Construction companies are used to dealing with supply chain disruption. Large projects are often planned years in advance with contingency built in and most contractors are adept at finding workarounds to keep them on track.
That meant the industry bounced back from the pandemic better than some other sectors. However, the supply chain crisis that followed created serious shortages of labor and raw materials which are only now easing.
Meanwhile firms are dealing with a range of emerging challenges from inflation to geopolitical and climate risks.
To find out how the sector is navigating a changing landscape, we surveyed 100 risk and supply chain leaders engaged in construction activities ranging from residential and commercial to large infrastructure and civil engineering projects globally, and project management.
How do they see the supply chain landscape? How are they building resilience? What are the main challenges and risks they face? And what will the supply chains of the future look like?
As we’ve discussed, large construction projects today are bigger and more complex, with more contractors and longer supply chains than in previous decades.
These changes have widened the range of supply chain risks that construction companies face, from climate change and geopolitics to cyber security.
80% businesses said they have made at least some improvements in their approach to supply chain management in response to the pandemic.
66% agreed or strongly agreed that a lack of suitable alternative suppliers restricted their ability to implement an effective dual or multi-source strategy.
84% cited a lack of insurance solutions among the greatest challenges to addressing their risks over the next three to five years.
71% named natural resources as the environmental factor posing the greatest supply chain risk to their business.
Construction isn’t like other businesses. To some extent, new supply chains are created each time a project is started.
Along with the increasing scale and complexity of large schemes, this creates more potential for things to go wrong.
Over the last few years, even the most meticulous planning has fallen victim to supply chain disruption, causing delays, losses and in some cases, cancellations.
Added to the risk of further shocks, the sector also needs to juggle a range of external factors, from cyber threats to geopolitical instability, climate and sustainability.
Our survey suggests that businesses are working to overcome problems and considering a range of strategies to increase resilience.
But they’re hampered by a lack of appropriate insurance solutions and the data needed to accurately assess and manage their risks.
Working more closely with sub-contractors and suppliers can help companies understand their supply chains better and address these risks.
Diagnostic mapping and monitoring tools and analytics can help to visualize, quantify and assess risks across the chain and in specific locations.”Gunjan Sinha | Head of Property and Casualty, India WTW
Diagnostic mapping and monitoring tools and analytics can help to visualize, quantify and assess risks across the chain and in specific locations.
WTW has an experienced team of experts with the tools and competencies to help clients understand their supply chain vulnerabilities and align their operations to reduce financial risk.
We can also help you manage and transfer risks for both property-related and pure economic losses, helping you build greater reliance against future shocks.
To learn more, download your free survey report by completing the short form at the top of this page.