Like the last marathon runner to cross the finish line, the construction industry has finally caught up to learning the benefits and possibilities of e-commerce. A typical large building may require thousands of separate drawings, modulations in manpower and extra material to complete the job. It is in this last item that the power of e-commerce can truly shine. The old days of a construction manager sitting in a trailer on the phone calling suppliers to try to find the right price and the fastest way to get that material to the jobsite has gone the way of the manual typewriter. E-commerce not only saves money, but also greatly reduces completion times. The ability to open a laptop or pull out a smartphone and instantly search vendor sites for supplies has revolutionized the industry.
Despite this convenience, many construction companies still insist on sticking with the old ways. They would sooner go to a physical auction to see the materials at hand and bargain for the right price than make a major purchase that is vital to their project with a few clicks. Fortunately, many are finding that not only is there nothing to fear, but it can also be refreshing and profitable. E-commerce provides a way of purchasing needed material in minutes, and can use that same speed to cancel, modify or change the location of an order.
Construction is a mobile business. Managers and planners must often conduct business on the jobsite. Today, one of the most important factors in landing a project and keeping the customer happy is nimbleness. This is the ability to produce quotes, shift priorities and goods and process orders rapidly in order to meet the customer’s demands. Nowadays, being a big company with impressive credentials no longer cuts it. You must also be agile and quick to respond to customer inquiries. The bottom line is always at the door.
The same companies that were recently resisting change are now partnering with e-commerce companies to produce the most cost-effective business model possible. This has been demonstrated in a higher customer retention rate and lowered final cost. No customer will ever complain because you are under budget.
E-commerce has improved the management and delivery side of the industry, too. Managers are now free to concentrate on the actual building process, while goods can come directly from their e-distributors. This has helped smaller businesses that could not afford a large office presence to support them in the field by obtaining the needed materials while simultaneously reducing the company’s overhead. It’s no wonder that many smaller construction companies are investing heavily in IT, whereas, in the past, those same funds were allocated to transportation and administrative costs.
Another benefit of e-commerce is the elimination of waste. Over the last ten years, some of the bigger buzz words involve going green. E-commerce allows the concerned project manager to easily seek out environmentally friendly materials among the vast array of products available. This not only makes sense from a stewardship standpoint, but it is also a great public relations vehicle for companies who may have been struggling with their reputations.
While construction will never be viewed as a boutique industry, e-commerce options are taking it to a higher level of awareness among those in other areas of business. There are other areas in which e-commerce can have a major effect on a company’s bottom line.
Although the construction industry has always had some kind of computer-assisted design involved in bigger projects, building software has evolved far beyond rudimentary blueprint graphics. Building Information Modeling (BIM) has added a new dimension in construction, allowing for 3-D images of building infrastructures and alerting managers to problem areas. This has greatly reduced delays and cost overruns, and has made prospects less reticent to sign on to big construction projects. In addition, it has eliminated waste by allowing subcontractors to input vital information into the model before construction, which allows them more precision in the manufacture and assembly of their assigned project.
E-commerce and BIM can work hand in hand. BIM can help project managers be more precise in what materials they need, enabling them to order the goods almost immediately, with fewer worries about over-ordering or RTVs (return to vendor).
While many industries have already gotten on board the e-commerce train, construction has been a little slow to realise the benefits it can reap from making e-commerce its primary source for material procurement.
If industry trends are any indication, though, e-commerce is bringing the days of higher productivity and lower costs to the forefront.
by Joseph M. Bianchi