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Pandemic Exposes Construction Supply Chain Vulnerability

Early on a Tuesday morning in early March, I received a seemingly benign email from my boss with the subject “Light Fixtures” and a single sentence to come talk to him when I got to the office that morning. When I arrived, I popped into his office to see what about light fixtures he was interested in learning.

His concern: the coronavirus. By then the news of the global spread of COVID-19 was dominating every second of the news and office banter, but with only a few confirmed cases in the U.S. at the time, it still seemed far from becoming the full-blown pandemic we know today. My boss had a simple request that day when he asked me to see him. Reach out to my network of lighting designers, distributors, and manufacturers and assess the potential impact COVID-19 would have on our ability to receive ordered materials for our construction projects. 

He expressed concerns about the supply-chain and the source of origin for the many components that are assembled to make the fixtures. It is no secret that lighting, like many other industries, has become a global enterprise. The vast supply-chain of raw materials like aluminum for the housings, electronic components like the LED’s, and final assembly of the luminaire is a complicated spider web of shipments that span the globe for each fixture. I needed to gather as much information I could about the true provenance of the fixtures and to work with our distributors to source potential alternatives for fixtures that may be delayed by COVID-19.

Seemed easy enough at the time, but I had no idea what I was getting into.

I got right to work, sending emails and making phone calls to my network of lighting distributors, manufacturers’ representatives, and designers. Every one that I could get on the phone I would ask an increasingly familiar set of questions. Where were fixture manufacturers located? What were manufacturers telling them about the origin of raw materials? Did anyone stock components in inventory? Where did the final fixture assembly take place? What did they know about potential delays in shipping?

The responses I got were varied, and they evolved as the virus spread and shut down the world. We had manufacturers in the U.S., Canada, China, Japan, and Italy. They sourced raw aluminum from Canada, U.S., and China, as well as LED components from China, South Korea, and the U.S. The final assembly was also commonly in the U.S., Canada, China, Japan, or Italy. It seemed that every possible permutation existed in the industry’s supply-chain. The official word from many manufacturers varied as much as their supply chains. I heard responses that varied from “no business interruption” to “putting clients on notice of shortages” to “potential delivery delays” with no specifics provided.

I continued to stay in daily contact with my vendors over the next few weeks for the latest information. One of the Canadian lighting companies I found said they kept roughly two years of LED’s and other electronic components in inventory and sourced all their aluminum for fixture housings from Canada. They didn’t expect any business interruption and even provided a letter of guarantee for one of our projects that the light fixtures on order will be delivered on schedule. Another U.S. based LED tape-light manufacturer, whose products are mainly assembled in China, was no longer receiving shipments and said they were working with whatever was left in inventory until they ran out. 

What quickly became clear was that the supply-chain was complex, global, and at best opaque. And while it was possible to ascertain the source of some componentry from a factory in China or South Korea, for example, it proved near impossible to know where the specific factories that made the components were located and whether they were shut down or still operating.

By the third week in March, COVID-19 was clearly a full-blown global pandemic shutting down non-essential businesses and majorly disrupting the supply-chain all over the world. By then we had received letters from U.S. and Canadian based distributors and manufacturers giving notice of factory shutdowns due to their non-essential business status in their locales. And by the end of that week, construction was deemed no longer an essential business leading to a shutdown of all but one of our projects (a school).

While understanding the specifics of the global lighting supply-chain became less important once our projects shut down, it got me thinking a lot about how difficult it is to track accurate information on the origin of the products we install. This keeps many in the chain unaccountable for their actions and leaves a lot of space for problems. I kept asking myself: what we can do as an industry to increase visibility into the sourcing practices of all manufactured materials, not just lighting? 

From the vantage point of a general contractor, the ordering and expediting of manufactured goods is still a painful one. Approvals, production details, and shipping orders are largely still done on Excel spreadsheets—and word of mouth. Fixtures submittals are documented and reviewed for approval by the project design team, then an order is placed with the manufacturer, and then we wait for the lighting vendor to gather information in a tracking log. Only then do they come back with estimated lead-times for fabrication (often four to six weeks) and approximate shipping and delivery dates. When I expedite a project, I have to make a phone call. When there is a problem, I have to be there to receive a phone call. If I want a status update, I have to send an email. This process is fraught enough, but add to the fact that many of my contacts are on the other side of the world, in opposing time zones, and you can see why problems often compound.

What if we could digitize the process? What if we could use technology to open the flow of information from the factories to the field. Many manufacturers already have in place solutions that track assembly line production for order and inventory management. Instead of relying on word of mouth, we could open access to the data already collected by the manufacturers for their own internal purposes and make it available for upstream tracking of materials and fabrication of our orders. 

An expediting platform that tracked data from various manufacturers would give real-time updates to our vendors, clients, and us on the whereabouts of material orders, provide accurate notifications of delays before it’s too late, and eliminate the guesstimates on production lead-times and order shipping. It could also be used to provide performance-based statistics of each manufacturer to better inform decisions on manufacturer selection for the next project. 

While we sit at home and wait for the shutdown to be lifted and projects to reopen, we are left to ponder the impacts the pandemic will have on construction and manufacturing moving forward. Our clients are asking many questions about their project statuses and schedule impacts, and the ability to provide the most accurate answers will help us to maintain our obligations to them. With all the uncertainty, the more clarity we can provide, the more accurate our responses to our clients will be. When we finally get back to the “supply-chain-as-usual” we need to restructure how we source materials for our built world. There is a better way. Maybe we just needed time off to understand how to implement it.

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