Paving The Way For The Digitalization Of The Building Products Industry

Folkert Haag

The building products and building materials industries produce and deliver goods used to build homes and offices. This includes everything from cement or concrete foundation materials to roofing boards and shingles. It includes lumber, insulation materials, drywall, plumbing fixtures, flooring, and furniture. Like many other industries, the building industry is evolving as digitally driven trends and challenges emerge.

Let’s examine a few of these trends.

Increased customer engagement

One of the most significant trends shaping the building industry today is the rise of informed, digital-savvy consumers. Consumers today have access to more information than ever, and they’re asking for more. This includes data on designs and materials particularly for eco-friendly (sustainable) materials. Consumers want to be updated on materials, the location of supplies, and delivery schedules.

Increased supply chain access

The preferred medium for consumer communications is mobile, and consumers want to communicate with both the builder and individual parts suppliers. They want to be involved in the selection of materials, which may be purchased through a retail or online provider. Consumers are starting to use augmented or virtual reality apps to visualize products in their home. Leveraging this trend requires a fully integrated digital supply chain.

Data as a cost and risk management tool

A side effect of adopting digital technologies is that the building products industry has begun producing lots of data. As integrated digital supply chains have emerged, this data has become a great source of insight. From production to delivery to installation, materials can now be tracked and traced end-to-end. From a cost and risk management perspective, more data means more visibility. This includes visibility into materials and the vehicles used to deliver them. The goal is to deliver the right commodities or products at the lowest cost exactly when and where they need it.

Rule breakers are emerging

Like most industries, the building products and building materials industry has its share of rule breakers with the potential to disrupt the status quo. Tesla now offers solar roofing and large-capacity battery solutions for homeowners. Amazon has recently increased its efforts to sell furniture in North America, enabling them to compete with traditional brick-and-mortar furniture retailers. It also allows them to better understand customer behavior and offers the opportunity to own more of the customer experience. Competition can also arise from companies like UPS, which are moving into delivery and the local production of 3D products.

Innovative companies need to explore new relationships. They must look differently at the supply chain. And they must explore new operational models to offer their products cheaper and to a large customer base. Increasingly, they must find ways to target consumers directly and bypass big-box retailers.

The industry must adapt

The building products industry faces many challenges that add complexity to the supply chain. Digital technology helps drive customer relationships, business process efficiency, innovation, and growth. Successful leaders must embrace technology to survive and thrive. For example:

  • The cloud offers the ability to collect and share massive amounts of Big Data from throughout the supply chain and construction site.
  • The Internet of Things (IoT) offers the ability to gather sensor data on vehicle fleets, maintenance requirements, and real-time tracking of products in transit, ensuring more efficient project planning.
  • Predictive analytics and machine learning offer the ability to uncover operational patterns and behaviors to drive proactive adjustments to the supply chain.
  • Design thinking offers the ability to reimagine both products and processes that place the customer first.

In order for companies in the building materials industry to be successful, they must embrace new technologies. That includes Big Data and the Internet of Things (IoT). That means they must be prepared to go digital.

Learn how to bring new technologies and services together to power digital transformation by downloading The IoT Imperative for Energy and Natural Resource Companies. Explore how to bring Industry 4.0 insights into your business today by reading Industry 4.0: What’s Next?


Folkert Haag

About Folkert Haag

Folkert Haag is the global lead for building materials industries at SAP, and is part of the solution management team of the mill products and mining industry unit.