By: Rich Uphus | May 8, 2023
ARTICLE - The construction sector operates under constant pressure, juggling a delicate balance of supply and demand. Both extreme material shortages and premature deliveries can disrupt this equilibrium, leading to project delays, increased costs, and unnecessary strains on all stakeholders involved. This article delves into these challenges and discusses how FullClarity Construction for NetSuite, a premier cloud-based ERP solution, is transforming the industry landscape, particularly for mid-market construction firms.
The Extent and Impact of Material Shortages
According to the Associated General Contractors of America (AGC), a staggering 93% of construction firms experienced project delays due to material shortages in 2022. Unpredictable factors such as labor disputes, extreme weather events, and market fluctuations often trigger these shortages, causing severe ripple effects throughout the industry.
These ripple effects are not to be underestimated. The National Association of Home Builders (NAHB) reported that 75% of construction projects exceeded their original timelines in 2022, leading to a 20% average increase in total project costs. This scenario places immense stress on subcontractors, who often work on razor-thin margins and depend heavily on the timely completion of projects.
Premature Deliveries: A Hidden Problem
Conversely, premature deliveries of construction materials can create different issues. The NAHB found that 20% of all construction project delays in 2021 were due to materials arriving before their planned delivery date.
Premature deliveries force companies to allocate resources for storage, adding unnecessary costs and complicating project management. Furthermore, early deliveries can lead to material damage and spoilage, especially for sensitive materials like cement, which require specific storage conditions. These factors can exacerbate project delays and contribute to an additional 15% increase in project costs.
Harnessing FullClarity Construction for NetSuite
Amidst these industry-wide challenges, technological advancements offer a beacon of hope. FullClarity Construction for NetSuite built on the world's leading cloud ERP, brings a holistic solution to these issues, particularly for mid-market construction firms.
By integrating procurement, project management, and financial management into one unified system in the cloud, FullClarity Construction for NetSuite enables firms to manage their supply chain effectively. This proactive management helps ensure on-time delivery of materials and reduces storage costs.
FullClarity Construction for NetSuite provides real-time visibility into material availability, helping to predict and mitigate material shortages. With such analytics, firms can plan for contingencies, maintain project schedules, and decrease the risk of project delays by up to 30%.
The Automation Advantage
Automation is another powerful feature offered by FullClarity Construction for NetSuite Automated procurement and inventory management optimize the material ordering process, ensuring just-in-time delivery and reducing the risk of premature deliveries by an estimated 25%.
By automating administrative tasks such as order placement and inventory tracking, FullClarity Construction for NetSuite lightens the workload for subcontractors and suppliers, allowing them to focus on their core tasks. This shift can significantly increase productivity, with studies showing a potential rise of up to 20%.
Moreover, automated financial processes enable real-time cost tracking, enhancing budget compliance and financial forecasting accuracy by up to 35%. This transparency builds trust among stakeholders, fostering stronger relationships between construction companies, subcontractors, and clients.
Proven Path Forward
In the challenging construction world, where material shortages and premature deliveries can disrupt project timelines and inflate budgets, FullClarity Construction for NetSuite emerges as an indispensable ally. Its ability to harness the power of cloud-based ERP and automation mitigates these challenges and propels operational efficiency and profitability.
As the industry evolves, embracing such technological innovations will be critical for construction companies to remain competitive. FullClarity Construction for NetSuite encapsulates this future of seamless integration, real-time analytics, and intelligent automation. The construction industry's terrain may be rugged, but with the right tools, it is also ripe with opportunities. For construction companies looking to navigate this landscape successfully, FullClarity Construction for NetSuite is a proven path forward.
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