By Jennifer Castenson | Forbes
September 27, 2021
Supply chains have been a complicated issue since the beginning of time, in all types of situations, from the battle field to the project site.
In the case of the battlefield, lives were on the line as supplies weren’t able to get through the devastated landscape and the broken lines of transportation. For housing, affordability is on the line as typical supply chains are disrupted, altered and even shut down.
Nowhere is anyone escaping the issue. As Martin Luther King said, “Whatever affects one directly, affects all indirectly. I can never be what I ought to be until you are what you ought to be. This is the interrelated structure of reality.”
Now, builders, developers, manufacturers, architects, and contractors are dealing with that reality and trying to reimagine a more successful path forward, while all trying to serve themselves and their own bottom lines. It’s a messy paradigm.
Some manufacturers depend on either components or assembled products from overseas. The shipping costs for containers from China to the east coast of the US have climbed more than 500% from one year ago according to freight-tracking firm Freightos. Yet, nowhere is there room in the home building process to pass along an increase of 500%.
Bob Tancula serves as senior vice president of building product manufacturers advisory at national media and data group Zonda and says that another large part of the issue is about labor.
“One of the biggest issues is labor constraints,” he said. “Manufacturers don’t have enough labor on the plant floors. Demand is not going to drop back, so this is the first time in 30-plus years where the demand for products is unlikely to be met by manufacturers.”
With that growing demand, manufacturers are investing more in labor. Some have started to offer higher wages, spending more to attract and keep workers, even offering sign-on bonuses. Tancula believes this increase in labor costs will likely constrain market growth.
As a temporary fix, some service-oriented categories have tried paying people at the end of the day or the end of the week to entice them to show up.
Greg Leung is the CEO of Connect Homes, a California-based builder delivering high-tech housing solutions, who also spent more than a decade at Apple as senior director of worldwide supply demand management.
He says that technology has a much more global supply chain and that it has a lot more components than housing, pointing out that housing is much simpler.
“Supply chain management is all about information and decision making,” Leung said. “In technology, over decades of management, there is a great deal of information and stakeholders have learned to use data to make decisions on supply chain visibility and inventory, which means it can be managed better. The building supply chain isn’t as advanced. It has lots of blind spots, which makes it difficult to manage and it can cause bullwhip affect.”
A good example of the bullwhip effect was lumber during the pandemic. Builders started to fear a shortage, they stocked up, it exacerbated the shortage, prices went up, then manufacturers ramped up production. The increased production can then lead to a glut of lumber, which would then lead to dropping prices. It starts with a small disruption, and gets amplified with customer buying behavior.
Leung says the antidote to bull whip effect is more information. In the lumber example, suppliers could proactively smooth out the peaks and valleys if they had the right information, but he says access to data in housing isn’t sophisticated enough.
One area he suggests housing leaders could improve is looking at the situation to differentiate between end user demand and actual consumption.
“For example, home starts have increased but not quadrupled, while pricing has,” Leung said. “What you can do is manage different tiers and differentiate between users and consumption and not just fear and stocking up. If you have data to see if the increase in demand is actual consumption or panic buying, that’s a very important tool.”
He also suggests building strong, strategic relationships by choosing partners carefully and sharing your vision and private data with them, which is more difficult to do in the housing industry because it is more transactional and less collaborative.
“To drive innovation, you have to get partners to buy into the mission,” Leung said. “It requires buy in and support that you can’t get without a personal and professional relationship. You should help them become part of the strategy and objective, and maintain close relationships with the management of the company. That’s a typical tech practice.”
Amit Haller is founder and CEO of another home building company Veev and he has found ways to be avoid the shortages in the supply chain impacting the industry. His building process is unique and doesn’t rely on the materials that the rest of the industry relies on.
“A lot of the materials that are challenging other builders practically don’t exist for us,” Haller said. “We don’t use the wood or paint. Now the wood is not just the wood, resins are in shortage as well because of the factories shutting down in Texas and are not back in production. We also make kitchen cabinets with high performance surfaces, which puts us at a very strong advantage.”
Many builders are not in a position to make these sweeping changes to materials.
The challenge continues to be how to develop solutions that strike the targeted balance between effectiveness, agility, reliability, speed, visibility, and cost…
To read more, visit Forbes here
Share this article
September 13, 2022
August 25, 2022
August 22, 2022
Noyack Logistics Income REIT, Inc. “NLI” reserves the right, in its sole discretion, to modify, alter, or otherwise change these Terms of Service at any time with or without notice. Please review the Terms of Service statement periodically for changes. Your continued use of the Site constitutes your acceptance and agreement to be bound by these changes without limitation, qualification or change. If at any time you determine that you do not accept these changes, you must immediately discontinue use of the Site.
The use of this Site is restricted to U.S. Residents with a valid social security number that are 18 years of age or older. Children under the age of 18 are not eligible to participate in the offerings on the Site.
Although NLI attempts to provide accurate information, it does not guarantee the accuracy of information found on the Site. Your reliance on information found on the Site is at your own risk.
The Site, and its contents, are provided to you “as is,” without warranty of any kind, either express or implied. NLI makes no representations, express or implied, including, but not limited to, the implied warranties of merchantability, fitness for a particular purpose, title, non-infringement of the rights of third parties, data accuracy, systems integration, or quiet enjoyment.
NLI, its affiliates, suppliers and service providers do not warrant or make any representations regarding the use or the results of the use of the materials on this Site in terms of their timeliness, correctness, accuracy, reliability, or otherwise. While we make reasonable efforts to provide accurate and timely information, you should not assume that the information provided is always up to date or that this Site contains all the relevant information available. NLI undertakes no obligation to verify or maintain the currency of any information provided on the Site.
Under no circumstances will NLI, its affiliates, suppliers, or any others involved in creating this Site and its contents be liable for any damages or injury, including any direct, indirect, incidental, special, consequential, punitive, or other damages resulting from any circumstance involving this Site or its content (including, but not limited to, damages or injury caused by error, omission, interruption, defect, failure of performance, unauthorized use of this Site, lost data, delay in operation or transmission, breach of security, line failure, defamatory, offensive or illegal conduct of any user of this Site, or computer virus, worm, trojan horse or other harmful component), even if you have notified NLI in advance of the possibility of such damage.
The Site, and all of its contents, including but not limited to articles, other text, photographs, images, illustrations, graphics, video material, audio material, software, logos, titles, characters, names, and button icons (collectively the “intellectual property”), are protected by copyright, trademark and other laws of the United States, as well as international conventions and the laws of other countries. The intellectual property is owned or controlled by NLI or by other parties that have provided rights thereto to NLI. No portion of this Site may be reproduced, duplicated, copied, sold, or otherwise exploited for any commercial purpose that is not expressly permitted by NLI.
You may browse through the Site and occasionally download small amounts of material appearing on the Site that are of personal interest to you for your personal, non-commercial use. You must keep intact all copyright, trademark and other notices contained in your personal copies. You may not reproduce or allow others to reproduce your personal copies of downloaded materials, nor may you make them available electronically. You may not save or archive a significant portion of the material appearing on the Site. You may not attempt to alter or modify the content posted on the Site. Except as expressly set forth in this paragraph, you may not copy, download, display, distribute, publish, enter into a database, perform, modify, create derivative works, transmit, post, decompile, reverse engineer, disassemble or in any way exploit any of our intellectual property or the Site itself.
Other trademarks, service marks, product names, and company names or logos appearing on the Site that are not owned by NLI may not be used without express permission from their owners.
You may not use this Site for any purpose that is unlawful or prohibited by this Terms of Service statement, or cause damage on or through the Site. You promise that none of your communications with or through the Site will violate any applicable local, state, national or international law. Your access to the Site may be terminated immediately in NLI’s sole discretion, with or without notice, if you fail to comply with any provision of this Terms of Service statement.
NLI has no obligation to monitor the Site; however, you acknowledge and agree that NLI has the right to monitor the Site electronically from time to time and to disclose any information as necessary or appropriate to satisfy any law, regulation or other governmental request, to operate the Site, or to protect itself or other users of the Site.
NLI reserves the right, in its sole discretion, to modify, suspend, or terminate the Site and/or any portion thereof at any time for any reason with or without notice to you. NLI shall not be liable to you or any third party for any termination of your access to the Site.
You agree to indemnify, defend, and hold harmless NLI, its subsidiaries, agents, distributors and affiliates, and their officers, directors and employees from and against any and all claims, actions, demands, liabilities, costs and expenses, including, without limitation, reasonable attorneys’ fees, resulting from your use of the Site in a manner that violates or is alleged to violate these Terms of Service, any applicable law, or any warranty you provide herein, or otherwise arising in any way out of your use of the Site. NLI reserves the right to take exclusive control and defense of any such claim otherwise subject to indemnification by you, in which event you will cooperate fully with NLI in asserting any available defenses.
The Site may contain links to Web sites operated by third parties and may also provide third party content on our Site by “framing” or other methods. NLI does not monitor or control the content of any linked or framed sites and makes no representations regarding, and is not liable or responsible for, the accuracy, completeness, timeliness, reliability or availability of any of the content uploaded, displayed, or distributed, or products or services available at these sites. If you choose to access any third-party site or rely on information found within third party content appearing on this Site, you do so at your own risk. The presence of a link to a third-party site does not constitute or imply NLI’s endorsement, sponsorship, or recommendation of the third party or of the content, products or services contained on, or available through, this Site.
If you have questions regarding the Agreement or the practices of NLI, please contact us through our website: noyacklogistics.com.
When using noyacklogistics.com, we may collect the following information:
Contact Information: When you contact us using our online contact form, we collect the messages you send as well as the personal information you provide, such as your name, phone number, and email address.
Application Information: We require certain personal information when you apply online for an Investor account. In addition to basic details such as your name, email address, and phone number, we may require information to verify your identity, such as your social security number and driver's license number.
Log Data: When you access and use our website, we automatically record information concerning the device you are using and your activity on the Websites. This may include your device’s Internet Protocol (“IP”) address, your browser type, the types of information you search for and view on our website, locale preferences, location, identification numbers associated with your device, and your mobile carrier. If you arrived at our website by clicking on an advertisement, promotion, or search result on another website, we also take note of the web page you visited before you came to our website.
Please note that, if you delete or choose not to receive cookies from our website, the functionality of the websites may be impaired.
Additional information may be collected during your use of our website, or when we communicate with you via telephone, email or other means.
If you complete the account registration process, NLI or our business partners may collect information from third parties to verify your identity and bank account information and assess risks related to your account.
We use your information to verify your identity, provide you with quality customer service, evaluate your request for an Investor account and improve our website. We may be obligated by law to retain certain communications and other information concerning you. In addition, we may retain and use communications, transaction details, and identifying information to maintain audit trails for security and anti-fraud purposes.
NLI does not share information concerning you with unaffiliated third parties for marketing purposes. However, we may use your personal information to present you with information concerning offerings that may be of interest to you, via email.
Please note, the receipt of marketing communications via email is voluntary. If you do not wish to receive these communications, you may opt out at any time. To opt out please follow the steps below or contact us at (813) 438-6452 for assistance. If you choose to opt-out, you will continue to receive administrative emails from us.
We disclose information concerning you as necessary to run our everyday business, such as in connection with the movement of funds. We also may disclose information concerning you if required to do so by law or if we believe that such action is necessary to comply with a legal obligation.
NLI is committed to maintaining the security of your information. When you supply information to us through our website, we use TLS (Transport Layer Security) or SSL (Secure Socket Layer) protocols to secure the transmission of information. Once we receive information, we store and protect it using industry-standard firewalls and other technology. Please remember, though, that no method of electronic transmission or storage is 100% secure.
The NLI website is not intended for use by children under the age of 13. In order to use our services, you must be 18 years of age or older.
Customers can opt out of receiving marketing solicitations by emailing us at https://noyacklogistics.com/contact/
NOYACK Logistics Income REIT operates a website at noyacklogistics.com.
Past performance is no guarantee of future results. Any historical returns, expected returns, or probability projections may not reflect actual future performance. All securities involve risk and may result in partial or total loss.
While the data we use from third parties is believed to be reliable, we cannot ensure the accuracy or completeness of data provided by investors or other third parties.
Neither NOYACK nor any of its affiliates provide tax advice and do not represent in any manner that the outcomes described herein will result in any particular tax consequence.
Prospective investors should confer with their personal tax advisors regarding the tax consequences based on their particular circumstances.
Neither NOYACK nor any of its affiliates assume responsibility for the tax consequences for any investor of any investment.