Construction logistics and ordering costs
Efficient planning of materials procurement and storage used to be an important task directly linked to project profitability. Inland companies had the luxury of:
- order smaller quantities of material;
- order more frequently;
- minimizes the locked-up capital in material inventories;
However, it is no longer the case: this modus operandi in the current situation will simply mean material shortages and project delays.
While companies that are working in an island have to face firstly a critical stage of planning and then have to:
- order larger quantities of material as they need to be imported from overseas producers;
- pay higher transportation rates;
- wait longer for the delivery;
- face storage concerns;
- have a huge sum of capital is locked- up in inventory.
Lately, most foreign and domestic manufacturers of construction materials stopped or slowed production because of the pandemic restriction, the lack of production is turning into material shortages or rationing.
Importing construction materials in this time of shortage can quickly translate into construction delays.