Posted In: Business Transactions & Corporate Counseling & Tax - Business & Corporate
Manufacturing & Construction
Business Blog: Transformation of Commercial Construction and Manufacturing Industries Through Technology
on March 10, 2022
Businesses have been and continue to navigate issues stemming from or exasperated by the pandemic such as shutdowns, labor shortages, and supply chain issues. Additionally, businesses also have had to contend with natural disasters, strikes, cyber security breaches, politics, and most recently war. Instead of being discouraged by these challenges, some industries have met these challenges head-on and embraced the opportunity to become more efficient and effective by evaluating how things have been done in the past and how they can be improved going forward, specifically regarding the use of technology.
Commercial construction and manufacturing are two examples of industries that are seeing big growth in demand and are meeting those demands by embracing technology. Technology has shifted in these industries and if businesses are not willing to embrace the new technological tools and advancements available, only time will tell if those businesses will be able to compete.
Commercial construction is expected to take off; in part due to increases in manufacturing, e-commerce, and technology sectors. With the growth of e-commerce and companies such as Amazon, warehouse needs are increasing and creating significant demand for construction. Additionally, with the advances in technology, whether through remote work or other innovations, there is a growing need for additional chip manufacturing locations and data centers. These needs coupled with the fact Congress has passed two infrastructure bills within the last 12 months, provides an influx of capital to fund some of the growth we are expecting.
Technology has been a part of the commercial construction industry for years with tools such as BIM (Building Information Modeling) coordination, remote collaboration, prototyping, finishing, and other similar programs; however, these programs were never universally adopted. The use of technology in the commercial construction industry has been increasing significant as we see the adoption of virtual reality and remote collaboration to continue to move projects forward where they otherwise would have stalled due to the pandemic and its many effects.
Manufacturing is also expected to continue to grow despite the supply and labor issues in the industry. These issues cause delays that are costly for businesses and can affect their ability to meet the demands of their clients, and potentially fail to perform under their contractual obligations, straining those important client relationships. The protests by the truckers in Canada is just one cause of the delays, and that alone is said to be responsible for delaying billions of dollars in trade. That alone has a huge effect on the manufacturing industry, but does not take into consideration the more typical delays the industry is dealing with such as navigating inconsistent international COVID-19 protocols and quarantine periods.
These supply chain issues, along with a shortage of workers, have forced manufacturers to be creative and, in some instances, renegotiate and revamp how they do business and contract with both their suppliers and customers. Technology has become a tool that companies rely on to help mitigate the challenges they face. In some instances, manufacturing business can alleviate some of the labor issues by using robots and drones. They perform some of the lower paying and labor heavy jobs while also allowing businesses to electronically monitor their inventory and put automatic protections in place so they can stay ahead of the demand. Technology is also being used to track shipments providing real time data so they can manage the timeline, obligations, and expectations with their clients.
Companies working in the commercial construction and manufacturing industries, regardless of their role, are facing high demand and the decision of whether to continue providing at capacity, or to invest in growing the company whether it be by increasing inventory, expanding their labor force, or embracing technology. There is a new market for use of robots and other technology in conjunction with the traditional labor force, the effects of which we can only speculate.
Businesses in these industries that are not embracing technology may want to consider selling while you still have a market share. Luckily, now may be a prime time to sell as many companies look to expand and diversify their existing businesses.
For more information on this topic check out last month’s Brouse Briefing Webinar Series: Construction and Manufacturing Outlook with Cascade Partners.
This blog is intended to provide information generally and to identify general legal requirements. It is not intended as a form of, or as a substitute for legal advice. Such advice should always come from in-house or retained counsel. Moreover, if this Blog in any way seems to contradict advice of counsel, counsel's opinion should control over anything written herein. No attorney client relationship is created or implied by this Blog. © 2022 Brouse McDowell. All rights reserved.