Housebuilding

Top tips to manage supply chains in a challenging market

Supply of materials and rising prices are affecting all sectors and, in these challenging times, having good relationships with suppliers and merchants is more important than ever.

A series of unprecedented issues including Brexit, the pandemic, war in Ukraine and escalating global demand have caused supply chain issues, including shortages, delays in delivery and steep inflation.

According to the Construction Leadership Council, cost increases of 50% have been reported for some products in recent weeks.

With construction and housebuilding primed to play a key role in the nation’s economic recovery post-pandemic, the industry body has set out plans to mitigate against price hikes hitting companies across the sector. These measures include:

  • Developing market intelligence about risk hotspots
  • Publishing guidance on price inflation indexation and commercial issues
  • Preparing case studies on good practice in response to current inflation
  • Running industry briefings on conflict avoidance
  • Researching long-term capacity loss from Ukraine, Russia and Belarus
  • Impacts on the sector

At Castle Green, we’ve seen increased lead-in times for key materials and prices rising on an almost daily basis for some products. We’re working hard to ensure site teams have the subcontractors and materials required to construct our homes.

Here are our top tips to helping maintain supply chains in these challenging times.

Planning

Forward planning and ordering materials well in advance of when they’re required can help mitigate against two risks – delivery delays and future price rises. Working with the planning and construction department, our commercial team looks at the build programme to order materials early enough to ensure we have sufficient stocks on site to achieve our targets.

Preparation

Being prepared to tackle issues such as supply chain disruption or rising costs is key. This can include having an alternative product or supplier in mind or moving materials from one location to another while you wait for a delivery.

Communication

It’s important to have clear lines of communication with supply chain partners. This can help ensure any potential issues in terms of delays to deliveries or price increases are identified as early as possible.

Economies of scale

As a business grows, managing the supply chain can actually get easier and more cost-effective. As you increase the size of your orders, it’s likely you’ll be able to access better deals and potentially preferential treatment. Previously we’d build 20 or 30 homes on a site and now it’s 145 at Willow Fields in Warrington and over a 100 on our partnership development with Adra in Prestatyn. This means order values are increasing, but a site of 20 and a site of 100 require the same input from the commercial team.

Selected industry experts bring you insight and expert advice, across a range of sectors.

Subscribe for free to receive our fortnightly round-up of property tips and expertise

Selected industry experts bring you insight and expert advice, across a range of sectors.

Subscribe for free to receive our fortnightly round-up of property tips and expertise

Name*

Sign up to receive the Place Daily Briefing

Join more than 12,000 property professionals and receive your free daily round-up of built environment news direct to your inbox

Subscribe

Join more than 12,000 property professionals and sign up to receive your free daily round-up of built environment news direct to your inbox.

By subscribing, you are agreeing to our Terms & Conditions and Privacy Policy

Name*
Would you also like to receive our free PlaceTech Weekly newsletter, covering innovation in property?*