In recent years, the global market has come under intense stress. From material disruptions to labour shortages, it has been a tough time for many sectors throughout the US.
The effects of geopolitical events can have significant downstream impacts on construction projects that last far longer than the event itself. Combined with the fallout of industries trying to react and adjust to events, it puts all businesses at risk.
As supply chains become more complex in response to these issues, as well as general market conditions, organisations are exploring new approaches to managing resources and maintaining project continuity.
One of the industries at the forefront of exploring new approaches is US construction.
Why geopolitical disruptions matter to construction
Although at first glance, construction seems to mostly be affected by domestic issues, wider problems can trickle downstream and have big effects within the industry.
Research found that in 2023, 32% of all construction materials were imported into the US; this is often in an attempt to bypass supply chain issues and rising materials costs.
As well as this, recent reports state that the US is importing around 25% of the equipment being used in construction.
Combined with the increasing reliance on new and specialised components to meet changing standards and demands, the US construction industry has opened itself to disruptions caused by the ever-changing geopolitical landscape.
Among the attempts to prevent damage, technology becomes even more useful, and with the emerging ability of AI, many business leaders are asking if it can be put to use to help companies protect against these instabilities.
But in what ways can AI actually help, and what are its limitations?
AI and supply chain visibility
Construction companies are at risk at numerous points of the supply chain, and due to the sheer amount of data needed to be collected and checked, problems can begin to form before teams are even aware of them.
AI can help by boosting a team’s ability to handle larger datasets. As well as this, it can automatically identify emerging patterns and highlight potential disruptions before they become a problem.
This earlier awareness and boost in visibility helps teams stay in control of the supply chain. Not just this, but it gives them the chance to handle growing risks before they become disruptions.
AI and demand forecasting
Due to the nature of construction projects, it can be hard to make last-minute adjustments, and recalculations and reorders take time and money, putting projects at risk of going over budget and over time.
AI gives them the ability to analyse historical data against current trends. It can help project managers create plans with more information as well as help build in forecasts for common issues they might otherwise miss.
This helps construction projects start with more accurate forecasts. This means that not only can teams plan better, but the procurement of materials and equipment is easier and more comprehensive. More accurate forecasts help protect against uncertainty.
AI and scenario planning
With so many moving parts to construction projects, leaders need to be prepared for multiple possible situations and their various outcomes. The ability to be prepared can make or break a project, particularly with the recent instability in the global market.
AI can assist them by giving them the ability to model more scenarios faster. AS well as this, they are able to explore more avenues of potential issues using the wealth of information available, helping them be more prepared. This also helps them evaluate potential impacts and potential likelihoods of the issues.
This increase in thought exercises means that leaders can make more informed contingency planning. Better contingency planning can mean the difference between a small lapse and a giant delay.
AI and resource allocation
With an ongoing labour shortage, as well as delayed material deliveries and sustained issues, companies are being expected to do more with less, and this means that resource allocation has become more important than ever.
AI can help identify and highlight where resources are most needed. AI also helps management keep track of what they have and what their resources are doing. This clarity helps support allocation decisions faster and with more accuracy.
This boost means that waste is reduced throughout the project, and helps keep operational efficiency higher. This ensures that project leaders get the most out of what they have.
Key considerations
Although it can seem that AI can help directly address issues across visibility, forecasting, and planning, it is important to understand its limitations.
AI cannot prevent geopolitical events from happening, and it is unable to completely eliminate supply chain disruptions.
As well as this, its effectiveness also depends on the ability of the project leaders themselves, who will still need to make the decisions.
Overall, AI can prove to be a very useful tool when it comes to managing and understanding supply chains around the world.
Geopolitical challenges are likely to remain a feature of an increasingly global supply chain. This means that construction firms need to adopt tools to help anticipate and respond to disruption.
AI, along with solid management and dependable teams, offers leaders a better chance at staying steady no matter what issues they face.
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