This time the return of the construction market seems to be different than the typical upswing of a regular business cycle. Our customers report that an evolution is required in the way business needs to be done. This presents itself in the form of three primary challenges:
1. Continuing margin pressureUsually you expect that increased demand will allow better margins for producers in the short term, at least until more producers start getting into the market. This does not seem to be the case this time. In the infrastructure market this is most likely because the customer is in the public sector where budgets continue to be very tight. In the bigger view, though, technology enables more transparency which, in turn, demands more cost efficiency in both public sector and private sector projects.
2. Inventory managementThis one is quite traditional. We hear customers and prospects say that increased volume presents the age-old problem of managing more inventory. They will take this problem every day over slow demand, but they also recognize that bloated inventories were the root cause of most of their problems in managing through the 2008 downturn. Most now want to be proactive about setting up systems to help make inventory logistics be more efficient and manage inventory control.
3. Need to be productive everywhere
Operating under heavy margin pressure in responding to increasing demand requires manufacturers and contractors to be more productive than ever before. We hear people say that it feels like they need to produce more productivity in places that they never considered possible before. This is why lean manufacturing and lean construction initiatives are gaining very strong traction in the market. This is also why manufacturers and contractors are embracing technology like never before.
We've been saying for a while that the infrastructure market is in the early stage of an unprecedented opportunity for those who adapt to the challenges of evolving business practices. These are what we have observed from our discussions with manufacturers and contractors. What do you see?
About IdenciaOur purpose at Idencia is to offer infrastructure asset tracking solutions that improve productivity throughout the infrastructure value chain.. to create lean infrastructure. Our subscription offering applies RFID tracking to infrastructure products from the time of manufacture through end-of-life. As a cloud-hosted product tracking system that is seamless between manufacturers, contractors and asset managers, Idencia adds information value to all, eliminates redundancy and saves time. If you would like to learn how Idencia can help your company, we invite you to download a copy of our Idencia Primer ebook.