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 (Womack et al. 1990). In terms of lean production, SCM is closely related to lean supply (Lamming 1996). 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 (e.g., Asplund and Danielson 1991, Wegelius Lehtonen et al. 1996).
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 roles 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.
SCM is a concept that has originated and flourished in the manufacturing industry. The first signs of SCM were perceptible in the JIT delivery system as part of the Toyota Production System (Shingo 1988). This system aimed to regulate supplies to the Toyota motor factory just in the right - small - amount, just on the right time. The main goal was to decrease inventory drastically, and to regulate the suppliers’ interaction with the production line more effectively.
After its emergence in the Japanese automotive industry as part of a production system, the conceptual evolution of SCM has resulted in an autonomous status of the concept in industrial management theory, and a distinct subject of scientific research, as discussed in literature on SCM (e.g., Bechtel and Yayaram 1997, Cooper et al. 1997). Along with original SCM approaches, other management concepts (e.g., value chain, extended enterprise).
Number of Pages of Project Report: 68
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Table of Contents of Project Report:
CHAPTER 1: INTRODUCTION
CHAPTER 2: LITERATURE REVIEW
CHAPTER 3: RESEARCH METHODOLOGY
RATIONALE OF THE STUDY
STATEMEMNT OF THE PROBLEM
OBJECTIVES OF THE STUDY
SCOPE OF THE STUDY
TOOLS OF ANALYSIS
CHAPTER 4: DATA ANALYSIS AND INTERPRETATION
SUGGESTIONS AND RECOMMENDATIONS
CONTRIBUTION FROM THE STUDY
LIMITATIONS OF THE STUDY
FUTURE DIRECTIONS FOR FURTHER RESEARCH