Contractors' supplier management: construction materials supply chain management
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Abstract:
Within the total quality management (TQM) philosophy of continuous improvement, adding greater value, improving quality, reducing costs and reducing construction schedules are no longer mutually exclusive customer requirements. These demands are forcing changes in management approaches in the construction industry. It is now recognised that such gains in efficiency cannot be achieved by companies acting independently. This awareness has drawn attention to the concepts of `supply chain management`. Findings of research performed to investigate materials supply chain management practices by the top UK contractors are reported. While there is evidence pointing to a trend towards supply chain integration, it is revealed that entrenched practices and attitudes among UK contractors still impede full supply chain integration in the supply of construction materials.Keywords:
Materials management
Total Quality Management
Forcing (mathematics)
Value chain
Value (mathematics)
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Over the past decade, the UK construction industry has sought to exploit the rewards of supply chain management practice. This paper explores construction industry capability to implement an extended construction supply chain culture. Where commercial solidarity prevails and integrated supply chains, including small and mediums sized enterprises (SMEs) vie for construction projects and economic advantage. Despite recent advancements in construction supply chain management many barriers continue to inhibit the realisation of fully extended construction supply chains. Economic, social and cultural conventions require to be investigated to appreciate the complexity associated with the strategic alignment of extended supply chain stakeholders interests. Drawing on a model of supply chain maturity, the practicalities of extended construction supply chain relationships, rewards and risks are reviewed. Given the current structure of the construction industry, it is proposed that the attainment of extended construction supply chain management practice will require key industry stakeholders to develop innovative collaborative policies that will be progressive, organisationally supportive and commercially attractive to SMEs.
Realisation
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Supply chain in construction is term which means interrelated hierarchy of supply contracts necessary to produce a built asset. Managing the supply chain involves understanding the breakdown of product, services, organizations, resources, activities that are engaged in construction of the project and it increases control and profit of the project. The importance of supply chain management is very effective in context of improving companies’ performance. Although construction industry is difficult field as every project is dramatically unique prototype with different types, sizes and complexions developed by team of consultants but with construction supply management it becomes easy to tackle the challenges coming the way. This paper discusses the hurdles in project without supply chain management, components and benefits of supply chain management in construction sector.
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Supply chain management is the management of the flow of goods and services from the point of origin to point of consumption. It includes the storage and movement of work-in-process inventory, finished goods and raw materials. Supply chain management involves integrating and coordinating such flows both among companies and within companies. Reduction of inventory is said to be the ultimate goal of any effective supply chain management system. Sophisticated software systems with Web interfaces are competed with Web-based application service providers as a solution for successful supply chain management, who promise to provide all of the Supply chain management service for companies. Sustainable supply chain management is a holistic viewpoint of supply chain technologies and processes that go ahead of the spotlight of inventory, traditional views of cost and delivery. This budding philosophy is based on the principle that practices and socially responsible products are not only excellent for the environment but are rather important for long-term profitability. There are various parameters which influence in the implementation of the sustainable supply chain management practices across different industries. In spite of realization of the fact that the organizations have to adapt sustainable practices in order to ensure long term stability and to gain competitive advantage, the organizations are lagging behind with the implementation. The influence for the adaptability of sustainable supply chain management practices is buffeted with challenges of pressures/drivers, enablers, barriers and impact measurement variables.
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Supply chain management (SCM) is a concept that has flourished in manufacturing, originating from Just-In-Time (JIT) production and logistics. Today, SCM represents an autonomous managerial concept, although still largely dominated by logistics. Previous initiatives to advance the construction supply chain have been somewhat partial. The generic methodology offered by SCM contributes to better understanding and resolution of basic problems in construction supply chains, and gives directions for construction supply chain development. The practical solutions offered by SCM, however, have to be developed in construction practice itself, taking into account the specific characteristics and local conditions of construction supply chains. Construction supply chain management's potential for contributing to profitability. Construction supply chain has gained significance because of the increasing number of potential complex private and public sector construction projects. In the construction process costly delays in materials, equipments, and services erode profits. Construction supply chain management through the integration and coordination of materials, information, and money flows between the various project partners resolves delays and offers a new means of increasing profitability. CSCM's emphasis on information sharing and communications fosters cooperation and collaboration among supply chain members. Project management and execution are the final tests of how well the supply chain is working. Tracking progress in the field ensures that a project will be on-time and under- budget and within specifications. Sharing field measurements with all members in accordance with supply chain values is the final predictor of a profitable project.
Materials management
Information Sharing
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In a very competitive and complex industry like the construction industry with demands for the delivery of top quality projects at very competitive prices, a significant need for an effective management of the construction supply chain has arose.Construction Supply Chain Management (CSCM) is a very promising approach to successfully achieve integration between the several disciplines of the chain (i.e.internal and external suppliers, designers, vendors, contractors, subcontractors and internal and external clients).Big international construction companies have carried out extensive research and developed computer based platforms to experiment the recent Supply Chain Management (SCM) concepts.Even though SCM in the manufacturing industry has been widely researched and developed, the application of the same concepts to the construction industry shows problems in construction supply chains are extensively present and persistent.Analysis of these problems has shown that a major part of them originate at the interfaces between the various disciplines or functions and the complex nature of the construction environment.The aim of this research study report is to provide a set of propositions for improving construction supply chain management such as benchmarking, improvement of suppliers/subcontractors performance, elimination of waste, training and information sharing between parts of the supply chain.The study includes the literature review regarding the trends of the supply chain management in construction industry, the specific characteristics and problems in coordinating construction supply chain and finally it suggests improvements in supply and demand management based on integration, collaboration, information sharing and trust.
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Supply chain management and logistics management have proven successful in the manufacturing industry, with improved productivity as a consequence. However, in the construction industry these issues have not been high on the agenda. This may be one reason why the construction industry lags behind the manufacturing industry in terms of productivity. The good thing is that there is a growing interest for managing the construction supply chains. The basic idea in this thesis is not to come up with new logistical principles, but to learn from the existing performance in the manufacturing industry. A theoretical framework concerning general supply chain management and logistics issues is presented. This includes nine logistical principles, which have been acknowledged by the manufacturing industry. Previous academic reports concerning supply chain management and logistics in the construction industry are analysed with the general theoretical framework as a basis. In addition to this literature review two case studies have been conducted. Both case studies involve a supply chain starting at the manufacturer and ending at the client. The first case regards radiators and the second case regards installation cable. Common for both cases is that they represent groups of material which have shown a historic high cost increase. The results confirm that supply chain management has still not been widely spread, and was not implemented in either of the two supply chains studied. However, there were signs among the client and the building contractor in the first supply chain of an emerging focus on the supply chain performance, which very well may lead to the adoption of supply chain management. Both case studies show similar results that the wholesalers offer excessive service when delivering stocked material within a day from receiving the order. This is a consequence of the contractors’ lack of establishing detailed delivery dates early in the projects. This thesis has come up with several suggestions for improvements in the supply chains, which all together shows that there is much to gain in starting to manage the supply chains and avoiding sub-optimisation. (Less)
Manufacturing
Materials management
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Supply chain management (SCM) has experienced considerable success in the industrial sector. Supply Chain Management aims to increase confidence among supply chain partners, thereby increasing the speed of inventory, and is an innovation that seems to be particularly suitable for construction projects. As the construction industry is a key social and economic activity in each region, the implementation of SCM strategies is deemed to be helpful in achieving greater competitiveness for construction firms. Construction is an undertaking worldwide, with many distinctive aspects and radically different types of projects, sizes and complexities. While current literature indicates that generic supply chains should be easy and linear, in the construction sector, the reality is very different. When providing a solution to the end customer, every construction company needs to incorporate a variety of construction supply chains and markets. Therefore, the purpose of this paper is to review current research and synthesize key methods and results in order to provide recommendations for future research related to construction supply chains. Specifically, the aim of this review is to screen existing studies (published in 2000-2020) with regard to their a) level of analysis b) research emphasis c) type of study / paper d) sample used e) relationships examined and f) the various types of construction subjects covered and linked to supply chains.
Sample (material)
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UPPLY chain management (SCM) is a concept that has originated in the manufacturing industry to control logistics. It represents a management process by which enterprises administer and control the worldwide network of suppliers, factories, warehouses, distribution centers and retailers through which raw materials are acquired, transformed and delivered to customers. In construction, procurement and procurement related activities occur during all phases of a construction project. Because of inevitable complexity and fragmentation of the construction process, supplies of resources like equipment, labor, material and other services may not be always available on time, in right amounts and in the desired quality and price. An overall management process like supply chain management is essential to monitor and control all such logistic activities. The concept of supply chain management in construction outlining its origins in manufacturing is introduced in this paper. The effectiveness of the supply chain management has been evaluated with its potential benefits to the construction industry. A list of possible barriers, which may affect the application of supply chain management concept in the construction industry, has also been presented. Finally, a simplified model for supply chain management in the construction industry is presented.
Scope (computer science)
Materials management
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Abstract This paper will provide an introduction to the argument that there is considerable evidence of poor thinking within the construction industry. The failure to understand the circumstances that are facing industry players will prevent clients, contractors and suppliers from achieving their own objectives. The current problems are further compounded by the advice espoused by the government‐sponsored industry reports advocating generic approaches. In response to these problems the paper will provide practitioners with a theoretical framework for understanding: the structure of the industry and its constituent supply chains; the attributes of buyer and supplier power; the appropriateness of certain relationships according to the firm's power position within the construction supply chain; and, the circumstances where the recent industry initiatives and an integrated supply chain approach may be implemented with success.
Argument (complex analysis)
Position (finance)
Common sense
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In 1998, a government‐sponsored review of the UK construction sector called for the adoption of initiatives from manufacturing industry in order to increase productivity and reduce costs. Subsequent research has focused on how supply chain management practices could be implemented effectively by clients, consultants and large contracting organisations. However, little attention has been paid to the integration of small and medium‐size enterprises (SMEs) in the subcontractor and material supply sectors. This paper presents the findings of research that focused on the role of these SMEs in re‐engineered construction supply chains. It was found that significant barriers exist to supplier integration within the construction sector, which stem from SME scepticism over the motives behind supply chain management practices. It is suggested that the industry must make greater efforts to extol the mutual benefits of supplier integration to SMEs if significant performance improvement is to be achieved.
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