As the construction industry shifts to greener building materials, it is facing unprecedented supply disruptions. In the steel supply chain, higher import costs and supply shortages caused by the global pandemic are causing supply mayhem for some construction projects. But where there is inefficiency, there is also opportunity. The growing demand for sustainable steel introduces an opportunity to re-engineer the steel supply chain. The more ecologically minded supply chain places partnerships and collaboration at the core of value creation. Stronger supply chain integration (SCI) is lowering fulfillment risks and improving predictability from steel distributors through to construction projects.
At the nexus of the steel supply chain, steel distributors are realigning around sustainable values to improve efficiencies and lower costs. More sustainably focused steel suppliers and construction companies are open to collaborative supply chain integration (SCI) solutions. Deeper SCI is fundamental to lowering a supply system's environmental impact. One of the most important outcomes of supply chain collaboration is the Environmental Product Declarations (EPD). EPD has had the largest influence on the construction industry. The declaration of LCA standards of construction materials are used to evaluate the environmental performance of buildings. These standards ensure compliance with the many ISO steel specifications.
Sourcing new, sustainable materials is an opportunity to reinvent the stockless supply system. Since lean focuses on partnering and cooperation throughout the supply chain, the 'Toyota way' is an opportunity to re-imagine relationships and system processes with steel distributors like Advanced Metal Sales LLC, logistics suppliers, and warehouses. The focus of sustainable steel materials production and use on reducing waste and recycling adds more value by reducing carbon footprints and costs. At the same time, green steel options are improving the durability and recyclability of construction materials. Structural steel and carbon steels, as examples, have a lower environmental impact in production and longer durability in products.
Just-in-Time (JIT) Steel Delivery
Whereas lean focuses on creating value, JIT improves efficiencies. With a goal of improving efficiencies, more construction companies are demanding just-in-time deliveries from their steel distributors. The steel industry has reached an impressive 96.3 percent efficiency rate for the recovery and use of steel byproducts. JIT programs reinvented with sustainability and circularity in mind will minimize even more waste.
Tighter integration of the steel supply chain increases the value proposition of steel distributors and suppliers doing business with construction entities in their chain. At the same time, the opportunity cost of their switching to other customers is higher. This relationship provides the construction business with improved supply, retention, and pricing leverage.