The impact of supply chain management practice on construction project performance

Abstract

Construction supply chains encompass the flows of information, materials, labour, plant, equipment and temporary work, which originate from the different parties, viz., main contractors, suppliers, subcontractors and clients/architects. Any problems with these flows will eventually disrupt the project performance. The primary aim of this research was to gain a comprehensive understanding of the impact of supply chain management practice on construction project performance. The research methods adopted comprised: preliminary investigations, a main survey and the development of simulation models. The preliminary investigations were carried out by interviewing members of the construction industry and visiting two medium-sized building projects over a period of 6 months. The main survey was intended to collect data required for developing the simulation models. They were developed using Pertmaster Risk ExpertM software, which allows supply chain delays to be applied on a CPM network of a typical medium-sized building project of 300 days duration. The results of the simulation showed that when all work was carried out by the main contractor and all supply chain delays were applied, the project's median delay was 67 days (equivalent to 22% of the project duration). It was learnt that problems in material flow caused the biggest impact on the project, followed by labour flow, information flow, and `plant, equipment and temporary work' flow. Among the problems in material flow, the biggest impact was due to difficulties in finding materials. When subcontractors were used for the activities that are normally subcontracted, there was a significant reduction of the median delays from 67 to 37 days (equivalent to a 45% reduction). These findings are an important measure of how much supply chain delays may impact on project performance and suggest that problems related to the supply chain in construction are likely to generate significant disruption.