SUPPLY CHAIN MANAGEMENT in CONSTRUCTION: a triumph of …

SUPPLY CHAIN MANAGEMENT

in CONSTRUCTION:

a triumph of spin over substance?

Dr. Stuart Tennant

Monday 6th. August 2012 CIOB West of Scotland

Glasgow Caledonian University

Introduction

Supply Chain Management in Construction:




Overview of the Research Three years: 2009 -2012, EPSRC Funded

What are Construction Supply Chains?

What is learning? and how do chains learn?

What Practices Provide Advantage?

Supply Chain Management: The Theory

Origins?

Multiple Definitions (suppliers’ supplier to customers’ customer)

Functional School of Thought (logistics, procurement, prod)

Philosophical School of Thought (‘way of working’)

Council for Supply Chain Management Professionals

Enhanced Performance



1. Organizational Theory (Governance)

2. Economics (Supply & Demand)

3. Sociology (Confrontational / Trust)

4. Management (Culture / Routines / History)

5. Other Sectors….

Influence from other Disciplines



Supply Chain Management Is Not

Simply Lean Construction

Simply Business Process Re-Engineering

Simply Strategic Alliances

Simply Collaboration or

Alternatively Partnering….



Organizational Governance in SCM Governance

Market

Buy

Network Clan Hierarchy

Make

Economic Price Orientated

Commercially Orientated

Socially Orientated

Authority Orientated

Social Asocial (Low-Trust)

Functional (Low-trust)

Embedded (High-Trust)

Over-Embedded (High-Trust)

Culture Arms-Length (Opportunistic)

Co-operative (Operational)

Community (Solidarity)

Bureaucratic (Administrative)

(Neither Market nor Hierarchy)



MAKE BUY

Traditional Partnering Frameworks

Timescale

Workload

Relations

Structure

Technology

Competition

S.C. Learning

S.C. Market

Management

MARKET NETWORK CLAN HIERARCHY

Procurement

Permanent

Continuous

Shared

Bureaucratic

Industrialised

Low

High

Buoyant

Strategic

Long-Term

Repetitive

Collaborative

Community

Manufacture

Restricted

High

Optimistic

Business

Medium-Term

Repeat

Cooperative

Cordial

Prefabricated

Selected

Moderate

Positive

Operational

Short-Term

One-Off

Adversarial

Arm’s Length

Craft

High

Low

Recession

Opportunistic

Governance

In-House

Bridging Theory with Construction (Model)



Bridging Theory with Construction Practice

1. Operational Interface

Supply Chain Construction Site




2. Operational Capacity Upstream





3. Transferring Onsite Activity, Offsite





4. Integrated and Extended SCM

Construction Site Supply Chain




5. Role of the Construction Client

Supply Chain Construction Site Client



Supply Chain Construction Site Client

Client-Led Supply Chain Contractor-Led Supply Chain

Supply Chain Management in Construction


Market / Network / Clan / Hierarchy





Supply Chain Management: Best Practice

Supply Chain Management: Client-Led

The Language:

Principal Supply Chain Partner / Member



The Construction Client:

Client-Led SCM (The Project) Supply Chain

The Ground Rules:

Collaboration / Learning / Sharing / Exclusivity

Client-Led SCM

Client A

Consultant

Contractor

Client A

Member

Member

Member

Member

Contractor

Member

Exclusivity

Contractor Contractor

Exclusivity

Exclusivity

Member

Restricted Restricted Unrestricted

Limited

Org. SCM

Growing levels of Tri-Lateral Dependency, e.g. BIM

The Main Construction Contractor

Contractor-Led (The Organizational) Supply Chain

Supply Chain Management: Contractor-Led



Developing Certification Programmes

Pre-Qualification Questionnaires (PQQ)

Category Management

Tier Suppliers According to Capability / Track Record

Contractor-Led SCM

Contractor A

Supplier

Sub-Con.

Contractor B

Contractor C

Contractor D

Category 2

Category 3

Approved

Pre-Approved

Partner

Probationary

Provisional

Commodities Suppliers

Sub Sub-Con

Commodities

mutual unlimited

Category 1 Preferred restricted

Growing levels of Integration and Mutual Dependency

Organizational Learning in Supply Chains

Theory & Practice

The Main Construction Contractor

Contractor-Led (The Organizational) Supply Chain


The Construction Client

Client-Led SCM (The Project) Supply Chain



Learn Led by Management

Evolution of Learning

Process

Learning Environment

Managerial Developmental

Learn by Discovery

Refine practice via repetition /

continuous production:

The Learning Curve

Economic

Action

Example

School

Training / interventions sponsored by

the organization

Structured educational programme:

learning syllabus

Organizational mechanisms

for information acquisition,

dissemination and utilization

Lessons Learned

Safety / Legal / Contracts

S.C. Development

ICT / BIM / 360o’s

Regular / Reactive

Routine/ Reactive

Rare Emergent / Pro-active ?



Organizational Learning in Supply Chains

SC Forums

Workshops

Learning

NEC3

Euro-Codes

H & S

ICT

BIM

KPI’s

CLAN

Integrated

NETWORK

Defined

MARKET

Progress

2012

Future?

Architecture

Language SCM


Language SCM

SFT ‘Open Architecture’

Summary: Enduring Barriers

Enduring Impediments - Three

Partnering ‘Baggage’ & Previous Initiatives

Enduring Impediments - Two

Repeated Assimilation with Manufacturing (Binary in Nature)

Enduring Impediments - One

No Continuous Work Stream / Fragmentation / Culture



Summary: Continuous Improvements

Supply Chain Management ‘Creep’ - Three

Contractor-Led SCM: PQQ’s / Category Management

Supply Chain Management ‘Creep’ – Two

Governance / Client-Led Clans: Framework Agreements

Supply Chain Management ‘Creep’ – One

Language / Uniform & Sophisticated



Question:

The Long Answer:

Is far more complex and positive (The UK Construction Industry is exceptional at ‘Purchasing’ Management)

The Short Answer:

Very Often (in the context of suppliers’ supplier to customers’ customer)

So, is supply chain management in a construction

context a triumph of spin over substance?



Other Research Outputs:

Org. Learning in Construction SC

The Emergence of Construction Clans

The Commercial Currency of FA



Transferring on-site activity, off-site

[email protected]

Closing Thought:

Is the term ‘Supply Chain Management in

Construction’ misleading?



Thank You

SUPPLY CHAIN MANAGEMENT

in CONSTRUCTION:


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SUPPLY CHAIN MANAGEMENT in CONSTRUCTION: a triumph of …