As businesses across New Zealand and the world move to protect the health of their workers amongst the hype surrounding COVID-19, those in the construction industry have another burgeoning fear. How will coronavirus affect building materials? Will supplies be harder to get, and if so, what kinds of products?
The current panic is affecting publicly-traded world markets, for sure, but the international supply chain for building materials (from private companies) won’t be exempt from stress.
Two major causes of supply chain issues will be planet closings and travel restrictions, especially out of China, but also other affected production nations like Italy. It’s from here that many trades source materials such as tiles, plumbing products, kitchen and bathroom products, lighting, and so on.
However, construction businesses in New Zealand are going to be able to weather this storm with good communication. This will include assessing whether any suppliers are having shortages in services, materials, or component parts, and finding alternatives.
This can be done with a supply chain audit. Rather than narrowly focusing on products sourced in and around Wuhan province – the COVID-19 epicentre – the industry should assess its reliance on all of China and any other largely-affected countries like Italy, South Korea, and Japan.
This includes finding out about third parties and partners, and an audit should look to identify possible shortages (of both raw materials and finished products). New Zealand suppliers should also project for price increases – which will be seen well after this virus is contained.
We’ve already seen many suppliers proactively reach out to us. E-mails with messages such as “All our factories are back at capacity and we currently have no issues with stock availability. We have good stocks in most items and current orders are in process… we would like to reassure you that there are currently very limited manufacturing or shipping delays,” prove very helpful at this time. It’s beneficial to tell people how reliant on China you are and what you plan to do to mitigate issues. If you’re in the position to reach out to your clients about your stock level, it’s the smart thing to do right now (and keep doing it for the foreseeable future).
This is an ongoing and ever-changing crisis. However, a catastrophic aftermath can be prevented if we come together as an industry, to build up alternate capacities and form a more resilient supply chain for what’s to come.
