The Effects of Building Materials Supply Chain Disruptions on Customers: How P2P Automation Can Help

No company is immune from the effects of an economic downturn … but what about the effects of unprecedented, unexpected growth? That’s exactly what building materials businesses are experiencing right now. With the housing market on fire in the U.S., businesses in this industry are struggling to keep up with rapidly increasing prices and demand — throwing new challenges at supply chain operations and creating a greater need for streamlined operations.

Businesses themselves aren’t the only ones directly affected by these disruptions and bottlenecks in currently overwhelmed supply chains — their customers are feeling the sting as well. That’s why now more than ever, organizations in this booming industry need to streamline supply chain operations in order to maintain and satisfy customers, and achieve the efficiency and time savings they need to stay ahead of the competition.

How supply chain challenges are affecting customers

Builders have witnessed the frustration felt by customers firsthand. After all, they’re the ones that have to deliver the news when construction timelines are pushed back and price tags are increased due to supply chain challenges. For example, building material shortages often mean builders must order certain products far in advance, even before a construction project has broken ground.

In a conversation with one builder, they shared that they have to order windows at least six to eight weeks before they even need them, and a PO isn’t sent until much later. Normally, contracts require 90 days advanced notice for price changes to protect purchase orders from receiving increases. However, due to quickly rising demand and prices, vendors are constantly requesting rate increases and aren’t able to honor those 90-day requirements — all of which cause a major headache for supply chains and greater frustration for customers and their growing bills.

How P2P automation makes supply chains stronger

Under “normal” circumstances, optimizing back-office business activities like procurement and paying bills doesn’t top the average organization’s priority list. But you’re only as strong as your weakest link, and as we’re finding out now — at a time when cost is critical — building materials companies need to utilize technology to create resilient supply chains and minimize costly disruptions before they happen for both themselves and their customers.

By automating procure-to-pay (P2P) cycles, businesses in the building materials industry can overcome many of the current supply chain challenges simply by being able to make payments to suppliers faster, cheaper and more efficiently than ever before. Even before the industry boom, manual P2P processes left the door wide open for human error to wreak havoc on supply chains. And at a time like now, that’s a risk organizations simply can’t afford to take.

P2P automation offers much-needed, early insight into when products will be shipped, better control over spend compliance, strengthened relationships with suppliers that can result in discounts, and a single platform for procurement and AP that provides real-time data on products and payments.

The building materials boom shows no signs of slowing down. In fact, it’s predicted that it could continue for generations to come. Now is the time to take advantage of AI-driven automation to gain the efficiency and competitive advantage needed to thrive in an industry with unlimited potential.