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W65 - Workshop Supply chain integration & collaboration
Chair: Will Hughes
COUNTERFEIT CONSTRUCTION PRODUCTS FROM LOW-COST SOURCING COUNTRIES
Edward Minchin Jr., Russell Walters, Jiayi Pan, Dongping Fang
Abstract: The U.S. Federal Bureau of Investigation estimates that two percent of all US airliner fasteners are counterfeit and that at least half of those are dangerously deficient. Sadly, a failed fastener was recently blamed in the crash of a state-of-the-art B-2 stealth bomber. Economically, the counterfeiting “industry” does twice the business worldwide as the illegal drug trade. But what does the practice of counterfeiting mean for the construction industry? The answer is injury, death, and economic loss. Recent events include a worker killed while welding when a counterfeit “Motorola” battery exploded. Workers have been injured when counterfeit pipes and valves have failed when placed under pressure. Concrete has failed on China’s newest high-speed railway before the $12 billion project is even completed. The culprit? Fake fly-ash that looks exactly like the real thing and can only be detected through laboratory testing. The media has been filled with news stories in recent years about the problem with counterfeiting, copyright infringement, intellectual property violations, the grey market (the trade of something legal through unofficial, unauthorized, unintended distribution channels), the practice of passing fake raw materials off as the real thing (see fly-ash above), and the deliberate manufacture of inferior products and bribing officials to accept them, or selling the products to a local subcontractor who installs them and covers them up before the owner or prime contractor discovers them. This last scenario happened to one of the world’s largest international construction owners. Though China is usually the country identified as the source of these problems, research by the research team has indicated that China is not the only source country of these problem products. While over 85% of the problem is estimated to originate in China and Hong Kong, nations traditionally allied with the US are also identified as source nations. In fact approximately five percent of the problem products reportedly originate in US ally nations Taiwan, Pakistan, and the UK. These figures are based on items seized by U.S. Customs and Border Protection agents and are for all products. An international team of investigators spent two years conducting an investigative study that entailed 192 face-to-face interviews conducted in seven countries. Those interviewed were executives, procurement officers, and quality managers for some of the world’s largest construction owners, contractors, insurance companies, manufacturers, and suppliers. Also interviewed were government and pseudo-government officials. Preventative actions for buyers that should be taken from this research are supply chain management and training. For instance, if China is going to sell to the west, they need to understand how westerners feel about counterfeiting. Conversely, if the west is going to buy from China, westerners need to understand the risk and send corporate representatives to China to oversee production. This can mean third-party verification, resident inspection, extensive use of product material identification (PMI), or many other methods of inspection. As for training, the buyer must train the people that they retain to manufacture for them in low-cost sourcing country to manufacture things to western standards. They must train their own people, both in their Procurement Division and their last line of defense, their field personnel. Finally, the construction industry must train law enforcement personnel, especially customs and border patrol personnel in what to look for. U.S. Customs officials interviewed as part of the research said that “construction items are not on our radar. We don’t know what to look for. Please train us.” The results of this research are shared in this paper.
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THE ROLE OF RESPONSIBLE SOURCING IN CREATING A SUSTAINABLE CONSTRUCTION SUPPLY-CHAIN
Jacqueline Glass, Nebil Achour, Tony Parry, Ian Nicholson
Abstract: Keywords: Construction materials and products; Procurement; Projects; R&D; Sustainability.
ABSTRACT
Responsible sourcing (RS) provides a means to manage and ensure the attainment of sustainability objectives by procuring materials with a certified provenance. It is demonstrated typically through an organisation’s procurement policy, via its purchasing decisions and practices, and addresses a range of environmental, economic and social considerations. Use of RS provides a pragmatic link between the ‘triple bottom line’ aspects of sustainability and greater accountability and traceability in the supply-chain. Many people will already be aware of similar schemes and supplier auditing in other sectors (e.g. FairTrade and Rainforest Alliance), but there is no such prominent position for responsible sourcing in the construction industry, with the exception of FSC/PEFC schemes for timber.
Recent developments suggest this situation will change imminently. In the UK, the government requires that 25% of construction products shall be from schemes recognised for responsible sourcing by 2012 and major contractors are considering raising this target even further for major commodities like aggregates, metals, steel, concrete, bricks and glass. Construction stakeholders have also raised serious questions about the environmental and ethical credentials of sourcing of materials from some countries. For these reasons, the construction industry is becoming increasingly aware of the role that responsible sourcing can play in creating, measuring and demonstrating a sustainable supply-chain; in addition;
• Certification and assessment standards now exist (e.g. BES6001)
• Credits can be gained in assessment schemes such as BREEAM, Code for Sustainable Homes and CEEQUAL
• A reasonable range of certified products is now available including aggregates, cement, concrete, reinforcement and bricks.
• There is a modest, but increasing market pull from clients and investors.
However, the construction industry lacks general awareness and expertise in RS; few people have the experience of developing such supply-chains and more materials suppliers need to offer certified products. New research is bringing together industry and academics to disseminate knowledge on RS, exchange good practice, create training materials and develop a research agenda. Early results from an industry survey and 12 company case studies show that major materials industries are instrumental to provision of RS goods; clients and major contractors will drive change in the supply-chain; robust supplier auditing can be used to engage sub-contractors; scope for enhanced reputation and market differentiation are encouraging many parties to seek certification; but questions remain over the cost of implementation, involvement of SME businesses and market demand.
This research has important implications; responsible sourcing has the potential to transform the construction supply-chain into a transparent and sustainable enterprise, but market forces rather than the notion of ‘doing the right thing’ are likely to determine its widespread adoption. Our research will map the way forward for RS in the construction sector by considering its context, markets and technologies and identifying critical research directions.
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SUPPLY CHAIN PARTNERSHIP WITHIN HOUSING RENOVATION – APPROACHES FROM THE DUTCH HOUSING ASSOCIATION SECTOR
Vincent Gruis, Martin Roders, Ad Straub
Abstract: Supply chain partnership within housing refurbishment has to date not been given much specific attention which may be found surprising because refurbishment is outgrowing new developments on the housing market and has specific characteristics that require adapted approaches to supply chain management. In this paper we explore the specific features of supply chain partnership within housing renovation, looking in particular at some innovative approaches in the Dutch housing association sector. From general literature on building process innovation, we derive a taxonomy of supply chain integration. By comparing the specific features of renovation with new development we critically assess the advantages and disadvantages of the distinguished forms. The theoretical assessment is tested against some innovative approaches in the refurbishment practice of Dutch housing associations.
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LOCALISING THE SUPPLY CHAIN
Stephen Pryke, Ioanna Kougia
Abstract: The UK committed in 2008 to reduce its greenhouse gas emission by 80% by 2050. The construction industry is a key contributor to the greenhouse emissions and future legislative adjustments for the built environment are well underway. The industry will face many challenges and it is expected that its profile will be very different by 2050. The scenario that there will be pressure for the supply of labour, materials and components to be much more localised due to increased energy costs is very likely. In turn, supply chains, which currently are becoming increasingly long as the demands of projects become increasingly complex, will inevitably have to face the localisation challenge.
The long supply chains provide the increasingly high levels of technical input relating to design, manufacture, installation and servicing in the context of an industry anxious to maintain flexibility in the face of uncertain levels of workload and investment. These tall contractual hierarchies contain a massive amount of expertise but the contractual hierarchy constrains the effective management of knowledge and innovation through excessively long network paths, containing multiple, perversely incentivised, network bridges and gate keepers. Contractual relationships, knowledge management and information exchange networks define the localised supply chains and important work need to be done to examine the potential for these networks to establish and be maintained. Social network analysis can be employed to map existing supply chains and to provide predictive models for local supply chains in 2050.
The paper discusses how to best examine what the capabilities of the local supply chains today are and what their capabilities would be if they were specifically enhanced to meet 2050 challenges. These capabilities inform the supply chain management’s targets which mainly focus on continuous improvements of the supply chain increasing value and stimulating knowledge sharing and innovation. Sustainability targets are yet to be fully incorporated in the value equation, which is what the 2050 challenge requires; therefore particular attention is paid to it. It is suggested that exploring the location of intellectual capital in the construction supply chains, demonstrating how the use of BIMs and vertical integration of the supply chain might be exploited to provide interfaces between local supply chain actors and end-users, examining the logistics and embedded energy, comparing the today’s logistical demands with a 2050 localised supply chain scenario, is a starting point in developing the concept of the localised supply chain as a successful approach the sustainability problem.
The aim of the paper is to make a valuable contribution to the emerging research on sustainable/ green supply chains approaching it from a localisation perspective. Its presentation in the MISBE 2011 Conference provides an excellent opportunity for direct discussion and feedback to this approach for further research.
Keywords:
Sustainability, Localisation, Supply Chain, Knowledge Management, Information Exchange Networks
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THE MANAGEMENT OF REQUIREMENTS: WHAT CAUSES UNCERTAINTY IN INTEGRATED DESIGN APPROACHES?
Vedran Zerjav, Timo Hartmann, Hans Boes
Abstract: Although a substantial amount of literature advocates the integrated collaborative design processes for construction projects, very little explicit knowledge exists about the impact of the integrated processes on project uncertainty. In contrast with construction site processes, which can in most cases be organized as a sequence of tasks mutually interlinked by technological interconnections, design is a highly interdependent and iterative process that needs different management approaches. To manage the complex interdependencies of design, managers need to make sense of how far-reaching the impact of addressing a particular requirement will be on project outcomes.
By using the theoretical dichotomy of wicked and tame problems, this paper conducts a study on a design and engineering mega-project to induce the shortcomings of traditional project management applied to complex design problems. This study develops a cognitive map of how a requirement propagates through the entire scope of an ill-structured design problem and contends that the traditional design management techniques do not capture the ill-structure of the design sufficiently. The paper finally develops a list of theoretical propositions and an accompanying set of practical recommendations that are based on the notion that design should be managed on the basis of distinguishing between wicked and tame parts of the problem. The study contributes to design management literature with an early normative framework for managing complex construction design.
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BUILDING INFORMATION MODELLING AND THE CULTURE OF CONSTRUCTION PROJECT TEAMS: A CASE STUDY
Graham Brewer, Thayaparan Gajendran
Abstract: It has often been asserted that the collaborative use of Information and Communication Technology (ICT) in general and Building Information Modelling (BIM) in particular across the temporary project organisation (TPO) represents the future of construction project delivery. Anticipated benefits include greater design coordination, reduced conflict, efficiency savings, and a valuable information stream for use throughout the operational life of a building. However the success of BIM in a TPO is dependent upon the presence of participant firms that share compatible technologies, business processes, and cultures, led by people who hold attitudes and display behaviours conducive to collaboration. Research suggests that these conditions are unlikely to exist throughout a TPO, or even within the entirety of its first tier stakeholders, and that this arises as a consequence of their individual attitudes towards ICT-mediated collaboration, and their subsequent decision-making in this regard. Their collective interaction thereafter defines the culture of the TPO, more often than not resulting in differentiation, or fragmentation: true integration is the exception. This paper presents a case study of a TPO, identifying differentiated cultures within the project, and their causes. It suggests that careful selection of trading partners and thereafter focused attention to the establishment of a TPO may mitigate many of these negative outcomes.
Keywords: ICT, BIM, TPO, culture
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SUPPLY CHAIN INTEGRATION CHALLENGES IN PROJECT PROCUREMENT IN MALAYSIA: IBS CONTRACTORS’ PERSPECTIVE
Ani Saifuza Abd Shukor, Mohammad Fadhil Mohammad, Rohana Mahbub
Abstract: The Malaysian Construction Industry Master Plan (CIMP 2006-2015) identified the innovative approaches of Industrialised Building Systems (IBS) and its supply chains as having important roles in improving the productivity and quality of construction processes. However, the fragmented scenario in the construction industry leaves the IBS supply chain players with noticeable difficulties in terms of competitiveness and efficiency. Supply chains in IBS involve relationships between many organisations and processes, with the evolution of many specialised roles and embedded relationships. The procurement method is utilised as a mediator tool and as the means of controlling integration between players. Although efforts have been undertaken to enhance the IBS practice in Malaysia, various integration challenges have risen from amongst the IBS players. There is an urgent need to improve the integration of supply chains and a good approach of supply chains integration should be fully established. The purpose of the research is to identify the challenges of IBS supply chain integration with regard to existing project procurements. The methodologies involved a thorough review of literature and the qualitative method of using semi-structured interviews which were conducted amongst IBS contractors in Malaysia. The findings reveal role and responsibility, understanding the knowledge, risk liability, financial and contract matters and attitude and relationship are the challenge factors that hinder the successful integration between the contractor and other related parties. Such issues require much attention in pursuance of greater integration within the supply chains in the Malaysian construction project. The findings of the research will provide valuable theoretical support for integration in order to strengthen the value of supply chains in the Malaysian construction industry.
Keywords: Industrialised Building System, Integration, Procurement, Supply Chain
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INNOVATION IN COLLABORATION FOR BELGIAN BUILDING PROCESSES
Nele Boussemaere
Abstract: Keywords: innovation, collaboration, partnering, comparative, Belgium
Today in many of our neighbouring countries ‘working together in integrated project teams’, using groupware and BIM, is the future way of process thinking in the building practice. Everyone is convinced that ‘teams outperform individuals’! Especially when diverse skills, judgement and experiences can enhance the project’s outcome.
This paper contains the first phase of a comparative study of IPD processes, ways of enhanced collaboration and communication between the different stakeholders in the supply chain of projects abroad, to solve the problems occurring in traditional construction processes used in Belgium. Before the search for solutions can start several questions need an answer first. ‘Which types of building processes are being applied in Belgium today? From which problems do stakeholders in construction suffer? Do all stakeholders understand the problems? Why do Belgians keep following these traditional processes? Are they already aware of the progress in innovative processes made in our neighbouring countries? Is there economical, professional, legal or political support for them?’
This paper is written as a part of a PhD research, which starts with an exploratory study to be able to clearly define the problems occurring in the traditional Belgian building processes.
Future challenges comprise an analytical study of integrated project delivery methods used together with adjusted contracts to enhance the building processes in the Netherlands and the UK. There building teams, integrated contracts like design & build and turn-key, public private partnerships, alliances, SPE’s, … are intensively used. The restriction of the monopoly status of the architect in Belgium together with preserving at all times his incompatible relation with the contractor will be considered first. The following questions will guide the PhD research in the future: ‘Which future perspectives can Belgium have? What kind of integrated methods are successful in our neighbouring countries? Are there any possibilities to implement them within the Belgian legislation or is a profound revision inevitable? Will an evolution be enough or is a real revolution to be expected? …’
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COLLABORATIVE NETWORKS SUPPORT SUSTAINABLE BUSINESS SETTINGS REGARDING INTEGRATION OF DESIGN AND CONSTRUCTION
Jan Worst
Abstract: Keywords: collaborative networks, assessment, integration, CPFR-model, total-cost-of-ownership.
Introduction: Collaborative networks (CN’s) represent systems of legally independent partners in industries and services that cooperate on shared economic sense, coordinate and communicate in changed business paradigms using systems supported by Internet technology and web-based services. Actually, collaborative networks represent promising business paradigms to cope with the current turbulence on markets. Considering design and construction of private and public property collaborative networks encompass opportunities like enlargement of capacity, cost effectiveness and avoidance of doubles. Participation in CN’s provide firms not only enlargement of their business capacity, but also an opportunity to start a new economic life cycle. Traditional business settings of the construction process represent organization of craftsmen. Current business settings are based on industrial approach of the construction process.
The adoption of Internet and web-based solutions offer a challenge to change and indicate speed in work flow management and exchange of information, which are topics in managing the construction process. Internet and information technology appear to be enablers of CN’s. For instance participants in the construction process such as: architects, engineers, contractors, suppliers and subcontractors aligned to collaboration have to accept new roles, when they enter systems of CN’s.
Problem: Considering collaborative networks and the traditional business settings of the construction industry the following questions are of importance to find a solution:
1. Are collaborative networks adopted by governments, industries, supportive industries, public services and private services? Are they legally supported by current national and international law?
2. How does the construction market and adjacent markets cope with collaborative networks to regulate competition and transparency?
3. How do we organize collaborative assessment of partners in collaborative networks?
This research paper has two objectives:
1. To identify ontology of collaborative networks focused on integration of design and construction.
2. To initiate an assessment model to test sufficiency of participants to enter collaborative construction industries’ networks focused on integration of design and construction.
Conclusion: Collaborative networks (CN’s) indicate transfer of total spatial solutions. The best back-up of contracts encompassing offers meeting the business standard “cost of ownership” are provided by collaborative networks. These networks show synergy between “economies of scope” and “economies of scale”. Collaboration means enlargement of capacity regarding design, engineering, construction and maintenance. Firm assessment of partners will contribute to sustainable collaborative networks that cover requirements set by the public and private domain. Considering supply chain management, collaborative networks are able to implement the CPFR - model in the construction industry. The CPFR – model encloses collaboration, planning, forecasting, and replenishment. Strategy and planning of the CN’s containing design, engineering and construction are clearly focused on the investor and user. Supply chain management (SCM) is strictly focused on forecasting “time to market” and “time to volume” setting strict guidelines to all partners involved in the construction process. Logistics and the building process are submitted to fulfillment of the contract. Strict assessment of effectiveness and efficiency of partnership is measured. Necessary to arrive at CN’s realizing contracts with the guarantee of “total cost of ownership” in accordance with the investors’ specifications.
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EXTENDED CONSTRUCTION SUPPLY CHAIN MANAGEMENT: RELATIONSHIPS, REWARDS AND RISKS
Stuart Tennant, Scott Fernie
Abstract: 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.
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A CRITIQUE OF INTEGRATED WORKING AND PARTNERING
Stephen Gruneberg, Ian Murdoch
Abstract: Many authorities have supported the concept of integrated working or partnering. They claim a number of advantages of partnering such as greater co-operation, cost savings, timely completion of projects and improved quality but there remain a number of difficulties both at a theoretical and practical level. These difficulties manifest themselves in the views expressed by some specialist contractors, whose voice is all too often overlooked.
A number of issues can be seen in the responses of specialist contractors to questions put to them in the quarterly survey of the National Specialist Contractors Council. These include measures of interim payment periods, tender prices, suppliers’ prices, profit margins, contractual behaviour, methods of appointing specialist contractors and the time allowed to price a proposal. These measures can be compared to the state of the specialist contractors’ markets to reveal the underlying causes of main contractor behaviour and treatment of their subcontractors. For example, market constraints in times of economic difficulties may indeed directly affect such behaviour. If the gains and benefits of partnering were truly shared between all parties, then it is significant to note the views of specialist contractors and the fact that the difficulties they face in dealing with main contractors have not diminished over time.
Many of the perceived gains have been measured and reported as key performance indicators (KPIs) and these results are compared to the results of the survey of specialist contractors which has been tracked over a number of years.
It is shown that the divergence in opinions about the performance of contractors calls into question the gains to the supply chain in the construction sector claimed by the proponents of integrated working. Further, the practice of partnering has not extended its reach throughout the sector that might have been expected.
The conclusion drawn is that the drive to partnering has been a marketing exercise by contractors and not matched by practice. Instead it has allowed the strongest players in the building team to continue to take advantage of the weakest members and that the time has come to call the concept of partnering as practiced in the UK a failure.
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THE INTEGRATED HOUSING SUPPLY CHAIN MODEL FOR INNOVATION: NARRATIVE ANALYSIS TOWARDS DEVELOPING PATHWAYS METHODOLOGY
Kerry London, Jessica Siva
Abstract: There are significant problems in the supply of housing in Australia yet very little attention has been paid to the housing construction supply chain. To date the housing supply debate has been largely focussed on housing demand, affordability and land supply. It is contended that one of the key causal factors of poor housing supply is the poor coordination between supply chain actors. The development of integrated supply delivery solutions have not been extensively recognised in the Australian residential sector. Ad hoc examples and applications by some major building companies has seen some limited success, however, this has not been diffused throughout the sector with little real impact on overall sector performance and individual company competitiveness. Whole-scale industry improvement requires a concerted effort to undertake a stepwise change. A key to the solution is to investigate successful examples of integrated supply chains which have resulted in productivity and/or innovation performance improvements. The aim of this research is to undertake a case study analysis of successful implementation of delivering an innovation to the Australian housing construction industry which required an integrated construction supply chain model. The paper describes the theoretical background to the study and the preliminary results of the case study.
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CHAIN COLLABORATION BETWEEN A HOUSING CORPORATION AND TWO GENERAL CONTRACTORS, THE FIRST STEPS
Jelle Koolwijk
Abstract: Several housing corporations in the Netherlands have realized they cannot do it alone if they want to renovate their housing stock faster, cheaper and with a higher quality. More and more of these corporations are forming strategic alliances with contractors and other partners to reach these goals. They are applying principles of supply chain integration and lean on the total process of the building lifecycle, under the umbrella concept of Chain Collaboration (Ketensamenwerking in Dutch).
This article draws from active research executed on two projects which started in 2010 and are still under development. It focuses on the definition and design phase and describes the approach applied to implement the chosen strategies.
Keywords: supply chain integration, lean, strategic alliance, housing corporation
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SUPPLY CHAIN INTEGRATION AND COLLABORATION - A RELATIONSHIP MANAGEMENT APPROACH
Steve Rowlinson, Fiona Yan Ki Cheung
Abstract: In this research we examined, by means of case studies, the mechanisms by which relationships can be managed and by which communication and cooperation can be enhanced in sustainable supply chains. The research was predicated on the contention that the development of a sustainable supply chain depends, in part, on the transfer of knowledge and capabilities from the larger players in the supply chain.
Relationship management is a system that provides a collaborative environment and a framework for all participants to adapt their behaviour to project (and longer term) objectives. It is about open communication, sharing resources and experiences, exposing the ‘hidden’ risks in the project. The case studies suggest that leadership has a strong influence on the relationship management climate which needs to be facilitated and nurtured. Commitment and action by senior management (and, so, parent organisations) can have a strong impact on the team and relationship management culture, indicating relationship management has a high chance of failure when there is inadequate support from top management. Like all relational contracting approaches, trust between relationship management partners is important. The authors conclude that without a positive approach to relationship management a sustainable industry and continuous improvement are not possible. So, the authors postulate that a ‘sustainable supply chain’ is essentially tautological without the existence of a clear relational vision that leads to both soft and hard infrastructure to assist and inform decision making and encourage relationship building.
The research adopted a triangulated approach in which quantitative data were collected by questionnaire, interviews were conducted to explore and enrich the quantitative data and case studies were undertaken in order to illustrate and validate the findings. Handy’s view of organisational culture, Allen & Meyer’s concepts of organisational commitment and Van de Ven & Ferry’s measures of organisational structuring have been combined into a model to test and explain how collaborative mechanisms can affect supply chain sustainability
It has been shown from the research that the degree of match and mismatch between organisational culture and structure has an impact on staff’s commitment level. A sustainable supply chain depends on convergence – that is the match between organisational structuring, organisation culture and organisation commitment.
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