ROLE OF SUPPLY CHAIN IN CONSTRUCTION INDUSTRY

Abstract

“Supply chain management (SCM) is a concept originating from the supply system by which Toyota was seen to coordinate its supplies, and manage its suppliers. In terms of lean production, SCM is closely related to lean supply. The basic concept of SCM includes tools like Just-In-Time delivery (JIT) and logistics management. The current concept of SCM is somewhat broader but still largely dominated by logistics.” “Until now, in construction, initiatives belonging to the domain of SCM have been rather partial covering a subset of issues (e.g., transportation costs) in a limited part of the construction supply chain (e.g., the construction site). In most cases, the issues are regarded from a main contractor’s point of view” “Statistical figures show that main contractors are purchasing more labor and material than previously. For instance, in 1994, in Dutch construction industry (i.e. residential, commercial and industrial building), the main contractors’ share in the total national turnover had decreased to 24% (Scholman 1997). Thus, suppliers and subcontractors represented about 75% of turnover. Currently, this is expected to be more.” “As a consequence, main contractors become more and more reliant on other actors in the construction supply chain (e.g., suppliers and subcontractors). Therefore, they need to revise their supply strategies and trading relations with subcontractors and suppliers.” “Thus, the goal of this paper is to clarify the ROLE and possibilities of SCM in construction. Starting from the lessons learnt and methodological development of SCM in manufacturing, present supply chains in construction are observed, and recommendations for SCM in construction are presented.” “The focus of this paper is on the supply chain of a main contractor. It has to be noted that in construction, real estate owners also may drive supply chain development.