Three Problems in the Global Construction Industries and How B2B Marketplaces Help
The construction industry is changing rapidly. However, it continues to grapple with several key challenges that risk undermining growth. According to a study by KPMG in 2023, the industry is struggling with project performance, risk management, ESG (environmental, social, and governance) integration, technology adoption, and safety concerns. This blog explores these challenges and discusses how effective B2B marketplaces can provide solutions.
Project Performance Issues
Only half of construction projects are completed on time, according to a KPMG survey. This highlights significant issues with project scheduling and management. Additionally, 87 percent of businesses are under greater scrutiny, indicating challenges with transparency, accountability, and possibly compliance. There is also a critical need to improve estimating accuracy to better manage project costs and schedules.
Improving Estimating Accuracy and Cost Management
B2B marketplaces provide access to a wide range of suppliers, allowing construction companies to compare prices and obtain competitive bids. This improves the accuracy of cost estimates and helps manage budgets. Platforms that integrate project management tools with B2B marketplaces allow for real-time cost tracking and budgeting.
Enhanced Supply Chain Management
By providing centralized purchasing mechanisms, marketplaces ensure on-time delivery and reduce the risk of delays. By streamlining the procurement process, these platforms help manage project schedules and avoid costly interruptions.
Risk Management
The construction industry faces constant change, necessitating better risk transfer strategies and innovative approaches to managing uncertainties.
Diversified Supplier Base
Access to global networks of suppliers through B2B marketplaces enables companies to mitigate risks associated with local disruptions or supplier dependency. These platforms provide a global reach, offering greater flexibility and reducing the influence of localized issues.
Contractor and Vendor Vetting
B2B platforms often provide facilities for vetting subcontractors and vendors, ensuring that only reliable and quality partners participate. This reduces the risk of project failure due to unreliable or inefficient partners.
ESG (Environmental, Social, and Governance) Integration
ESG has climbed the agendas of construction leaders, with 54 percent “fully envisioning” the benefits of ESG and aggressively pursuing maturity. Key benefits cited include reputational improvement, competitive advantage, and enhanced access to project capital. Diversity, equity, and inclusion (DEI) is also a priority, with a shift towards greater use of technology and remote working.
Sustainable Sourcing
B2B marketplaces can promote suppliers that meet strong ESG standards, making it easier to adopt sustainable practices. These platforms focus on eco-friendly practices, helping construction companies meet environmental goals and improve their reputation.
Technology Adoption and Innovation
The construction industry is beginning to embrace technology to transform performance. The KPMG survey revealed that 81 percent of E&C organizations are using mobile platforms, 43 percent are using robotic process automation (RPA), and 40 percent are adopting artificial intelligence (AI), although many are still in the early stages.
Access to Innovative Solutions
B2B marketplaces can bridge the gap between traditional construction and technologically advanced solutions. These platforms provide access to state-of-the-art project management software, BIM (Building Information Modeling) tools, and advanced data analytics, driving innovation and improving project outcomes.
Prefabrication and Modular Manufacturing
Marketplaces that specialize in modular construction components can significantly reduce onsite installation time and improve safety. By providing high-quality, standardized products, these platforms help streamline construction processes and reduce waste.
Safety Concerns
It is important for construction sites to ensure that up-to-date safety equipment is available. The need for safety improvements through technologies such as digital inspection and modular construction, which can reduce hazardous onsite work, highlights ongoing safety risks of traditional construction methods.
Access to Safety Equipment
B2B platforms offer a wide range of safety products, helping companies maintain high safety standards and reduce onsite accidents.
Training and Compliance Resources
Marketplaces provide safety management solutions, including training programs and compliance resources. These tools help construction companies stay up-to-date with safety regulations and best practices, creating a safer work environment for all involved.
The Role of B2B Marketplaces in the Construction Industry
B2B marketplaces offer a range of benefits that address key challenges in the construction industry:
• Wide Supplier Networks: These platforms provide access to a diverse pool of suppliers, enabling competitive pricing and reducing reliance on single suppliers.
• Integrated Procurement Solutions: Centralized procurement and project management tools streamline the purchasing process and improve cost management.
• ESG Compliance and Sustainable Sourcing: Marketplaces highlight suppliers that meet ESG standards, promoting sustainable and responsible sourcing practices.
• Technology Integration: Access to advanced technologies such as BIM, AI, and modular construction components enhances project efficiency and innovation.
• Enhanced Safety Measures: By providing the latest safety equipment and compliance resources, these platforms help improve onsite safety and reduce risks.
Conclusion
The construction industry is at a crossroads, facing many challenges but also unprecedented opportunities. B2B marketplaces are emerging as important tools to address these challenges, delivering solutions that improve project performance, manage risks, integrate ESG principles, and drive technological innovation. By harnessing the power of B2B marketplaces, the construction industry can not only overcome current obstacles but also pave the way for a more efficient, sustainable, and resilient future.
As the industry continues to evolve, the adoption of these platforms will become increasingly important to remain competitive and meet the demands of today’s construction projects. The integration of B2B marketplaces into the construction industry represents an important step towards achieving these goals, ensuring that the industry remains agile and growth-minded in an increasingly complex and dynamic environment.