Application of Supply Chain in Construction Industry

Supply Chain Management

Group members:
Masood Anwar (17-IE-06)

Safdar Pervaiz (17-IE-11)

Hamza Latif (17-IE-32)

Hussnain Manzoor (17-IE-45)

Advisor:
Dr. Saif Ullah

DEPARTMENT OF INDUSTRIAL ENGINEERING

UNIVERSITY OF ENGINEERING AND TECHNOLOGY

TAXILA

June 2021

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 Undertaking
It is certified that End Semester project titled “Measuring Customer Agility from Online
Reviews Using Big Data Text Analytics ” is our own work. This work has not been presented
elsewhere for assessment. The material used from any other source has been properly
acknowledged.

Hussnain Manzoor Safdar Pervaiz

17-IE-45 17-IE-11

Masood Anwar Hamza Latif

17-IE-06 17-IE-32

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Abstract:
The construction supply chain plays a major role in the construction market competition.
Construction supply chain management assists enterprises by helping to improve
competitiveness, increase profits and have more control over the different factors and variables
within the project. This project discusses the construction supply chain characteristics,
challenges and problems supply chains encounter and the benefits of an integrated supply chain
in the construction sector. Supply Chain Management aims to improve trust and collaboration
among supply chain partners, thus improving inventory visibility and velocity, and is an
innovation that seems to be especially appropriate for construction projects. As in mainstream
management, construction management ideas about supply chains have been evolving with
corresponding influences from the theory of production, distribution, and strategic
procurement, but there has been little significant research on the extent to which the
construction industry is merging the supply chains and industrial organisation fields.

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 Acknowledgements

We would like to express our sincere gratitude to Dr. Saif Ullah for his solid efforts in initiation
of this project and his extended approach to give us familiarity with basics of condition
monitoring and instrumentation. Perhaps this motivation was really necessary for starting this
Project. We would also like to extend our gratitude to the faculty of Industrial Engineering
Department for their continuous support in the initiation of this project. Perhaps it was not
possible to successfully initiate this task without their kind advice and assistance that was
available at every moment.

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Table of Contents:
Abstract: ................................................................................................................................... 3
Acknowledgements .................................................................................................................. 4
Chapter I: Introduction ........................................................................................................... 9
Introduction: ......................................................................................................................... 9
Supply Chain Management:................................................................................................ 9
Customer: .......................................................................................................................... 9
Planning:.......................................................................................................................... 10
Purchasing:...................................................................................................................... 10
Inventory: ........................................................................................................................ 11
Production: ...................................................................................................................... 11
Transportation: ............................................................................................................... 11
Chapter II: Literature review ............................................................................................... 12
Background knowledge: .................................................................................................... 12
Chapter III: Preliminary Work ............................................................................................ 14
Materials management in Supply Chain and Logistics Management: ......................... 14
The role in construction:.................................................................................................... 14
Roles: ................................................................................................................................... 14
Role 1: .............................................................................................................................. 14
Role 2: .............................................................................................................................. 14
Role 3: .............................................................................................................................. 14
Role 4: .............................................................................................................................. 15
Construction supply chain characteristics: ..................................................................... 16
1. Converging supply chain: ....................................................................................... 16
2. Make to order supply chain: .................................................................................. 16
3. Fragmented supply chain: ...................................................................................... 16
4. Temporary supply chain: ....................................................................................... 16
The primary supply chain: ................................................................................................ 17
The support chain: ............................................................................................................. 17
The human resource supply chain: .................................................................................. 17
Construction Supply Chains And Construction Industry Problems: ........................... 17
1. Inappropriate selection criteria: ............................................................................ 17
2. Discontinuous and low demand problems: ........................................................... 17
3. Inappropriate allocation of risk:............................................................................ 18
4. Frequent changes in specification:......................................................................... 18

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 Supply chain management benefits in construction: ...................................................... 18
The weak links in supply chain construction: ................................................................. 18
Chapter IV: Survey Conduction........................................................................................... 20
Preparation: ........................................................................................................................ 20
Background demographics: .............................................................................................. 21
Familiarity with SCM methods: ....................................................................................... 21
Chapter V: Project Analysis ................................................................................................. 24
Importance-performance analysis:................................................................................... 24
Factors contributing to SCM success: .............................................................................. 25
Chapter VI: Conclusions ....................................................................................................... 26
References:.............................................................................................................................. 27
Appendix: The Questionnaire............................................................................................... 28

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Table of Figures:

Figure 1: Supply chain management.................................................................................... 10

Figure 2: Supply chain management role in construction ................................................. 15

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List of Tables:
Table 1: Overall Result .......................................................................................................... 22
Table 2: Performance-Important Analysis.......................................................................... 24
Table 3: Supply Chain Management Factors ...................................................................... 25

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 Chapter I: Introduction
Introduction:
The construction industry is extremely fragmented in many countries with problems including
the separation of design and construction, lack of coordination and integration between the
various functional disciplines and poor communication. The end result for clients of the
construction industry is dissatisfaction with outcomes in many cases and higher costs than
necessary. Traditional management approaches tend to dominate the construction industry,
unlike in the manufacturing industry, with little awareness of alternatives that might lead to
better outcomes.

The construction sector is one of the oldest industries in the world and is recognised for being
traditional and underdeveloped in many areas such as information technology, innovation and
supply chain management. The construction industries are divided into two categories:
a) large companies which are companies that tender for and/or undertake multimillion dollar
projects and b) small and medium companies, usually family owned and directed by the owner.
The establishment and implementation of contracts orientated towards SCM has increased the
construction industry‘s adoption of SCM practices. These include documents supporting the
formation of integrated teams and cooperative working in order to eliminate waste and deliver
project.

Supply Chain Management:

One of the most important aspects of the manufacturing process is supply chain management
(SCM). SCM is the streamlining of a seller’s supply-side activities in a way that provides good
value for the consumer as well as maximizing profit for the manufacturer. The supply chain
involves everything from the production of the product, the marketing involved, the MIS efforts
needed, as well as the shipping and delivery of the products. SCM is mainly made up of the
operations, procurement, IT and logistics departments, and how they come together to get a
product to market is the supply chain. The supply chain begins and ends with the customer. [1]

Customer:

Customers start the chain when they decide they want a product. The customer orders the
product from the company, which starts the chain moving. The customer will request the

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product on a certain date, in a certain quantity. If the product must be manufactured, the order
will go to the production facility.

Planning:
The customer sales order will combine with other orders and will go to the planning
department. The planning department will create a plan to fill the order. In order to manufacture
the product, raw materials will need to be purchased.

Figure 1: Supply chain management

Purchasing:
The purchasing department will purchase all the raw materials needed to produce the product
that the customer wants to buy. Purchasing will select from approved suppliers and place the
order. The purchase order will specify the quantity and date the raw materials must be
delivered.

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Inventory:
Once the raw materials are received, they are moved to a warehouse and stored, until they are
needed for production. Once delivered, the supplier will send an invoice to the buyer.

Production:
The company now has the raw materials needed to make the product. Manufacturing will take
the raw materials from inventory and manufacture the product. Once the product is
manufactured, it is moved to inventory to wait for transportation to the retailer.

Transportation:
Once the finished product is in the warehouse, it must get to the retailer. The company's
shipping department will find the most economical way to get the completed products to the
retailer and eventually the customer. Once the retailer receives the products, the manufacturer
will send an invoice for the products.
Supply chain management is the heart of the operation and must be done as efficiently as
possible. SCM is a large department in most companies, and it has some of he most valuable
employees. In order to make the process easier, most companies use SCM computer programs
to assist with the process.

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 Chapter II: Literature review
A supply chain is an actually a network between a company and its suppliers to produce and a
specific product to the final buyer. This network includes different activities, people, entities,
information, and resources. The supply chain also represents the steps it takes to get the product
or service from its original state to the customer. The scope of supply chains spreads in the
whole organization from the demand end of the customer and to the supply end of the supplier.
However, the core supply chain functions primarily relate to the demand and supply
management processes directly controlled by the enterprises.

Operations and supply chain management (SCM) appear as critical areas and play an efficient
role in the achievements. however, luxury companies take it as a serious challenge with respect
to the operations and Supply chain logistic management system. The combination of
conventional marketing activities to the logistics and production has become an inspiring topic.
This article provides the knowledge of concrete modeling of supply chain strategy in
companies which have focus on mainly fashion as well as to fulfill customers demand on time.
ANOVA results also shows that the performance areas based on the aspects of brand, retail
channel and product.

To meet competitive conditions, it is compulsory to implement “customer responsive supply

chain management” and “Agile supply chain management”. The aim of the paper is to critically
assess relevant theory and measurement of related agility, business relationships with another
on, buyer and supplier relationships and cooperative planning in this whole case study. The
paper shows several significant challenges to this recent theory and it demonstrate various
alternative propositions. [2]

Background knowledge:

SCM is defined as the “coordination of independent enterprises in order to improve the

performance of the whole supply chain by considering their individual needs”.
A typical supply chain involves a variety of stages which includes customers, retailers,
wholesalers/ distributors, manufacturers, and component/raw material suppliers and areas of
purchasing (or acquisitions); materials management, warehousing and inventory control,
distribution, shipping, and transport logistics.

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The separation of supply chain activities between different companies enables the development
of specialisation and economies of scale. Accordingly, many important issues and problems
need to be resolved for successful SC operations-the main purpose of SCM. The most
predominant of these concerns the uncertainties involved and the ability to co-ordinate several
activities and partners.

A central aspect of a successful SCM system concerns integration. In SCM,

this is characterized by cooperation, collaboration, information sharing, trust, partnerships,
shared technology, and a fundamental shift away from managing individual functional
processes, to managing integrated chains of processes.

A drawback of SCM is that maximising the efficiency of each chain does not necessarily lead
to overall system global optimisation. The inclusion of decisionmakers at various points along
the SC for example, does not usually result in perfect decisions due to lack of information or
personal hindrances. Decisions are also influenced by employee reward systems.

Implementing SCM can also be difficult. A number of obstacles have been identified,
including:

• Incentive obstacles: Incentives are offered, at different stages, to participants in

an SC which lead to actions that increase variability and reduce total SC profits.
• Information processing obstacles: These exist in situations where demand
information is distorted as information moves between different stages of the SC,
leading to increased variability in orders within the SC.
• operational obstacles: These relate to actions taken in the course of placing and
filling orders that lead to an increase in variability.
• Pricing obstacles: These exist in situations where the pricing policies for a product
lead to an increase in variability of orders placed.
• behavioural obstacles: These are related to problems in learning within organisations
that contribute to what has been termed the bullwhip effect. such problems are
often caused by the way the SC is structured and through faulty communication
between different stages.

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 Chapter III: Preliminary Work
Materials management in Supply Chain and Logistics Management:
“Materials Management’ is a term used to connote “controlling the kind, amount, location,
movement and timing of various commodities used in production by industrial enterprises”. In
supply chain, it is the planning, directing, controlling and coordinating those activities that are
concerned with materials and inventory requirements, from the point of their inception to their
introduction into the manufacturing process. Such as all the activities and inventory
requirements that collaborate with our concerned boutique business. [3]

The role in construction:

Introduced in the manufacturing industry SCM is a vital tool in controlling business processes
in a defined and systematic way to improve quality, save time and increase profit. On the other
hand, SCM processes in the construction industry are partially adapted and dispersed. These
roles can be identified based on the industry concerns, whether it is the entire supply chain.

Roles:
Role 1:
Improving the interface between site activities and the SC: It was previously reported that
among the clearest initiatives of SCM in construction has been in the field of logistics. That is,
the focus was on the co-operation between suppliers and contractors for improving the full flow
of material whereas the traditional treatment of construction logistics and material handling
had predominantly focused on activities occurring on site.

Role 2:
Improving the SC: This includes initiatives aimed at the development of specific SCs, such as
those of prefabricated concrete elements or elevators. In-depth cost and time analyses are
important for identifying potential improvement and for developing the SCs. When developing
the supply chain, the trade-off between transportation, inventory and production costs should
be borne in mind in order to achieve global improvement. Productivity and supply chain
performance are decreased by the following factors: uncertainty in the SC, varying site
conditions and varying capacity conditions.

Role 3:
Transferring activities from the site to the SC: This is another group of initiatives that aims at
redesigning transfer of on-site activities to the SC Industrialisation, especially prefabrication,

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can be regarded as a structural means for eliminating on-site activities from the total production
chain. Thus, the earlier actual initiatives towards industrialisation of construction must also be
seen as a form of SCM concentrating on the design of the SC.

Role 4:
Integration of site and SC: New alternatives have been suggested for the
integrated management of the SC and the construction site. These include open
building and sequential procedure. From a production point of view, the basic benefit of open
building is in the postponement of the decisions of users regarding the interior of the building.
This is realised by separating the infill from the structure. This also provides adaptability
for the remaining life cycle of the building so that users can reconfigure the space as their needs
change. In the sequential procedure, the idea is to structure the site work as successive
realisations of autonomous sequences (resembling group technology as developed in
manufacturing). In both approaches, the goal is to replace construction's usual temporary chains
with permanent SCs. Furthermore, pre-engineering is another related approach, where the
customer may choose a pre-engineered building from a certain range of options. The SCs
for such buildings are typically stable. Design-build arrangements , although more restricted in
scope, can also be classified in this group.

Figure 2: Supply chain management role in construction

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Construction supply chain characteristics:
Construction supply chains (CSC) can be very complex particularly in large projects. This
complexity, one of the main characteristics, can be attributed to the variety of site materials
and parties (suppliers and sub-contractors) required for a construction project. The project can
become more complex as more people get involved. i.e. first tier, second tier suppliers and
other tiers of sub-contractors etc. Moreover, there is a correlation between the increase of the
scope of the project and the complexity of the supply chain as more manpower, parties and
materials are necessary for the completion of the project. This requires a great deal of planning,
organising and collaboration between supply chain partners which may cause
the complexity. A large construction company may interact with hundreds or thousands of
suppliers and sub-contractors per a year in order to deliver a project.

1. Converging supply chain:

Normally in construction projects, operation capacity, documents, materials and so
on, are to be assembled and delivered to site by subcontractors and suppliers under supervision
of the main contractor. Usually, the end user is one or a limited number of people. As a
consequence, the CSC is converging in nature unlike the manufacturing supply chain, which is
most likely to be diverging.

2. Make to order supply chain:

Clients drive the creation of construction projects. This can be the result of the end user‘s
tradition to take the initiative and start a construction project. Therefore, end user becomes
involved in the whole production process.

3. Fragmented supply chain:

This characteristic is the main feature within this industry. Construction contractors, suppliers
and other participants are active in different stages, and the distribution of responsibility and
authority changes during the project.

4. Temporary supply chain:

For any construction project, on completion, all participants and companies involved are
normally dismissed and this can be traced to the project-based nature of construction.
Consequently, all participants in the project must finish their roles and duties. This short-term
partnership with different members may cause problems and fluctuations in performance and
productivity.

On the other hand, pointed out other CSC features as follows:

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The primary supply chain:
This delivers the materials that are incorporated in the final stage of the construction
process, such as: sub-assemblies, components, raw materials and electrical and mechanical
equipment.

The support chain:

This chain is responsible for providing expertise and equipment that smooth and facilitate the
construction process such as: scaffolding and excavation supports.

The human resource supply chain:

This is responsible for the supply of supervisory staff and labour as inputs to the construction
process.

Construction Supply Chains And Construction Industry Problems:

The construction industry and its supply chain suffer from many problems that affect it in a
negative way. Problems affecting the construction industry include budget overruns, delays,
low profit margin and many legal claims and counter claims. It is stated that -waste and
problems are largely caused by myopic control of the construction supply chain.

The CSC characteristics may antagonize the application of SCM to construction through
reinforcement of the problems. Therefore, further research and analysis of construction SCM
should be undertaken. Construction industry problems can also be seen in work from a demand
and supply perspective. They stated that problems in the construction industry resulted from
supply, demand, and common issues. Demand issues contain inappropriate selection criteria,
discontinuous and low demand problems, inappropriate allocation of risk and frequent changes
in specification.

1. Inappropriate selection criteria:

This problem refers to the practice of awarding a contract in the construction industry to the
contractor that offered the lowest price, disregarding the value of the offer. As a consequence,
the awarded contractor may provide lower quality and service which may lead to problems
such as: less trust, resistance to design changes and claims for additional fees.

2. Discontinuous and low demand problems:

The economic recession and the difficult financial situation leads to a decline in public
investment, which results in such problems occurring.

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 3. Inappropriate allocation of risk:
This refers to the imbalanced risk distribution in the project between the main contractor and
the client.

4. Frequent changes in specification:

This problem is due to the client and occurs while the project is underway. This
causes serious implications regarding the plan, cost and other factors. [4]

Supply chain management benefits in construction:

Modern-day approaches to methods involving the procurement process are the movement
towards an integrated supply chain. This method enables parties within the supply
chain to have goal congruence, through alignment of objectives, which in turn provides the
client with added value. Traditionally, the relationship between companies and the
client was by means of contracts only, with predetermined prices and predefined specifications.
Clients were not heavily involved, contractors were not motivated to work in the interest
of the client and often had one contract with the client and a separate contract with designers.
The movement towards an integrated supply chain enables provision of SCM to be wholly
incorporated. Benefits of integrated supply chains for companies are as follows:

• Cost reduction and waste reduction.

• Risk reduction, with a more certain final project cost.
• Value for client.
• Enables long-term planning.
• Ongoing business or repeat business (with client).

Ultimately, clients and end users gain by being party to an industry which facilitates users’
needs. Projects are completed in a timely manner to cost and defects are minimalized, resulting
in customer satisfaction and indeed a greater confidence in the construction industry.
Moreover, contributed that integrated supply chain in construction offers more control and aids
in cost reduction. [5]

The weak links in supply chain construction:

The weak links in supply chain are as follows:

• Adversarial relationships between clients and contractors.

• Inadequate recognition of the sharing of risks and benefits.
• Fragmented approaches.

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• Narrow-minded “win/lose” attitudes and short-term focus.
• Power domination and frequent contractual non-commitments resulting in adverse
performance track records with poor quality, conflicts, disputes, and claims.
• Prime focus on bid prices (with inadequate focus on life-cycle costs and ultimate
value).
• Less transparency coupled with inadequate information exchange and limited
communication.
• Minimal or no direct interactions that foster sustainable long-term relationships.

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 Chapter IV: Survey Conduction
Preparation:
In order to test the applicability and performance of SCM, it was decided to test the effects of
SCM on project performance. A scaled item-type questionnaire was used following a format
designed to facilitate an optimal response rate to questions. Moreover, the fixed alternative
type of question was included in the questionnaire to allow respondents to answer factual
questions such as type of organisation, size of organisation, supply chain components, size
of projects, cost of projects and time span of projects, which could then be statistically
analysed. However, such an approach for judging SCM applicability has not been used by
other researchers before. each process listed was so described as to avoid any misinterpretation.
special attention was given to the format, phrasing and arrangement of the questions to
minimise potential misunderstandings. Also, the style and layout of the questionnaire form
itself were given particular attention and a number of preliminary designs were investigated
during the study’s piloting exercises.[6]

Two formats were developed for the questionnaire, the difference being in the major question
examining the practicality of supply chain methods. In the first format, participants were asked
to rate their agreement or disagreement, expressed on a scale of 1 to 5, as to how each of the
supply chain processes helps managers to be successful in their projects. The second format,
aimed at examining the effects of each process on the degree of success of a project, within a
scale of 1 to 5, with a ‘1’ meaning ‘highly successful’ to ‘5’ meaning ‘barely satisfactory’.
A pilot study was carried out with two project managers possessing lengthy and relevant
experience. Based on the pilot test results, the second format was selected as it was believed to
be more effective in obtaining answers to the research questions due to the need to contextualise
responses. This was then used in a further pilot study with two project managers possessing
more that 10 years of relevant experience.

The final questionnaire contained the following ten questions: (See in appendix)

1. Type of organisation
2. Title of primary job
3. Years worked in the construction industry
4. Years worked as a project manager in the construction industry
5. Annual turnover of the organisation

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 6. References/frameworks which form the base for a company’s project management
procedures
7. The cost and time span of a typical project usually managed by the participants
8. supply aspects
9. Factors affecting project success
10. other factors contributing to the project success (optional). [7]

The first step in the data collection process was to compile a list of organisations which deal
with projects and have project managers. Many organisations considered the names of their
employees to be confidential and therefore refused to participate. Accordingly, it was decided
to make intensive contact by approaching all available addresses to improve the response rate.
These covered a variety of industries, including project management consultancies, building
contractors, civil engineering contractors, and consulting engineering firms. [8]

Background demographics:
The following background demographics apply:

• Types of organisations employing the respondents comprise government agencies

(39%), general contractors (13%), civil engineering contractors (11%), consulting
engineers (11%), property developers (11%), investment companies (7%), building
contractors (4%) and project management consultancies (3%).
• 53% of the respondents are managers and 22% engineers/designers.
• Almost 50% of the respondents have worked more than 15 years in construction
projects and 26% less than 5 years.
• All respondents manage projects, with 52% having more than five years work
experience as a project manager.
• Approximately 60% of the respondents’ firms have a turnover of over $100m, 17%
a turnover of $50m-$100m, 14% a turnover of $10m-$50m and. 9% less than $10
million. [9]
• 29% of respondents manage projects valued at $15-50 million, with 26% managing
projects valued at $5-$15 million.

Familiarity with SCM methods:

This question asked whether respondents were familiar with various sCM processes on a scale
of 1 (practically ignored) to 5 (extensively used) for (1) a “highly successful typical project”

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and (2) a “barely satisfactory typical project”. Table 1 summarises the responses. This shows
the majority of the processes involved in a highly successful typical project received an average
score of three and above, with the highest being 3.75 for schedule development analysing
activity sequences, activity durations, and resource requirements to create the project schedule.
This is followed by resource planning determining what resources (people, equipment,
materials) and what quantities of each should be used to perform supply chain management
activities (3.56) and the executives in my organisation have a good understanding of the
principles of supply chain management (3.53). The lowest score of 2.88 is for organisation
rewards increase consequently upon using supply chain management.

Table 1: Overall Result

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For a barely satisfactory typical project, some respondents were unable to answer as they had
no experience of such a project. For those that had, Table 1 indicates that only seven aspects
received an average score of above the value of 3.00, with the remaining aspects scoring
less than 3.00. on average, the highest valued process is that our executives demonstrated
willingness to change our way of doing business in order to mature in supply chain
management
(3.20), followed by schedule development analysing activity sequences, activity durations,
and resource requirements to create the project schedule (3.14) again, the organisation has a
system in place to manage both cost and time (3.13) and there is a relationship between firms
and their suppliers along the supply chain (3.11). There is a difference between the traditional
management and SCM (1.10), estimating the number of work periods that will be needed to
complete individual activities (1.14) and organisation rewards increase consequently upon
using supply chain management (1.15) received the lowest average scores.

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 Chapter V: Project Analysis
Importance-performance analysis:
An importance-performance analysis was used to determine the critical and non-critical factors,
with those importance factors above 3.5 being considered to be “critical”, and those below 3.5
as “non-critical”. Table 2 summarises the sC responses in terms of importance, performance,
mean gap and decisive factors. This identifies five critical factors with high importance factors
as defined above. These comprise: support of upper management (3.94), activity sequences
(3.75), customer need approaches (3.70), technical background (3.67), resource planning
(3.56) and understanding principles (3.53).

Table 2: Performance-Important Analysis

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Decisive factors are those with a very high mean gap. There are such three decisive factors
support of upper management (2.94), technical background (2.67) and customer needs (2.40).
These were considered by respondents to be the highest critical factors but at the same time
achieving a very low performance rating. The most likely reason for this discrepancy is the
traditionally low regard paid to these factors relative to foreign supply change
managers, and highlights the importance of the government’s role in creating policies,
regulations and an environment that allows local SCM to perform equally well.

In fact, the government now encourages local management to participate in conferences and to
provide scholarships for training courses and even higher degree scholarships in order to train
local managers in modern SCM issues. For a more comprehensive analysis, the data factors
with a mean gap of below 2.40 but above 1.90 were treated as secondary decisive factors. That
is change management (2.21), activity duration (2.08), procedures (1.98) and difference
between traditional management and SCM (1.92) – again pointing to the dominant inherent
conservatism of traditional practices. [10]

Factors contributing to SCM success:

This question aimed at identifying the limitations of SCM. The factors listed were rated by
asking respondents to score each of them as 0 (not applicable) or 1 (never) to 5 (very often) for
their frequency of contribution to the success of the project and the results are summarised in
Table 3. Understanding the SCM environment (retailers, manufacturer, raw materials) received
the highest score (3.97) followed by support from upper management (3.94), with following
company’s procedures in dealing with SCM (3.48) and distributors (3.48) being the lowest.

Table 3: Supply Chain Management Factors

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 Chapter VI: Conclusions
Supply Chain Management (SCM) aims to improve trust and collaboration among supply
chain partners, thus improving inventory visibility and improving inventory velocity and is
an innovation that seems to have potential value for the management of construction projects.
As in mainstream management, construction management ideas on supply chains have been
evolving with corresponding influences from the theory of production, distribution, and
strategic procurement, but there has been little significant research conducted on the extent to
which the construction industry is merging the supply chains and industrial organisation fields.

This has been addressed to some extent in the study reported in this paper involving the
survey of a sample of 72 construction industry personnel in the which found that the
majority supported the need to use SCM as a tool to meet project objectives. In addition,
the critical factors affecting the performance of supply chains were found to be support of
upper management: customer need approaches; supply chain technical background; and
following company procedures in dealing with supply chain management. Furthermore,
importance-performance analysis indicated the largest improvements needed to be in support
of upper management; activity sequences; customer need approaches; supply chain technical
background; and resource planning.

SCM provides the construction industry with opportunities to have more control on projects,
increase profits, and reduce time, cost and waste. The CSC consists of many groups, although
the material and the construction chains are the largest. Integrating the construction and
material chains helps in establishing more collaboration, smoother information flow
and more efficient information sharing through the construction chain which assists the
decision making process. SCM in the construction industry encounters many challenges linked
to poor logistics planning, lack of partnerships and strategic alliances with suppliers, resistance
to change and communication problems. In order to establish an efficient integrated supply
chain, clients, suppliers, contractors and other parties in the supply chain need to establish long
term partnerships, form transparent communication channels and benefit from each other‘s
experience for the greater good.

26
References:

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[2] Al-Hakim, l. (2007) Challenges of managing information quality in service
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[3] Ashish, A., ravi, s. (2002). Analysing alternatives for improvement in supply chain
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[4] Asplund, e., Danielson, u. (1991) räta ut byggsvängen (straightening the building
roundabout). sbuF, Stockholm.
[5] bennett, J., Pothecary, e., robinson, G. (1996) Designing and building a World-Class
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[6] bobroff, J., Campagnac, e. (1987) la Démarche séquentielle de la sGe-bTP (The
sequential Procedure of sGe-bTP). Plan Construction, Paris..
[7] Chan, F.T.s., Qi, H.J. (2003). An innovative performance measurement for supply chain
management. Supply Chain Management: an International Journal, 8(3):209-23.
[8] Fisher, N., Morledge, r. (2002) Supply chain management. Best Value in Construction.
Blackwell science, rICs Foundation.
[9] Hyland, P.W. (2003) Continuous improvement and learning in the supply chain,
International Journal of Physical Distribution and Logistics Management, 33:316-35.
[10] love, P.e.D., Irani, Z., edwards, D.F. (2004) A seamless supply chain model for
construction, Supply Chain Management: an International Journal, 9(1):43–56.

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 Appendix: The Questionnaire
Q1 – What type of organisation do you work in?

1. Government agency
2. Building contractor
3. Civil engineering contractor
4. Consulting engineering
5. General contracting
6. Property developer
7. Project management consultancy
8. Investment company
9. Manufacturer
10. IS/IT
11. Mining
12. Other. (Please specify)

Q2 – What is your primary job title?

• Management (including project/contract/equipment/service/transport/other technical or

operating
manager).
• Engineering/Design (including Chief/mechanical/planning engineer, Chief Designer,
other
engineering/design title).
• Title allied to the field (architect, consultant, surveyor, research and development,
supervisor,
superintendent, inspector or other allied title).
• Other (please specify).

Q3 – How long have you been working in construction industry projects?

Q4 – How long have you been working as a project manager in construction?

Q5 – What is the annual turnover of your organisation? (If possible)

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Q6 – What is the orientation in your organisation construction management procedures?
(You can tick more than one)

Experience / SCM / Consultant-vendor supplied / other (Please specify).

Q7 – Consider a typical project you usually manage and answer the following question:

Q8 – How much does a typical project cost?

Q9 – How long does it take to complete a typical project?

Q10 - Please add other factors you have found which contribute to the supply chain
management success in practice (optional).

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