A supply chain consists of different activities, stakeholders, information, and resources to produce and deliver products. It includes transforming raw materials into finished goods, transporting them, and distributing the commodities to the end-users.
A smooth flow in the supply chain promotes satisfaction and fosters relationships among stakeholders. However, numerous factors can disrupt the different stages of this network, causing a domino effect in various industries. These disruptions can lead to inflation and the inability of suppliers to keep up with the soaring consumer demand.
For example, when the COVID -19 pandemic hit, it led to severe economic effects that negatively impacted the supply chain of the construction and engineering sectors in New Jersey. The multiple lockdowns and operational limitations interrupted many construction projects and the production of resources in this industry.
In addition, the supply chain mess and inflation issues caused homeowner’s associations (HOAs) to prolong the completion of maintenance and repairs for common areas under their jurisdiction. The country’s high inflation rate entails that the HOAs’ current financial reserve might already be outdated. In December 2021, the US inflation rate peaked at 6.8% – the highest since 1982.
Given this information, HOAs need to hire a structural engineer NJ to conduct a reserve study to help them determine the new estimated costs required to cover their projects. Promptly ordering a reserve study helps the association plan for future activities in the community and avoid the need to look for other financial sources, especially if the project is due soon.
With an updated New Jersey reserve study, HOAs can also increase their reserve budget’s standards to prepare for unforeseen events moving forward. They can also prevent special assessments and mismanagement claims stemming from outdated reserve studies.
Learn more about the impact of inflation and supply chain problems to reserve studies with this infographic provided by Lockatong Engineering.