Over 90% of contractors claim their greatest fear is disruption in logistic chains, including rising material costs and the inability of subcontractors to fulfil obligations. Research by RLB found that supply chain disruption dominates concerns over the shortage of skilled workers.
- Rising material costs make delivery and project pricing less predictable.
- 54% of suppliers reported increased collaboration in purchases.
- Supply failures cause higher costs, delays, and reputational damage.
- The crisis is encouraging closer collaboration between companies and suppliers.
Why contractors cannot fulfil their obligations
Different factors influence this. Increasing material costs mean suppliers must pay more, and delivery is affected. Suppliers have also shown an improved appetite for sharing risks as the climate switches from managing towards investing in the supply chain.
RLB research showed that 54% of suppliers increased collaboration in purchases, while 35% were ready to divide risk. Increasing guarantee-obligation costs also mean 23% of firms place fewer bonds because clients cannot pay for them.
Which consequences can this have?
Supply chain disruption increases final project costs and can shift delivery dates when suppliers cannot fulfil obligations. Companies that cannot perform commitments on time may suffer reputational damage and lose customers.
However, the situation also forces building companies to extend collaboration with other suppliers. Fencyx makes every effort to fulfil its obligations as a leader in the building materials market.