The biggest fear for contractors – is supply chain fragility

Over 90% of contractors claim that their greatest fear is disruptions in logistic chains, including rising material costs and the inability of subcontractors to fulfill their obligations. These research results were shown by the organization RLB. It is noted that the fear of supply chain disruptions dominates over other issues, such as a shortage of skilled workers.

Main source: Fear of supply chain failures boosting collaboration

Why contractors cannot fulfill their obligations

Different factors influence that. First of all, it`s increasing material costs. As a result, suppliers must pay more money, and delivery is determined.

Suppliers have also shown an improved appetite for sharing risks as the climate switches from managing toward investing in the supply chain.

RLB research has also shown that 54% of suppliers show an increase in collaboration in purchases, while 35% are ready to divide risk.

And the last reason – is the increasing guarantee obligation cost. Due to this, 23% of factories place fewer bonds because clients cannot pay for them.

Which consequences this may have

The risk of disruption of supply chains has several downsides. First of all – it increases the cost of final projects. Building companies will spend more money, and the project’s final price will increase.

The second reason – is a time delay. If suppliers cannot perform obligations, the project delivery time will be shifted.

And the last reason – is the deterioration of reputation. Companies that cannot perform the undertaking over time will have a worse reputation and fewer customers.

But this situation has an opposite side. It forces building companies to extend collaboration with other suppliers.

Conclusion

To summarize, supply chain failures are a big problem that influences the building industry. But every crisis gives new possibilities for the industry. Fencyx, as one of the leaders in the building material market, from its side makes it all possible to perform its obligation.

Read also: UK Projects of Social Houses at Risk Due to Financial Problems