of your value chain. I encourage you to use this book as a reference guide whenever you are looking to embark on a supply‐chain‐related software implementation or process improvement initiative. This book is not meant to be comprehensive and robust but rather an introduction to the highly complex and highly nuanced business function that is supply chain management. I, by no means, have all the answers, but years of working as a consultant and a supply chain practitioner have taught me some fundamental best practices related to both immediate‐term operational and supply chain execution, as well as long‐term integrated business planning, and supply chain strategy to ensure resilience and agility.
I encourage you to read this book as a refresher if you are a seasoned professional. It is easy to get caught in the weeds and forget about the big picture of what we are trying to accomplish and why. And I say this speaking from experience, so keep this book handy. If you are not well‐versed in supply chain, I encourage you to read this book and use it as inspiration of how you can collaborate with your supply chain partners. If you are in a leadership position, use this book to help generate ideas of how you can support your supply chain and operations employees as they seek to achieve what many may think is impossible.
As supply chain professionals, the world depends on us to keep it moving. As construction professionals, the world depends on us for roads and infrastructure, airports and travel, and places to live, learn, and heal. As construction professionals, we are also a key component of the value chain. Where would we be able to store goods if not for construction professionals? Where would we be able to make goods if not for construction professionals building our manufacturing and production facilities? How would we be able to move goods were it not for our construction professionals who design and build the roads and airports that trucks and planes use to move critical products that keep the world going: medicine, food, clothing, and more? Take what you read here and put your spin on it because, like I say all the time, at the end of the day, supply chain is a people function. We can add all the technology, data analytics, and digital automation we want, but at the end of the day, in order for supply chains to work, we have to also consider languages, cultures, religions, and politics. So some of what you read here may or may not be beneficial and applicable to your business and your team. But if you are in a position to drive supply chain strategy, governance, or execution, or impact or influence it in any way, this book is for you. And if you’re in business working, especially in construction management, I’m talking to you. Happy reading, happy operating, and happy building. Here’s to the operators. Cheers!
One last note: Due to the current state of AI in our world, it is important to note that this book was written without any artificial intelligence. This is the culmination of years of personal experience consulting, teaching, and doing the job, as well as the experience and expertise of the engineers in the trenches building supply chain software to help improve the way we move, make, and plan. It’s hard and it’s complex, and there are a lot of moving pieces. It takes a lot of work, and AI doesn’t have the answers, at least not yet.
Dyci Sfregola, CSCP
Atlanta, GA
April 2025
CHAPTER 1Introduction
What became evident to the rest of the world (but was already very evident to those of us working daily in the supply chain) during the COVID‐19 pandemic of 2020 – and all of the subsequent supply chain disruptions – is that many companies have been successful despite themselves, not because of the good supply chain practices that they have in place. From 2020 to 2022, we learned how fragile and intertwined our global supply chain systems are. What soon followed were even more headlines related to delayed construction or canceled construction projects, or construction projects that were significantly over budget citing “supply chain issues.” Even in 2024, we continued to read about project cancelations and company closures, increased cost of materials, labor shortages, and other issues that present challenges to achieving strategic goals for many companies. While many industries face the same challenges and are conducting day‐to‐day operations in the same macroeconomic conditions, one thing has emerged as clear and evident: the companies with the best operations and supply chain talent and digital systems are navigating the waters of the “new normal” for business better than those that lack the digital architecture and supply chain know‐how to execute. Where industries like manufacturing, retail, pharmaceuticals and medical devices, grocery and food and beverage had been working for years to improve supply chain efficiency and implement foundational standard operating procedures, the construction industry, in recent years, emerged as a laggard in the adoption of these principles and the technologies associated with them. Construction managers, and construction leaders, by and large, were not and are not equipped with the knowledge of supply chain fundamentals and basic frameworks that are highly prevalent and, arguably, quite advanced in other industries. Where other industries were able to more effectively navigate disruptions and are striving toward resilience and agility, not just efficiency, the construction industry continues to struggle.
The adoption of supply chain fundamentals has become even more critical as offsite, and industrialized construction methods become more popular as a means to meet construction demand across all different types of buildings and construction. Offsite construction methods became the belle of the ball recently after many years of consisting of only a small percentage of construction projects. From 1960 to 2015, offsite projects consisted of about 10% of global construction projects. From 2020 to 2023, that percentage increased at a 5% rate year over year with an expected continued growth over the next 20 years of 20%. As many companies began to incorporate prefab and modular construction methods into their construction business models, many realized how unprepared they were from a supply chain management perspective to be able to properly execute the manufacturing and material flow activities required to realize the promises of offsite construction. Anecdotal evidence from countless personal conversations I've had with modular and prefab leaders, as well as executives from general contractor firms and owners in traditional construction, suggests that it is understood that effective supply chain management, componentization, and standardization are the keys to become capable of meeting current construction demands and truly re‐engineering the way we build buildings, reduce waste, and improve productivity. It is critical for construction leaders and project managers to understand and adopt supply chain management fundamentals and the technologies that enable supply chain execution if we are to achieve carbon reduction and net‐zero goals and meet construction needs for affordable housing. It is even more critical that they adopt not only modern digital fundamentals, but also the tried‐and‐true supply chain frameworks from the 20th century like Total Quality, Six Sigma, and Just in Time (JIT). These concepts, in some form or fashion, will always have their place in the supply chain, but we must also remember that these philosophies were developed and tested when the world was in a very different place. The effects of geopolitics and global trade, technology advancements like artificial intelligence (AI), blockchain, virtual reality and augmented reality, and generational human behavior changes and expectations of both customers and the labor force require us to fully redefine the way we approach supply chain management within the construction space.
When you talk to people from different industries, the concept of supply chain management is oftentimes commonplace. Companies might not be managing their supply chains well, but they are fully aware of the different business functions and activities that make up the supply chain and are impacted by their supply chain. I have personally worked with business and supply chain leaders in aviation, aerospace and defense, medical devices, pharmaceuticals, consumer products, wine and spirits, food and beverage, and all types of manufacturing – from global household names and multinational enterprises to startups that you may have never heard of. My career as a digital supply chain consultant exposed me to different functions of the supply chain across all types of industries and company sizes, and I have seen the inner workings as a practitioner as well. It was not until I began to work in the construction industry that I realized that the fundamental concepts of supply chain management, and the digital systems that enable supply chain planning and execution were not taught nor thoroughly understood by most project managers and construction managers, which is very interesting because construction project managers are arguably supply chain managers. Construction managers on any given project are responsible for the flow of material, labor, and services in order to ensure on‐time and on‐budget completion of a project. The level of risk associated with missed material deadlines is incredibly high in the construction industry, and yet even executive leaders at large construction firms have been slow to adopt workflows and standard operating procedures that are proven to improve operational excellence in other industries. I wrote this book with them in mind – construction leaders and project managers who were not taught supply chain fundamentals and will, undeniably, have a lot more success with their construction projects if they understand and leverage some of these basic principles.
After delivering several workshops to construction leaders, I noticed a pattern: many construction leaders are not aware of made‐to‐order supply chain management. On more than one occasion, following or during a supply chain workshop, I have had construction leaders tell me that supply chain management fundamentals were not important for their businesses because they worked on projects. Executing in a project‐based environment does not mean supply chain fundamentals should not be followed. It simply means that certain concepts will be more relevant than others. In this book, we will talk about made‐to‐order and assemble‐to‐order environments and how these concepts can also be leveraged for the engineer‐to‐order environment where many construction projects are executed. I will also address frequently asked questions like:
When do I need to hire someone that knows about supply chain?
What is an enterprise resource planning (ERP) system, and do I really need one?
What digital systems are important to my business and when should I implement them?
Is there a standard naming convention for stock keeping units (SKUs) and product numbers?
How do I use these concepts and are they important to me if I work in a project‐based environment?
These are all questions that I have received from clients, prospects, and students that attend my training sessions.
Construction and the built environment is one of the oldest industries in the world. Humans have always needed shelter, and we must continue to innovate and improve the quality of the buildings where we live. When you look at the evolution of construction in a silo, one would think that the industry has come far, and it has – again in comparison to itself. But when you look at construction in comparison to other industries, innovation and productivity gains have lagged drastically. A 2017, McKinsey report highlighted that the construction industry has averaged only 1% growth over the past 20 years. Meanwhile, the total world economy has grown by 2.8%, and manufacturing (one of the industries most closely compared to construction, especially industrialized construction) has grown by 3.6%. Construction is one of the most important industries that truly affect the human experience – from healthcare to manufacturing and logistics, to leisure. On Maslow's Hierarchy of Needs, shelter is a foundational aspect of human well‐being.
Where we live, work, and play is crucial to human survival. So why have we not pushed the needle further? While there are many reasons that could be cited, one fundamental variable missing in construction operations is solid supply chain management foundations and frameworks. As previously mentioned, other related or similar industries like automotive, telecommunications, heavy machinery manufacturing, and pharmaceuticals have mastered, or at least understood the critical importance of concepts like supply chain network design, cross‐functional collaboration, strategic procurement and sourcing, and sales and operations planning (S&OP).
In this book, we will discuss supply chain fundamentals and frameworks that are commonplace in other industries. We will also discuss how these frameworks apply to and can be leveraged in construction and the built environment, including functions like property management and facilities management. This book is not meant to be an exhaustive guide to all things supply chain. There is a plethora of resources that provide overviews as well as in‐depth details about the different types of supply chains – books that are considerably longer than this one. This book is intended to be an introduction to core supply chain concepts and frameworks that are applicable to construction management for both traditional and offsite or industrialized construction. For the purposes of this book, we will consider industrialized construction as any form of construction that involves factory production or assembly. I will not debate the use of terms like prefabricated construction, offsite, or modular. In the context of our conversation regarding supply chain concepts, industrialized construction is any type of construction that is not executed at a construction site. It is important to note this because some of the concepts we discuss, like inventory management and manufacturing process improvement, will have different meanings, consequences, and applications based on whether or not manufacturing is involved as an overall critical phase of the construction process. It is also important to note that the overall strategic supply chain governance and design will be different for traditional construction and industrialized construction, which will be discussed in detail later.
A 2024 Alcott Global survey of over 150 C‐Suite executives across organizations of various sizes found that a full understanding of end‐to‐end supply chain operations is the most important skill for supply chain teams in today's work environment. Supply chain cannot be executed in siloes, and it is critical for construction project managers and leaders to approach construction management from a systems‐thinking perspective, with the foresight to include all supply chain operations in planning and execution activities. Data analytics and understanding of the latest supply chain technologies rounded out the top three most important skills for today's supply chain teams. So how do you get there and build out the competency internally?
If you have more than $5 million in revenue and your supply chain is run by an accountant, office admin, or superintendent, you are missing out on a lot of value. The return on investment (ROI) for supply chain headcount is usually less than a year, and companies with annual revenues of more than $20 million could potentially hit that ROI in six months. Let us run the numbers on this scenario:
A small manufacturer is growing moderately and consistently where capacity is currently at 40–60%, which means the company will likely be looking to make new equipment purchases soon, but certainly not today. Some capacity is lost due to material or part delays. One stock‐out incident every month takes two days to resolve. So that is 16 hours of capacity per incident and 192 hours of machine time in a year. If the outlay of a machine is $100/hour, that's a $19,200 financial loss, on top of potential revenue decreases and customer service recovery costs like expedited shipments. This is only for one machine. Now imagine this situation compounded across multiple internal lines, contract manufacturers and other supply chain partners like raw material providers.
I used a manufacturer in this example, where we could easily be discussing a modular construction manufacturer or even a traditional construction company. The core similarity between manufacturing and construction is the need for material management. In this scenario, a supply chain professional can help unlock capacity constraints (and thus delay the need for equipment purchase) by reducing stock outs with better material planning and lead time negotiations with suppliers. Supply chain professionals can also design improved workflows to reduce manual time spent chasing purchase orders, freeing up time for employees to negotiate better pricing and payment terms with key suppliers and customers. I have seen companies achieve an improvement in cash flow by simply streamlining the order‐to‐cash process where invoices for completed projects are processed internally and sent to the customer for payment quicker. The moral of the story here: get additional value out of your construction operations by hiring a supply chain professional and also be sure to do this type of math when creating a business case or ROI calculation for any technology or process improvement projects.
So where does technology come into play? In the construction space, there are some very common technologies that come to mind when digital transformation is the topic of conversation. Software like CAD and BIM come to mind along with project management and estimating tools like Procore and BlueBeam. Software vendors cite challenges like over and undermanned jobs, unpredictable company growth, high volumes of change orders, slow design cycles, and self‐created labor shortages as challenges that can be overcome by point solutions. But without a systems‐thinking approach that is foundational in supply chain management, especially in S&OP and integrated business planning, digital transformation efforts will continue to fall short.
Countless studies from software vendors and digital applications as well as top consulting firms, like Bain, Deloitte, and McKinsey have all provided evidence of improved business operations and additional benefits from the implementation of digital technologies like employee retention and achieving sustainability targets. We are no longer in a world where innovation and technology are a competitive advantage – they are now prerequisites for business continuity. Some of the most robust research I have found related to technology implementations in the construction industry has been related to project management information systems (PMIS). A 2024 Dodge Data & Analytics study in partnership with ProjectMates detailed improvements in turnaround time for design and budget approvals as a result of PMIS implementations. Moreover, the research data provides evidence of a long‐held personal belief: user adoption is critical to achieving expected ROI of digital implementations. The research shows that increased user adoption of PMIS has positive impacts on the early planning and design stages of a project in addition to other benefits that most end users experience during the construction process, like improved collaboration with project stakeholders.
We know that more frequent integration of design and cost management data and improved processes that occur earlier in the project life cycle can also help prevent certain issues from arising. Incorporating data and analytics with other supply chain tools can help construction managers and owners identify future disruptions before they happen and also create risk mitigation plans to enable operational agility and resilience. Not only that, but PMIS are also a great way for owners to integrate various stages of projects and provide data and dashboards for overall portfolios, not just individual projects – something we call rollups and drilldowns in operational dashboards in supply chain and enterprise planning.
Where project management systems often help to provide up‐to‐date and accurate data that can help everyone stay on the same page, track and understand data to help make quick decisions, and help predict unexpected changes and track potential risk, supply chain planning and execution systems can enhance these benefits by adding in layers of what‐if scenario planning and simulations. One of the biggest challenges with large construction and capital projects is the frequency at which disruptions occur. And many of these disruptions are related to the supply chain. In order for construction projects and programs to be able to respond with agility to unexpected challenges, owners must keep information systems top of mind in order to effectively address these challenges. These systems help provide predictive analytics to reduce firefighting and increase the ability to mitigate risks when a disruption or potential disruption is detected as opposed to reactively, trying to understand how to respond to that risk after it has occurred. Digital tools not only help us understand how to execute better tactically in a day‐to‐day or week‐to‐week view but can also help achieve overall strategic goals like improvements in quality and sustainability.
However, the systems do not work without people. One of the things we often say in the digital space, especially with all of the discussion around AI, is that AI is not actually smart in the way that it is being used right now. AI cannot recognize when it is providing us an incorrect answer because most AI models do not understand the context of the outputs or results that they are providing. Digital tools are still very heavily reliant on people with the knowledge and experience to teach the models how to behave and what recommendations and guidance they should be providing. And the most important thing is that without effective user adoption none of the promises of digital will be achieved. In fact, many studies have shown that the 70% failure rate that we experience with technology implementations in the supply chain space is very much related to people. This does not mean that these implementations have failed in that they are not in use at all, or they were a complete waste of time, because they do indeed provide some value. The “failure” rates we are experiencing in today's world of digital transformation reflect a lack of proper expectation setting, as found in a recent PwC study. The failure rate simply means that we have not set the expectations properly with business leaders and that the systems do not achieve the ROI expected. This can be attributed to the fact that we are still implementing digital in siloed point solutions. When we recognize an inventory management problem, we seek an inventory planning tool. When we recognize an issue that we attribute to procurement, we seek a procurement solution. When we recognize a problem with financial or accounting transactions, we look for an improved financial system. In construction, this manifests as BIM implementations, PMIS, or budgeting solutions without a holistic view of the entire company, or even the entire value chain, and the digital maturity of key external partners like customers and strategic suppliers.
The more critical variables that will provide ROI are reskilling and upskilling people, standardizing and defining processes, improving data, and approaching problems from a system or network perspective as opposed to individual departments with separate budgets, metrics, and executive sponsors, who then do not look at the entire system and what a transformation could mean, or even what a change driven by the point solution will mean for the rest of the company and external stakeholders. There are still many companies that have point solutions for different business functions that use Excel for manual inputs. These manual processes hinder productivity and can also impact data governance. Without good data, digital innovation cannot happen, which we will discuss in more detail as we cover data governance principles.
Supply Chain Fundamentals for Construction Management
Understanding the fundamentals of digital supply chain is crucial for companies aiming to upscale and improve profitability. There are three core principles that companies should consider overall:
Sales and Operations Planning
S&OP involves aligning operations execution with the sales and demand plan. Of course, this means there must first be a sales and demand plan, or forecast, as we like to call it. Many companies, especially project‐based ones, overlook forecasting and demand planning. However, even project‐based supply chains should engage in scenario planning and maintain consistent communication with customers and suppliers. This proactive approach helps avoid the reactive state of constantly dealing with disruptions. Will disruptions occur? Absolutely. And forecasting and planning helps to ensure the entire company is better equipped to deal with them.
Strategic Procurement and Sourcing
Let us start by understanding that procurement, purchasing, and sourcing are not the same activities. Strategic procurement involves developing a strategy for critical materials and services, managing supplier relationships, and differentiating between transactional and strategic suppliers. Effective procurement ensures smoother operations and business continuity.
Network Design and Risk Management
Network design encompasses understanding the entire supply chain network, from tier one suppliers to tier “
n
” suppliers; essentially as far into your supply chain as you can go. This knowledge allows for effective risk management by monitoring potential disruptions, such as weather events or labor strikes, or even geopolitical events and policies, and having predefined mitigation strategies in place even when disruption does not occur at an immediate supplier. This proactive approach reduces the need for emergency meetings and allows for seamless execution of contingency plans. In the digital age, leveraging AI to monitor and predict disruptions is essential. However, companies must first map out their supply chain network to enable AI and other digital tools to provide accurate alerts and insights – Remember when we said that AI is not actually smart?
These principles are just the beginning. Implementing and adhering to them can significantly enhance a company's supply chain efficiency, reduce risk, and improve overall profitability. With effective digital supply chain strategies in place, you'll be able to quickly answer questions like:
Where is my material?
When will it arrive?
How will this delay affect my project?
While sales is certainly important to business growth, we are in an age where operations leaders are shining, and supply chain is a critical aspect of operations. Companies focusing on operational excellence are beating sales and marketing‐led companies, something that is unlikely to change in the foreseeable future. Doubling sales is irrelevant (and even harmful) if you are not obsessively focused on cash flow management, have reliable suppliers and vendor relationships, and have efficient shipping and logistics operations and partners.
A recent study by Alcott Global found that 76% of supply chain leaders identified cost reduction and efficiency improvement as well as digital transformation and technology adoption as the top strategic priorities for supply chain. The main concerns for that same group of executives were the following:
Changes in geopolitics and custom regulations
Changing customer expectations and consumer demand patterns
Talent shortage and retention
Emissions and carbon footprint regulations
The construction industry is in the midst of a revolution and these concerns make the need for supply chain excellence even more pronounced. At the Big5 Global Construction conference in December 2023, there was a resounding call to action at the Leader's Summit: we must change the perception of this industry. We can no longer be laggards and polluters.
According to 2019 data from the World Green Building Council, buildings were responsible for 39% of global energy‐related carbon emissions, where 28% of those emissions were from building operations like the energy needed to heat, cool, and power buildings, and the remaining 11% coming from materials and construction. Architecture 2030, a nonprofit, nonpartisan organization established in 2002 in response to the ongoing climate emergency, on the other hand, estimates that the built environment is responsible for as much as 42% of annual global CO2 emissions, where 15% is related to construction materials – where the embodied carbon, or the emissions released during extraction, manufacturing, transport, construction, and disposal, of cement, iron, steel, and aluminum alone make up a large portion of those emissions.
The same organization posits that eliminating all CO2 emissions from the built environment by 2040 will allow us to meet the 1.5° climate target – the level of global warming that the countries who signed the Paris Agreement have agreed to try to stay below. Organizations like the World Green Building Council and Architecture 2030 are working to achieve two important goals:
By 2030, all new buildings, infrastructure, and renovations will have at least 40% less embodied carbon with significant upfront carbon reduction, and all new buildings are net‐zero operational carbon
.
By 2050, new buildings, infrastructure, and renovations will have net‐zero embodied carbon, and all buildings, including existing buildings must be net‐zero operational carbon
.
While these goals are significant, they are not overly ambitious. Studies have shown that anywhere from 20 to 30% of material used for a construction project ends up as waste. Imagine how better material management of those four core construction materials could help us reach these goals.
