The use of localised supply chains should become mandatory if we are to reduce industry emissions, Neeral Shah of Yardlink says
We know that construction bears a huge burden of responsibility in the UK’s transition to net-zero carbon emissions, as well as other sustainability targets. A contribution of almost 40% of total current emissions means the overall outcome of the transition rests, in large part, on the industry’s shoulders.
As it stands, however, construction firms are struggling to make the necessary changes associated with that responsibility. And the challenge is more prolific than one might expect.
In a recent Association for Project Management survey, 50 per cent of construction project managers confessed that their companies were doing “little” to meet net-zero targets Similarly, YardLink’s independent research of procurement decision-makers at UK construction firms found sustainability commitments presented one of the biggest challenges for senior procurement managers today.
The role of construction supply chains
But despite the enormous scale of the net-zero challenge, there are many potential options for the industry to “go green”. It can introduce sustainable, bio-mimetic building designs, for instance. It can also improve the sustainability of waste disposal or divest from fossil fuels by switching to electric equipment, where possible.
In fact, because the industry is resource-intensive, many of the most popular solutions will relate in some way to consumption – whether that is oil, precious metals or water.
Yet, the greatest challenge is that the industry relies on forces outside of its control to implement these solutions. Electricity, for example, is not a pick ‘n’ mix. Construction firms cannot simply choose to consume energy produced by wind. They can choose to use electric equipment where possible, but it relies on manufacturers to introduce cost-effective and functional designs.
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Concrete stands as a massive barrier to the net-zero transition, resulting in 2.8 billion tonnes of carbon dioxide per year; but construction firms cannot do much about it until somebody develops a suitable, scalable alternative.
There is, however, one major area that lies within construction firms’ control: their supply chains. Construction firms make the ultimate decisions about where they source their materials and equipment, how far materials and equipment travel to reach them, and how they manage them.
This presents a serious opportunity for businesses to reduce their carbon emissions and introduce more sustainable methods of operation. It also presents a worthy opportunity to reduce delays, which in turn can help to decrease costs and increase profit margins.
Making supply chains localised
The starting point for firms wanting to take advantage of the opportunity construction supply chains offer is to employ a localised approach to equipment and material procurement. Our research revealed that the average piece of equipment travels 62 miles to reach a site.
With the average project sourcing 167 pieces of equipment, and hire always involving a round trip, the total average distance travelled equates to 20,708 miles per project.
The transportation of equipment and materials across long distances throughout the country is not only causing construction firms to emit more carbon emissions – it leads to project delays. Last-mile delivery has been a problem for 28% of procurement managers. Delivery drivers losing their way has caused delays for 29% of construction firms. These delays add up, financially.
Technology can enable procurement managers to understand what is available locally. This way, they can plan more meticulously but without the increased time investment
Despite the clear opportunity to reduce carbon emissions through supply chains, construction firms are not currently grasping it. Truth be told, supply chains are often being overlooked.
That is because there are enormous, daunting barriers standing in their way – a lack of time and resources. But, there is only one way around it: technology.
Technology can enable procurement managers to understand what is available locally. This way, they can plan more meticulously but without the increased time investment – as opposed to relying on historic supplier relationships which can cause equipment and materials to travel excessive distances.
Yet, for the industry to fully embrace the opportunity which localised supply chains offer, it is time the distance equipment and materials travel was mandated. From speaking to construction firms up and down the UK, some are actually starting to place internal mandates on the distance supplies can travel. But this simply is not enough given the looming net-zero target. We need regulation, and we need it quickly.
Neeral Shah is the founder and CEO of Yardlink