As the Active Building Centre prepares to host a summit on the construction supply chain, ABC Industrial Engagement Lead Dr Tony Eccott takes a look at some of the issues and how the ABC is addressing them.
Our supply chains are under pressure like never before. The coronavirus pandemic, labour shortages, the energy crisis and wider inflationary pressures mean that costs are constantly fluctuating and are more unpredictable than ever before.
In the face of such uncertainty, it’s tempting for those of us involved in construction to ditch our commitments to net zero. However, at the Active Building Centre, we’re bringing together leaders from across the industry to understand how we can meet the issues which the supply chain poses in a way which doesn’t counteract our environmental goals.
ABC’s mission
At the ABC we’ve been focused on demonstrating how, despite these issues, it is still possible, and, crucially, cost-effective, to build houses which meet the highest energy standards and actually act as net contributors to the gird. With the completion of our third demonstrator home at our site in Berkeley last autumn, we showed again that you can build homes with a large number of new technologies even as the supply chain continues to contract and change in new ways.
We’re holding our summit on the supply chain this week to impart those lessons to a wide group of our current and future partners and, more importantly, to learn from them, too.
From what we see, there are three clear, major challenges stemming from the wider factors I’ve already mentioned, which we all – housebuilders, suppliers and buyers – will need to address in the future.
Commodity crunches
First, we’re seeing ever expanding timelines when it comes to the availability of the components and commodities which are used to create the energy systems which we work on at the ABC. By combining different products and concepts, we can make them work together to minimise energy consumption in a building, and actually generate energy in the process. However, these heat pumps, batteries and solar panels all come at the end of long, complex supply chains.
With the availability of raw commodities like nickel, lithium and copper constricted, prices are unpredictable and there are often long delays in sourcing the parts which housebuilders need to align their projects with their net zero goals. For instance, where lead times may previously have been a matter of a few days, we’re now seeing our partners facing times of weeks or months, with a wait of over 100 days being commonplace. So it’s vital that we come up with new ways of using existing, easier-to-source technologies, to circumvent these roadblocks in the supply chain.
Skills gap
Secondly, our supply chains are not immune to a problem which you’ve no doubt noticed in the wider economy: a major shortage of labour.
We’re seeing skill gaps across all major industries as the labour market simultaneously recovers from the pandemic and faces the consequences of persistently high inflation for the first time in decades. Put simply, this is leading to businesses being unable to staff their operations properly.
Given the high levels of specialism required to manufacture the technologies which we and our partners use, the labour shortage is especially acute for construction. Rethinking how, as an industry, we train, recruit and retain people will be a key topic in our discussions with industry leaders for a long time to come.
The economic case
And, finally, both of these issues, as well as the broader geopolitical disruption which is a constant backdrop to everything we do, mean supply is constrained and so, in the end, the prices which we all pay to suppliers are higher. Cost effectiveness is at the heart of our work at the ABC. We are dedicated to showing how technologies and ways of thinking can be combined to make homes net contributors to the grid while simultaneously reducing homeowners’ costs: we’re focus on being kind to the planet and your pocket.
Ultimately, of course, these higher costs are symptoms of the broader issues I’ve already mentioned. But that doesn’t change the fact that we will all have to be smarter about how we work and build in reaction to them. This is probably the key issue which we expect to drive much of our discussion on Tuesday.
Together we can do this
So, the issues we face in the supply chain are clear. Of course, there aren’t any easy answers to these questions. But at the ABC, we’re driven by forming partnerships, bringing together our contacts from across industry to work together and find new solutions.
The supply chain poses a lot of problems, but I’m confident we’ll solve them together.