Crucial Logistics and Supply Chain Trends

Perhaps now more than ever, it's essential to optimize your supply chain strategy. 

To help you do just that, we check in with Cyndi Brandt, VP of Fleet Solutions for Descartes Systems Group, to get a hold on what trends are shaping logistics and supply chain tactics in the world of building supply. 

Q: What building industry trends are you seeing logistics-wise?

Brandt: Building supply distributors have realized that technology and digitally transforming how both they interact with customers and how customers order is critical to encouraging loyalty, reducing distribution costs and increasing revenue. 

For example, contractors don’t order everything they need to in order to properly install a roof. Guided ordering, however, ensures all components are ordered, which eliminates the need for a second delivery. From a technology perspective, this involves a combination of custom mobile apps for customers that combine multiple actions and contractor ERP systems.

Building supply distributors are also engaging with delivery management technology that automatically routes and tracks deliveries, provides guided workflows and communicates about orders. This results in lower cost, more efficient, higher density (i.e., more stops per route) routes while providing differentiated customer service.

Q: What trends are going to shape the future of building supply logistics?

Brandt: AI & digital transformation. Legacy systems and manual paper and pen processes may make some building suppliers become the second choice for product, not the first, which may result in higher operational costs due to inefficiencies introduced by unnecessary repetitive tasks.

Distributors must implement modern ERP and ordering systems that integrate AI. AI speeds up ordering and can make ordering more accurate, increasing customer service, decreasing contractor ordering errors, and potentially eliminating second deliveries when something is forgotten or the wrong products are delivered. 

There's also more prefabrication occurring. Prefabrication results in bulkier deliveries and also the need for more just-in-time deliveries, which increases the complexity of planning and executing routes. 

Q: What impact are tariffs (or the threat of tariffs) having on the supply chain, and what obstacles do you foresee?

Brandt: Immediately, the costs of some wholesale products are increasing, and building supply distributors may need more working capital to afford inventory purchases. 

Distributors need to decide if they can absorb the costs associated with tariffs or if they need to pass along in part to their customers. This is where proactive modernization prior to the implementation of new tariffs may have a lasting and significant impact on the business, and these distributors may be able to hold prices a bit more because they’ve become, or are becoming, more efficient and operational costs across the business have been lowered. 

Within the coming months, it’s expected the U.S. will see the effect of imports not finding their way into the U.S.; for example, lumber, stone, concrete, metal and more may not be arriving on our shores in customary volumes. These materials are critical in any type of building, from commercial to residential and professional to DIY. The unavailability of products, or higher prices of domestically sourced products, stand to have an impact on overall sales in the sector.