Supply Chain Management And Logistics In Construction

Every major industry except construction uses logistics to improve its bottom line... Poor logistics is costing the construction industry at least £3 billion a year according to a report – ‘Improving Construction Logistics’ – published by the Strategic Forum for Construction. Additional costs arise as a result of operatives waiting for materials, and skilled craftsmen being used for unskilled jobs. Inadequate management of logistics also has an adverse effect on quality, causes delays to projects, and adds to the health and safety risks on site. This practical book highlights the benefits of good logistics as well as the use of consolidation centres on projects. It shows how reduction in transport movements, less money tied up in stock, less waste, and the more efficient use of skilled craftsmen will reduce the cost of projects, reduce construction time, improve quality, reduce risks to health and safety, improve environmental performance and generally improve the image of the industry. The authors offer practical ways of achieving these benefits through integrated project teams and supply chains and the increased adoption of information technology including electronic communications, bar coding, and electronic tagging for tracing products. They also show how specific roles for each part of the industry can help to improve logistics. • Practical, clear and accessible • First book to address logistics in construction • Written by the industry-recognized logistics experts • Tackles issues of key concern: efficient use of labour; sustainability; waste and supply chain management

The construction logistics manager plays an increasingly central role in the construction process. In fact, their decisions can crucially affect the success or failure of a project. Recognition of the critical role they play has spurred evermore interest in this budding field amongst both researchers and practitioners. An accessible text on construction logistics, Supply Chain Management and Logistics in Construction provides essential guidance and expert advice for construction managers, as well as researchers and students in the field. This important new title looks at arrangements with suppliers, the use of returnable packaging and off-site manufacture and assembly, IT systems used to manage the supply chain and logistics operations, such as delivery management systems, warehouse management systems and material planning and forecasting systems. It also considers aspects of the contractual relationships between client, developer, main contractor and lower-tier contractors, all of which have an impact on how the supply chain is managed. In addition to providing a range of fresh ground-breaking case studies, the book features contributions from leading experts in the field who have been involved in projects with companies such as TFL, BAA, The Red Cross, as well as big construction programmes such as the Olympics and Cross Rail.

The construction industry is associated with problems such as low productivity and high costs. This has been highlighted in several government-funded reports in both Sweden and in the UK during the course of over two decades. The construction industry is a large industry sector employing hundreds of thousands and a large contributor to a country’s GDP. The problems therefore have a large impact on society. Some of the problems are rooted in the organizational structure of the construction industry. Compared to other manufacturing industries, the construction industry is organized in temporary organizations. The temporary organizations cause temporary supply chains, fragmentation among construction industry actors and adversarial relationships between those actors. Partnering has been but forward as a solution to overcome the temporariness and the adversarial relationships in the construction. Another solution to mitigate the problems suggested in the reports is supply chain management (SCM). Both concepts have been taken from the manufacturing industries and partnering has been more successful compared to SCM in the construction industry. In the construction industry the progress towards SCM has focused on logistics. In recent years dedicated third-party logistics (TPL) solutions have emerged in the Swedish construction industry, where a company is hired to manage the logistics in a construction project. The purpose with the research presented in this licentiate thesis is to explore how client initiated TPL solutions and partnering can be facilitators for SCM in the construction industry. Being a new phenomenon in the construction industry TPL solutions provide a logistical competence not necessarily included in a traditional construction project. Therefore, TPL solutions are of particular interest when studying the realization of SCM in the construction industry. In the process of realizing SCM in the construction industry, the construction clients have been put forward as having a crucial and important role. The clients are the initiator and funder of construction projects and as such the client can influence the course of a construction project. Therefore, it is of interest to study how the client can take an active role in this process. Initiating a TPL solution in a construction project is one way for a client to take an active part in the realization of SCM in construction. However, in order to study how clients can take an active role towards the realization of SCM in the construction industry, there have to be an understanding of how SCM is to be adopted to the construction industry context. SCM that derives from the manufacturing industry is designed to be used in long-term relationships with permanent organizational structures. The construction industry on the other hand is associated with short-term relationships and a temporary organizational structure. Partnering that is designed to mitigate the temporariness and establish long-term relationships have been quite successful in the construction industry, and could therefore be used as a facilitator for SCM in construction. To study the use of client initiated TPL-solutions in construction and the realization of SCM in the construction industry the following research questions have been addressed: RQ1: To what extent can a third-party logistics solution be a facilitator for client driven SCM in the construction industry?RQ2: How will upstream and downstream tiers be affected when a thirdparty logistics provider is used in a construction project?RQ3: How can partnering be used a mean to facilitate the realization of SCM in the construction industry? To answer the research questions two main methodologies have been used; case study for the empirically grounded research and conceptual studies for the analysis of the case studies as well as for comparing the two concepts of partnering and SCM. All questions have been grounded in literature and previous research. The findings of this research is therefore grounded in both theory and in practice. The main findings of this research is that TPL solutions are not a quick fix for realizing SCM in the construction industry. However, if used right a TPL solution can be an effective tool to address logistical issues in a construction project and to establish an interface between the supply chain and the construction site. By initiating a TPL solution the client addresses the importance of logistical competence in a construction project. A TPL solution does not have a purpose of its own; a TPL solution is a service function to the construction project, providing expertise on logistics management. There are also a number of driving forces and concerns that have been identified, if they are addressed prior to a TPL solution is implemented, the likelihood of its success will increase. Furthermore, both partnering and SCM rely on high trust and share several key components and issues that have to be addressed. Partnering on strategic level with several suppliers included can even be hard to distinguish from SCM. Wherefore, partnering is considered a facilitator for the realization of SCM in construction. By addressing the necessary issues in both concepts a good foundation for SCM is established.

Supply chain management (SCM) has been stressed as a remedy to many of the underlying issues in the construction industry. However, the positive examples where SCM has been successfully utilised and diminished the lingering issues in construction is scarce. The question is why. Previous studies have stressed the importance of planning both the construction project as such but also the supply chain and the logistics. As an important part of SCM, supply chain planning (SCP) focuses on planning different aspects of the supply chain through involving different members of the supply chain in the planning process. SCP in construction is scarce as the planning of the logistics in general. Failing to plan the supply chain, involving supply chain members in the planning, and integrating the processes of planning the supply chains and the construction project can be one reason for the low numbers of successful SCM adoption in construction. In improving the SCP in construction, this thesis develops a SCP framework for construction that involves the main contractor, subcontractors, and suppliers. The aim is to improve SCP, collaboration, and eliminate many of the common problems in construction through a SCM and SCP perspective. The developed framework is based on an existing planning framework for sales and operations planning. This framework is generic and synthesises planning in general. It consists of identifying/developing: outcomes, input, organisation, process, key performance measurements, and IT-tools. It is thus necessary to investigate what these aspects means in a construction context. Four research objects will be fulfilled: Objective 1. Identify common logistical problems and linkages between them Objective 2. Develop a SCP process Objective 3. Develop a SCP organisation Objective 4. Identify performance measurements

With the current urbanization trend, there is an increased need for city development, i.e. to build apartment buildings, hospitals, schools and infrastructure in cities and urban areas to meet the rising demands. At the same time, land is increasingly seen as a finite resource. This has led to the regeneration of decommissioned industrial-use land for development purposes. This means that multiple individual construction projects are being built in the same or nearby areas during the same time-period. However, the end products of construction projects are produced at their place of consumption, which means that large quantities of materials and resources need to be delivered to, and removed from, each construction site. This leads to new transport flows being created in connection to city development. These transport flows need to be coordinated to ensure efficient construction productivity and reduce the transports’ environmental and social impact on the urban transport system. At the same time, it is important to ensure that construction sites can be managed from a logistics perspective without impairing efficiency due to the challenges of building in urban environments. One way of managing logistics to and from construction projects in city development is through so-called construction logistics setups (CLS). However, the implementation of CLS’s affect many different stakeholders and the interorganizational relationships between them. The implementation of CLS’s therefore faces three challenges; management of transport to and from construction sites, management of logistics at construction sites, and managing the interorganizational relationships amongst construction project stakeholders. The development of CLS’s is often undertaken by mimicking previous setups as there is currently no guiding procedure for developing and implementing CLS’s. To reduce the ad hoc approach to developing and implementing CLS’s, the purpose of this dissertation is to propose a framework for developing construction logistics setups. The purpose is fulfilled with the aid of the following four research questions: RQ1: Taking the perspectives of different stakeholders’, why are CLS’s implemented? RQ2: What type of CLS services are offered? RQ3: How can performance effects of CLS’s be measured? RQ4: How do CLS’s affect the identified challenges of managing the transports to and from construction sites, managing logistics at construction sites, and managing the interorganizational relationships amongst construction project stakeholders? To answer the research questions, three main methodologies have been used; literature reviews to inform the background of the studies and develop analytical frameworks, and case study and Delphi research for the empirical studies. In fulfilling the research purpose, the findings of this dissertation suggests that when developing a CLS, three activities need to be considered; 1. setting the scope of the CLS, 2. deciding on the structure of the CLS, and 3. managing the interorganizational relationships of the CLS. These activities are the foundation of the developed framework. The contents of the activities were derived through the research questions. When answering RQ1, it was found that contractors implement CLS’s to ensure construction productivity, developers implement CLS’s to reduce disturbances to businesses and residents nearby, and municipalities implement CLS’s to reduce disturbances to third-parties and to reduce the impact from construction logistics on the urban transport system. These stakeholder drivers for implementing CLS’s will impact the scope of the CLS. Furthermore, the scope of the CLS was found to be dependent on both the contextual considerations of the CLS in terms of physical context at site and in terms of what is being built, as well as the organizational context in terms of what stakeholders are part of the project, where in the hierarchy the CLS is located, and what level of mandate the CLS has. The scope will also set the terms for how transports are managed through the CLS. If for instance there is limited space at site, this can imply that time-planned deliveries are favoured. In answering RQ2, it was found that as a consequence of what transport management approach is chosen, the structure of the CLS will differ. This dissertation shows that asset-based setups are similar to traditional logistics outsourcing and TPL in which physical distribution services are offered. Non-asset based services on the other hand act more as supply chain orchestrators similar to fourth-party logistics service providers. In these cases, supplied services are aimed more at ensuring that the right services and capabilities can be procured for the CLS. One value-adding service that was found crucial to include in CLS’s is a joint booking and planning system. Having this type of support systems will allow the CLS to coordinate the different stakeholders connected to the CLS. Related to the structure of the CLS, RQ3 suggest that performance needs to be monitored for deliveries, on-site logistics, and the coordination of logistics activities on and off site. The performance monitoring needs to be developed from a logistics point-of-view, taking into consideration the different stakeholders’ perspectives. Finally, in answering RQ4, it was found that a CLS can affect the identified challenges positively. In essence, a CLS aims at managing construction logistics and if developed and implemented from this notion, transports to and from site as well as on-site logistics management can become more efficient. Additionally, the dissertation shows that CLS’s can help in managing the interorganizational relationships within the construction project(s). However, this builds on the notion of having well-developed and communicated service offerings and regulations, e.g. through business and governance models. It was also found that the activities of the framework are interrelated and dependent on one another, suggesting that developing construction logistics setups is an iterative process. The proposed framework should thus be seen as a guideline for how to develop the setup, allowing for adaptations of the setup to the context for which it is developed. Med pågående urbaniseringstrend finns det ett ökat behov av att bygga bostadshus, sjukhus, skolor och infrastruktur i stadsområden för att möta de ökande behoven. Samtidigt ses mark allt mer som en ändlig resurs. Detta har lett till att avvecklad industriell mark tas i anspråk för förtätning och storskaliga stadsutvecklingsprojekt där flera enskilda byggprojekt byggs i närliggande områden under samma tidsperiod. Byggprojekt produceras dock på konsumtionsplatsen vilket innebär att stora mängder material och resurser måste levereras till och tas bort från varje byggarbetsplats. Detta leder i sin tur till att nya transportflöden skapas i samband med stadsutveckling. Dessa måste samordnas för att säkerställa effektiv byggproduktion samtidigt som transporternas miljömässiga och sociala påverkan på det urbana transportsystemet kan minskas. Samtidigt är det viktigt att byggarbetsplatserna kan hanteras ur ett logistikperspektiv utan försämrad effektivitet på grund av det urbana läget. Ett sätt att hantera logistiken till och från byggprojekt inom stadsutveckling är genom så kallade bygglogistiklösningar (BLL). Dock påverkar införandet av BLL många olika intressenter och de interorganisatoriska relationer dem emellan. Införandet av BLL ställs därför inför tre utmaningar; att hantera transporter till och från byggprojekt, att hantera logistiken på byggarbetsplatser och att samordna de interorganisatoriska relationerna mellan byggprojektets intressenter. Utvecklandet av BLL utgår ofta från tidigare lösningar då det i nuläget saknas riktlinjer för hur man kan utveckla och implementera lösningarna. För att minska den här ad hoc-strategin för utvecklandet av BLL är syftet med denna avhandling att föreslå ett ramverk för att utveckla bygglogistiklösningar. Syftet uppnås med hjälp av följande forskningsfrågor: FF1: Utifrån olika intressenters perspektiv, varför implementeras bygglogistiklösningar? FF2: Vilken typ av bygglogistiktjänster erbjuds? FF3: Hur kan bygglogistiklösningars prestanda mätas? FF4: Hur påverkas de tre identifierade utmaningarna av implementeringen av bygglogistiklösningar? Hur påverkar bygglogistiklösningar de identifierade utmaningarna med att hantera transporter till och från byggprojekt, att hantera arbetsplatslogistiken och att samordna de interorganisatoriska relationerna mellan byggprojektets intressenter? För att besvara forskningsfrågorna har tre huvudmetoder använts; litteraturgranskningar för studiernas bakgrund och att utveckla analytiska ramverk, och fallstudieforskning och Delphi-forskning för de empiriska studierna. I uppfyllandet av syftet föreslår avhandlingen att tre aktiviteter måste övervägas när man utvecklar en BLL; 1. fastställa omfattningen av BLL, 2. besluta om BLL-strukturen och 3. hantera interorganisatoriska relationerna i BLL. Dessa aktiviteter är grunden för det utvecklade ramverket. Innehållet i aktiviteterna härleddes genom forskningsfrågorna. I besvarandet av FF1 befanns att entreprenörer implementerar BLL:er för att säkerställa byggproduktivitet, byggherrar implementerar BLL:er för att minska störningar för företag och boende i närheten, och kommuner implementerar BLL:er för att minska störningar för tredje part och för att minska påverkan från bygglogistik på det urbana transportsystemet. De identifierade drivkrafterna för att implementera BLL:er kommer även att påverka BLL:ens struktur. Avhandlingen visar att BLL-strukturen är beroende av kontextuella överväganden med avseende på arbetsplatsens fysiska egenskaper samt vad som byggs, såväl som den organisatoriska kontexten med avseende på vilka intressenter som är del av projektet, var i hierarkin BLL:en placeras och vilken mandatnivå BLL:en har. BLLomfattningen sätter även villkoren för hur transporter hanteras i projektet. Om utrymmet exempelvis är begränsat kan detta innebära att tidsplanerade leveranser premieras. I besvarandet av FF2 befanns det att en konsekvens av hur transporthanteringen läggs upp så kommer BLL-strukturen att påverkas. Den här avhandlingen visar att fysiska logistiklösningar liknar traditionell outsourcing av logistik och TPL där fysiska distributionstjänster erbjuds. Icke-fysiska logistiklösningar fungerar mer som försörjningskedjeorkestratorer och påminner om fjärdepartslogistiktleverantörer. I dessa fall syftar de erbjudna tjänsterna mer till att säkerställa att rätt tjänster och kapacitet kan erbjudas genom BLL. En värdeadderande tjänst fanns vara en grundförutsättning för BLL:er, nämligen gemensamma boknings- och planeringssystem. Ett sådant system hjälper BLL-operatören i koordinationen av de olika intressenterna som är kopplade till BLL:en. I framtagandet av BLL-strukturen föreslår FF3 även att logistikprestanda måste följas upp i processerna leveranser, arbetsplatslogistik och samordning av logistikaktiviteter på och utanför byggarbetsplatsen. Prestationsutvärderingen måste utvecklas ur ett logistikhänseende med hänsyn tagen till de olika intressenternas perspektiv. Slutligen, i besvarandet av FF4, befanns att en BLL kan påverka de identifierade utmaningarna positivt. I grund och botten syftar en BLL till att hantera bygglogistik och om BLL:en utvecklas och implementeras utifrån detta synsätt kan transporter till och från byggarbetsplats samt logistikhantering på plats bli effektivare. Vidare visar avhandlingen att BLL:er kan hjälpa till att hantera de interorganisatoriska relationerna inom byggprojekten. Detta bygger dock på att man har väl utvecklade och kommunicerade serviceerbjudanden med tillhörande regelverk för hur service skall användas. Dessa bör kommuniceras genom affärs- och styrningsmodeller. Det konstaterades också att ramverkets aktiviteter är inbördes relaterade och beroende av varandra, vilket tyder på att utvecklandet av bygglogistiklösningar är en iterativ process. Det föreslagna ramverket bör därför ses som riktlinjer för hur man utvecklar BLL, vilket möjliggör för anpassningar av lösningen till det sammanhang för vilken den utvecklas.

Mounting emphasis on construction supply chain management (CSCM) is due to both global sourcing of materials and a shortage of labor. These factors force increasing amounts of value-added work to be conducted off-site deep in the supply chain. Construction Supply Chain Management Handbook compiles in one comprehensive source an overview of the diverse research and examples of construction supply chain practice around the world. Reflecting the emergence of CSCM as an important area of multi-national research and practice, this volume takes an interdisciplinary perspective with contributions from leading international authors in three major areas: production and operations analysis, organizational perspectives, and information technology. The book begins with a survey of the current literature on modeling construction supply chain production and describes a set of approaches and methods for designing and operating project supply chains with references to design and materials production. It provides the basic framework for understanding the challenges and approaches to representing and improving supply chain performance. The next section recognizes the importance of considering arrangements between the different firms involved in designing, procuring, and assembling construction, and reviews various perspectives to understanding and improving organizational issues in the supply chain. The final section provides an overview of a range of information technologies that can contribute to supply chain performance, as well as examples of effective use. The organization and sourcing of materials is increasingly complex across the global construction industry. Construction clients are demanding faster, more responsive construction processes and higher quality facilities. This volume provides an invaluable resource to understanding the implications of supply chain management, which is sure to result in more effective construction project execution.

More and more people are living in, or moving to, urban areas than ever before. This attraction to urban areas means that new houses and work places are needed. Building new houses or renovating older housing stock is a natural way for a city to evolve. However, the end products of construction projects are produced at their place of consumption. This means that a multitude of materials and resources need to be delivered to, and removed from, each construction site. This leads to new transport flows being created in urban areas. In urban areas, these transports are subjected to space limitations, environmental demands, accessibility demands and noise restrictions. This has led to a situation where material deliveries to construction sites needs to be coordinated and managed in ways that reduce their impact on the urban transport system and at the same time ensuring efficient construction projects. In essence, construction in urban areas faces two problems; the urban transport problem and the problem of coordinating multiple construction stakeholders. One way to address these problems is through the use of construction logistics solutions such as terminals (e.g. construction logistics centres) and checkpoints. The aim of both types of solutions is to control and coordinate construction transports. In the construction industry, these solutions are however, still a rather new phenomenon. This means that how these solutions are perceived by different stakeholders, and the effect the solutions have on material flows and costs, needs to be explored further. The purpose of this thesis is to explore how construction logistics solutions can be used as a means to coordinate material flows to ensure efficient construction and reduce disturbances on the urban transport system. To achieve this purpose, the following research questions have been addressed: RQ1: How are different stakeholders in the construction industry affected by construction logistics solutions? RQ2: How will the use of construction logistics solutions affect material flows and costs in urban construction projects? To answer the research questions two main methodologies have been used; case study research for the empirical studies and literature reviews for the analysis of the case studies as well as for understanding how supply chain management, logistics, and third-party logistics affects the inter-organizational relationships of the construction industry. The main findings of the research are firstly that construction logistics solutions do have a role to play in the coordination of different construction stakeholders. Adding this new node will force construction stakeholders to address coordination issues in order to ensure that material deliveries arrive to construction sites on time. This also implies that new inter-organizational relationships will evolve, where communication is key. However, this may not be an easy task as it will call for an attitude adjustment towards a more open and collaborative environment. Secondly, adding a construction logistics solution can reduce some unnecessary friction between construction stakeholders and third parties. Coordinated material flows can lead to a reduction in the amount of material delivery vehicles that travels to site, thus alleviating some of the congestion in the urban transport system. This will not reduce all friction between construction projects and third parties, but it is a step in the right direction. Thirdly, a construction logistics solution must come with a set of regulations and a governance strategy from the initiator of the solution. This governance strategy must be clearly stated and communicated to the affected stakeholders. To alleviate animosity towards the solution, flexibility and stakeholder involvement is key. If the directly affected stakeholders are consulted on the function, chances are that they will be more accepting of the solution.

Providing invaluable support for construction in determining the acceptable practice and standard for regulatory bodies and managers, Construction Supply Chain Management in the Fourth Industrial Revolution Era also appeals to researchers as it expands the frontiers of knowledge in the fourth industrial era.