Crunch Time in the Construction Industry
Date Posted: March 1, 2022
Posted In: Discussion,
From AreaDevelopment: It’s no news that lingering supply chain disruptions and inflationary pressures have forced project teams across the U.S. to shake up their procurement and delivery processes. The projects of today are rife with risk, as supplied materials’ lead times and pricing have proven to be no longer as reliable as in past years.
Design-build has become an invaluable resource in the current environment, as earlier designs and contractor “onboarding” have become increasingly vital to keeping cost and time factors under control. Design-build gives project teams the flexibility they need for developing creative solutions and ensures proper alignment between the various members of the team.
In that regard, companies like Clayco are utilizing their intellectual capital like never before by thinking further down the road and “future-proofing” the delivery of their projects. By being in complete control of engineering and procurement, they’re able to offer comprehensive, cost-effective options for tackling the unique challenges of today’s projects.
A New Variable
For years, the owner-designer-contractor conversation around materials was primarily about cost and vendor alignment. Now, there’s another, more urgent, variable — lead time. For most projects, the lead time for products is much longer than traditional timelines and can vary significantly between vendors. Therefore, design, procurement, and project team onboarding must occur earlier in a project’s life cycle to ensure there are fewer wrinkles down the line.
Some of the more radical approaches have been in procurement, whereby the entirety of a project’s materials and equipment is ordered directly by the project team long before groundbreaking. A project’s steel erection package, for example, would have had an 8–10 week lead time prior to the pandemic. Now, the lead time for those same products is six to 10 months. While it doesn’t take that long to fabricate the steel, much of the front-end design must be completed earlier to lock in mill pricing and ensure a position in the “queue” for a future rolling slot.
For example, Clayco’s integrated model and in-house engineering capabilities enable it to design and procure many components — such as steel, roofing, electrical, and mechanical elements — much earlier in the process. The company can size major equipment, get quotations on lead times, and place orders long before detailed design is complete and subcontractors are on board. Case in point, at a high-rise project in downtown Phoenix, Clayco brainstormed with its project team to develop a strategy for procuring and storing the entirety of the construction materials for the project — even custom millwork — long before breaking ground.