The construction industry has always been considered very conservative and slow in implementing IT solutions. Recession and high competition have forced changes and a flexible approach to the supply chain in recent years. Only the best and strongest manufacturers have remained on the market, most of which are companies belonging to large international corporations. Expenditures on IT infrastructure have increased, as innovative technological solutions have provided new opportunities for better and faster customer service. To become a leader in this industry, one must possess appropriate IT tools supporting the management of every element of the supply chain.
Introduction – the situation in the construction industry
In recent years, we have observed a deepening recession in the construction industry. This is evidenced by the decreasing share of the construction sector in the total value added generated in Poland (GNP – Gross National Product) since 1999, which in 2003, according to Central Statistical Office (GUS) data, amounted to only 5.7%. It should be added that in European Union countries, this average is well above 10%. The beginning of 2004 did not look very optimistic either. January, as always, was characterized by a significant drop in production. However, the situation began to improve in March and April 2004. According to the Polish Construction Review, the indicator describing the situation in the construction industry, expressed through the production generated by it (construction and assembly), fell by 9.5% compared to January of the previous year. In 2003, it amounted to 5.9% compared to the entire year 2002. Production is characterized by a continuous decline, although an increase in production was recorded in 2003. However, this increase was only 0.5% compared to 2002. Employment in the industry also does not inspire optimism. Layoffs, most often related to the dependence of construction work on the season and prevailing weather conditions, caused a decrease in the number of employees by 47 thousand in December 2003 compared to January 2003. The change in employment in January 2004 compared to January 2003 was 12.8%. Since 1998, employment in construction has fallen by almost half. These changes are likely largely due to the need to increase the efficiency of enterprises. It is worth mentioning the net profitability in construction (for the first three quarters of the year), which has remained below zero since 2001. In 2003, it reached a value of -0.5%. As you can see, construction companies are in a difficult situation. Analyzing the number of completed dwellings in subsequent years, a slight upward trend has been visible since 2000. In each of the subsequent years (except 2002), we have seen an increase in the number of completed dwellings, buildings, etc. The only worrying factor is the year-on-year decrease in the number of dwellings under construction (measured at the end of the year). A positive phenomenon seems to be a slightly higher number of building permits in 2003 compared to 2002. However, on the other hand, it is necessary to pay attention to the increase in the VAT rate on building materials from 7% to 22%, which is associated with an increase in the costs of individual construction in Poland.
Equally pessimistic were the results of a survey conducted in February 2004 by the Central Statistical Office (GUS) regarding the economic activity of construction companies. This is evidenced by the indicator describing the situation in the industry, which had a value of 23 points in February 2004. According to the PMR Publications report, the crisis in the Polish construction industry is influenced by, among other things: a low level of investment, a low rate of economic growth over the last few years, and a reduced rate of inflow of foreign direct investment. Despite this, some symptoms of recovery in construction can be observed. The situation of the entire construction industry is influenced by the situation of enterprises involved in the production and supply of building materials to the market. Such an enterprise is, among others, Lafarge Nida Gips (LNG), which is a supplier of materials for construction companies.
In such an unfavorable environment, it is necessary to fight for every customer. It turns out to be essential to develop the best possible market strategy, and above all, to efficiently organize activities within the supply chain. These activities, both in the sphere of purchasing for LNG and the distribution of finished products on the market, should constitute the company’s competitive advantage. A development of the gypsum market is noticeable. The use of gypsum-based products in construction is becoming more widespread. A shortening of distribution channels can be observed here. Factors contributing to success are price and product availability, as well as logistics. Enterprises wanting to exist in the construction market must constantly invest and improve their methods of operation. To be competitive, they must implement more effective strategies and use efficient tools. It is helpful here to use IT tools and communication solutions that enable the best possible implementation (in terms of time savings, error-free operation, data analysis), and ultimately also the optimization of logistics operations.
In the construction industry, the goal is to make supply chains more flexible so as to be able to react to market signals as quickly and accurately as possible. LNG is making its supply chain more flexible, thanks to which it is able to meet customer needs. This chain is characterized by:
- 48-hour delivery service,
- optimized distribution processes,
- simplified customs clearance procedures,
- flexible production planning,
- low inventory levels and high turnover of finished products,
- appropriate IT infrastructure.
Thanks to such characteristics of the chain, it is possible to meet market requirements and achieve a competitive advantage, which is the basis for remaining on the market.
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