EXTENDED CONSTRUCTION SUPPLY CHAIN MANAGEMENT: RELATIONSHIPS, REWARDS AND RISKS

misbe2011 Tracking Number 69

Over the past decade, the UK construction industry has sought to exploit the rewards of supply chain management practice. Advocates of supply chain management are now proposing that enlightened stakeholders within the UK construction sector will seek to commercially benefit from improved supply chain understanding. Suggesting that extended supply chains, rather than discrete companies will compete and tender for future building projects. This paper explores construction industry capability to implement an extended construction supply chain culture. Where commercial solidarity prevails and supply chains, including small and mediums sized enterprises (SME’s) vie for construction projects and economic advantage. To date, much of the innovation in construction supply chain management has focused on two short, bilateral relationships namely; the project centric relationship between the client and first tier main contractor and the organisation centric relationship between the main contractor and the second tier subcontractors and suppliers. Downstream supply chain relations with third and fourth tier suppliers and manufacturers have been limited. Despite recent advancements in construction supply chain management theory and practice many barriers continue to inhibit the realisation of fully integrated 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’ commercial and social 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 SME’s.