Disruption to Supply Chains Driving Innovation in Construction

Given its reliance on a global supply chain for access to materials, workers, and other goods, the construction industry was significantly disrupted by this year’s pandemic.

In a recent webinar about carbon sequestration in the building industry, Carl Elefante, the 94th President of the American Institute of Architects, discusses how the pandemic has altered the status quo in the industry. 

Today, organizations must find different, better ways to build in the face of change. This new frontier of post-COVID-19 construction presents fresh opportunities and increased market share for ready mix concrete producers.

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Supply Chain Impact Driving Innovation

Shortly after COVID-19 struck, disruption to the global supply chain became evident. For the construction industry, this resulted in the suspension of production and manufacturing activities, restrictions around travel and imports, closure of work sites, and compliance requirements around hygiene, quarantine, and social distancing.

Suddenly, trusted suppliers were no longer available, material that was in transit disappeared, and projects stalled.

Some parts of the US construction industry is reliant on international shipments of materials, including steel, copper, and aluminum from China. In February, the Port of Los Angeles reported a 23 percent year-over-year reduction in shipping containers due to the shutdown of Chinese manufacturing facilities.

It was presumed that a reduction in material availability would result in aggressive purchasing patterns and the potential to drive up national prices for goods. We're now seeing this impact reflected in the increased price of copper, aluminum, and other materials. We have also seen a slowdown on many projects due to an inability to procure these materials.

Shifting to a Regional Supply Chain

The pandemic has driven home the need to rebalance the supply chain from an efficiency-based model to one of resilience. Contractors are building inventory, identifying alternative suppliers, and shifting to locally-sourced materials wherever possible to reduce reliance on long-lead items from an unstable supply chain.

This reliance on locally-sourced suppliers and materials has provided a unique opportunity for concrete producers to increase market share and grow their businesses. 

As a locally-sourced material, ready mix concrete has minimal dependencies on the global supply chain. It is cost-effective, readily available, strong, and durable. Most importantly, the materials, manufacturing facilities, and labor required to produce it are all local. 

Carbon-Neutral Material via a Regional Supply Chain

In parallel to the supply chain issues this year, another fundamental shift occurred within the industry: the introduction of a new model building code. The zero-carbon code was validated in April 2020 by the International Code Council. 

The code sets a new standard that will help cut carbon emissions. As more cities adopt the new code standard, contractors will be under increasing pressure to source low carbon or carbon neutral material for these projects. 

This presents a perfect opportunity for concrete producers, who can leverage the combination of the zero-carbon code and a disrupted supply chain to reinforce their position as reliable, local suppliers of low carbon concrete. 

As one of the most agile building materials in use, low carbon ready mix concrete fits the new code requirements perfectly. Producers can easily implement CO₂ technology to lower emissions, integrating the new process into existing production workflows in a matter of days. The process involves four simple steps to chemically convert CO₂ into a mineral in the concrete, permanently removing it from the atmosphere. The mineralization reduces embodied carbon in new builds, allowing ready mix concrete producers to provide contractors with a locally-sourced material that complies with the new zero-code standard.

Lasting Change 

2020 has been a pivotal year for the construction industry. Changes that were already taking place in the industry—digitization, the move to performance specifications, the adoption of sustainability initiatives—have been accelerated in the face of volatile supply chains and new policies.

The acceleration of these trends will help the industry pivot and reinvent new and cleaner ways to build. 

Ready mix concrete producers who are flexible and strategic in their practice can play an important role in the industry's future. Along with expanding business opportunities, these stakeholders can lead with innovation, making concrete construction the center of a carbon sequestration strategy for the world.

Watch the on-demand webinar to learn more.