Using digital technologies to gain a better understanding of stock levels and manage materials costs will be key to tackling challenges caused by the economy, according to a new poll of builders’ merchants conducted by ECI Software Solutions.
Supply chain issues, rising inflation rates and a reduction in orders due to customers tightening their belts were all cited as the top concerns for those in the industry. Furthermore, cost pressures have heightened in 2022 as the Ukraine conflict caused stock uncertainty as a result of severe disruptions in the global market.
Accordingly, companies highlighted various digital solutions as the window of opportunity for traders struggling with the pressure on stock-levels as prices become more unpredictable.
The findings have been published by ECI in a new report, How Builders’ Merchants Have Adapted to the Economy in 2022.
Gareth Belsham, Director at Naismiths, said without intervention, those in the industry could face higher pressures this winter: “The flood of new orders seen at the start of the year is slowing to a trickle. The cooling of demand did ease some of the inflationary pressures though, and input cost inflation has now dipped to its lowest level for 18 months.
“Looking ahead, most construction firms are busy and order books remain relatively full – but the picture for 2023 does look increasingly grim.”
Builders’ merchants have been encouraged to invest in cloud-based technologies and business management software (ERP) to maintain a healthy level of stock at optimal prices.
Craig Sanders, joint Managing Director at Protrade, commented on how the state of the current challenge was more than the industry has seen from the last two decades: “We have had years of no major distractions within the construction industry, and it feels like they have all been compounded in the last couple. An area where we feel many builders, merchants and distribution businesses are lagging behind is in the lack of investment in their IT infrastructure. Modern operating systems and eCommerce platforms drive [a reduction in] inefficiencies and help with customer satisfaction.
“It’s only a matter of time before businesses wake up to the constraints and limitations of their legacy systems and cumbersome websites. The cloud has changed the information technology landscape and the degree of technical quality that is now available at our fingertips is incredible – but underutilised.”
Chris Fisher, VP of LBMH division, EMEA, at ECI commented on the findings from the report: “The economic landscape is one that many of us have never experienced before. For those in the building materials sector, it’s clear that there’s a lot of concern and uncertainty about the coming months.
“The longer-term picture requires a step change, and the silver lining is the abundance of technology available to the building materials sector. Digitalisation and the cloud can be your hardest working employee, freeing your team up to spend on strategy. Those who embrace change will be able to feel more secure, invest in employee retention and have the flexibility to adapt as the economic cycle continues to fluctuate.”
Click here to view the full report, How Builders’ Merchants Have Adapted to the Economy in 2022.
