With New Construction, Weak Links in The Supply Chain Mean Long Waits For Completion

Remember the phrase your seventh-grade football coach would repeat over and over as he was sitting in the shade while you’re doing rolls up and down the football field because John Ridd thought it would be funny to “moon” someone (who turned out was the coach’s wife) while on the school bus coming home from another loss?

I do.

“You’re only as strong as the weakest link!”

At the time I didn’t quite know or care what that meant. I just remember being itchy and wanting to punch John in the arm as hard as I could.

“You’re only as strong as the weakest link”

Welcome to the world of new home construction in the COVID/Post-COVID world. There seem to be many weak links these days.

Supply Chain Management

What exactly is supply chain management? According to our omniscient overlords at Google:

“Supply Chain Management is a system of organizations, people, activities, information and resources involved in supplying a product or service to a consumer. Supply chain activities involve the transformation of natural resources and raw materials and components into a finished product and deliver to the end consumer.”

OK, that seems pretty simple. Start with raw material, send it someplace to get refined, they send to another place to make it into a part, and they send it somewhere to put it with a bunch of other parts to become one bigger item that gets shipped to the company that is going to take the item and use it to build a home.

Did I get it right?

For nearly forever, that process worked without the consumer paying much attention. All we U.S. Americans care about is the end result. Were we able to go to the store and buy the product we wanted?

COVID-19, SNOWVID-21, And a Stuck Ship

In 2020 we had this COVID-19 thing that pretty much shut down the global supply chain. Weak links popped up all over the place. In the home building material industry, basic items like paint, glass, insulation and lumber became difficult to obtain because somewhere a few links earlier in the chain couldn’t do their part…and it started making an impact.

Then in February, SNOWVID-21 (or the Snowpocalypse) crippled the supply chain even more as highways throughout Texas were shut down and materials couldn’t get to the builders. Just when everything was thawing, and it looked as if delays were in the past, the Suez Canal was completely blocked for six days — delaying nearly 370 ships and $10 billion of trade — I’d call that an expensive weak link in the supply chain.

Initially, new home builders seemed to have their orders and materials under control. Many builders across the country had items in the supply chain stored or already on a ship from the manufacturer. Surely there wouldn’t be a long delay with COVID. Maybe there’d be a slight lag but definitely not weeks and months.

WRONG.

Delays, Delays, Delays

New home construction companies are still facing supply chain delays. There doesn’t seem to be a home builder that isn’t dealing with delays in the supply chain and therefore passing those delays on to their clients.

Whether smaller local builders or large national production builders based in Arlington, Texas, that sell all over America, none of them seem to be able to stay on schedule. If materials aren’t on site, there isn’t much that a builder can do.

Everyone involved is frustrated.

Builders need to stay on schedule in order to make their money. Suppliers and vendors need to be reliable so they’ll stay in business. Buyers need to know when their home will be completed so they can plan in regards to their move, loan, and current living situation. Realtors … ah well, who cares about them.

The biggest annoyance is that no one knows if or when this problem will be resolved. It’s not as if the supply chain can suddenly get back on track after all these recent issues. A builder can’t force the window supplier or cabinet company to deliver their products if the supplier doesn’t have the materials to build them.

Everyone is out of excuses. Everyone is frustrated. Everyone is realizing that in new construction, the supply chain is only as strong as its weakest link … and right now there are many weak links.

Only time will tell if these delays become the standard in the industry or will eventually be remedied. Until then, no matter when they say the home will be completed, expect delays.