#Supply chain issues 2021 how to#
#Supply chain issues 2021 professional#

Now, more and more builders are interested in experimenting with these types of processes. In 2019, the company acquired Raney Construction, an innovative offsite construction company that reduces time and labor in the home building process. All rights reservedīuliders FirstSource also is experimenting with robotics to create more automation in the process. Jackson says the company is actively expanding manufacturing facilities across the country and signing new ones with regularity now, providing open ended truss systems, roof trusses, wall panels and other products that take work off the job site for more efficiency.Ī high-speed interior door line at Builders FirstSource in Colorado is another investment in. Peter Jackson is the CFO from national distributor Builders FirstSource and says that its manufacturing has increased 50% since the beginning of the year as builders look for ways to take time out of the build cycle with prefabricated solutions.

#Supply chain issues 2021 how to#

The challenge continues to be how to develop solutions that strike the targeted balance between effectiveness, agility, reliability, speed, visibility, and cost.Īs builders try to reinvent themselves and take more control of the supply chain, distributors are taking on more risk and adding more value in other ways. Many builders are not in a position to make these sweeping changes to materials. We also make kitchen cabinets with high performance surfaces, which puts us at a very strong advantage.”

Now the wood is not just the wood, resins are in shortage as well because of the factories shutting down in Texas and are not back in production.

“A lot of the materials that are challenging other builders practically don’t exist for us,” Haller said. His building process is unique and doesn’t rely on the materials that the rest of the industry relies on. That’s a typical tech practice.”Īmit Haller is founder and CEO of another home building company Veev and he has found ways to be avoid the shortages in the supply chain impacting the industry. You should help them become part of the strategy and objective, and maintain close relationships with the management of the company.

#Supply chain issues 2021 professional#

“It requires buy in and support that you can’t get without a personal and professional relationship.

“To drive innovation, you have to get partners to buy into the mission,” Leung said. He also suggests building strong, strategic relationships by choosing partners carefully and sharing your vision and private data with them, which is more difficult to do in the housing industry because it is more transactional and less collaborative. If you have data to see if the increase in demand is actual consumption or panic buying, that’s a very important tool.” “What you can do is manage different tiers and differentiate between users and consumption and not just fear and stocking up. “For example, home starts have increased but not quadrupled, while pricing has,” Leung said. One area he suggests housing leaders could improve is looking at the situation to differentiate between end user demand and actual consumption. In the lumber example, suppliers could proactively smooth out the peaks and valleys if they had the right information, but he says access to data in housing isn’t sophisticated enough. Leung says the antidote to bull whip effect is more information. It starts with a small disruption, and gets amplified with customer buying behavior. The increased production can then lead to a glut of lumber, which would then lead to dropping prices. Builders started to fear a shortage, they stocked up, it exacerbated the shortage, prices went up, then manufacturers ramped up production. It has lots of blind spots, which makes it difficult to manage and it can cause bullwhip affect.”Ī good example of the bullwhip effect was lumber during the pandemic. The building supply chain isn’t as advanced.

“In technology, over decades of management, there is a great deal of information and stakeholders have learned to use data to make decisions on supply chain visibility and inventory, which means it can be managed better. “Supply chain management is all about information and decision making,” Leung said. He says that technology has a much more global supply chain and that it has a lot more components than housing, pointing out that housing is much simpler. Greg Leung is the CEO of Connect Homes, a California-based builder delivering high-tech housing solutions, who also spent more than a decade at Apple as senior director of worldwide supply demand management. Tancula believes this increase in labor costs will likely constrain market growth.Īs a temporary fix, some service-oriented categories have tried paying people at the end of the day or the end of the week to entice them to show up. Some have started to offer higher wages, spending more to attract and keep workers, even offering sign-on bonuses. With that growing demand, manufacturers are investing more in labor.