Int. J. Mgmt Res. & Bus. Strat.

2014

Ranjan Tiwari et al., 2014

ISSN 2319-345X www.ijmrbs.com
Vol. 3, No. 1, January 2014
2014 IJMRBS. All Rights Reserved

SUPPLY CHAIN MANAGEMENT IN

CONSTRUCTION: A LITERATURE SURVEY
Ranjan Tiwari1*, Henry Shepherd2 and R K Pandey3

*Corresponding Author: Ranjan Tiwari  ranjan_tiwari960@yahoo.com

Construction project involves various disciplines of engineering and a network of entities for the
execution of quality work. The requirement of the client which is the basic objective of any
construction project revolves around the reliability and quality of runway pavements and allied
constructions. If the time constraints are severe and the uncertainties are inherent, the traditional
project management techniques have to be redesigned reconceived to achieve the desired
service parameters and time limits under these circumstances. The Supply Chain Management
techniques are now being increasingly applied in the execution of such construction projects.
The paper outlines the basics of Supply Chain Management and compiles literature review of
supply chain management in construction. It analyzes the existing state of research in application
of SCM in construction and explores the areas in which SCM techniques may be successful.
Keywords: Supply Chain Management (SCM), Construction, Material flow, Information flow,
Fund flow, Project

of the resources, the execution of work without

compromising the quality and reliability requires
an integrated approach of execution.

INTRODUCTION
The execution of large infrastructure construction
projects involve complex issue specific to
geographical, atmospheric, topographical
constraints and end user attributes. The work
execution in modern construction projects is
highly mechanized. The optimum utilization and
output of machineries is essence of the
international quality work. The construction of
such jobs becomes more challenging if it is to be
executed under stringent time constraints in a
country with meager resources. The mobilization

The basic Supply Chain Management (SCM)

techniques have been used extensively in
production industry and these are finding its way
in construction industry as well. The SCM
approach in mechanized construction of large
infrastructure projects an upcoming field having
tremendous scope for further research and
experimentation. SCM techniques have been
successfully implemented across the globe by

Executive Engineer (SG), Border Roads Organisation (Under Ministry Of Road Transport and Highways, Govt. of India), Tezpur, Assam,
India.

Department of Mechanical Engineering, Sam Higginbottom Institute of Agriculture, Technology & Sciences, Allahabad, UP, India.

Department of Civil Engineering Sam Higginbottom Institute of Agriculture, Technology & Science, Allahabad, UP, India.

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Figure 1: Generic Configuration of a Supply Chain in Manufacturing

various construction companies. Some of the

Indian companies have also applied SCM
technique in construction of airport runways in
some central Asian countries.

the control of the total flow of production (Koskela,

1992).
The application of SCM in the construction
industry has been tried with varied degree of
success. The application of SCM concepts to
construction sector require the supply chain
managers to break the traditional SCM shells of
manufacturing industry and make the supply
chain project centric rather than organizationcentric. This is due to the fact that the construction
projects have highly customized requirements
and the supply chain has to adapt and redesign
itself according to the clients priorities. However
the generalized requirement of the client of any
construction project may be broadly summarized
as under.

The supply chain has been defined as the

network of organizations that are involved, through
upstream and downstream linkages, in the
different processes and activities that produce
value in the form of products and services in the
hands of the ultimate customer (Christopher,
1992).
SCM looks across the entire supply chain
(Figure 1), rather than just at the next entity or
level, and aims to increase transparency and
alignment of the supply chains coordination and
configuration, regardless of functional or
corporate boundaries (Cooper, 1993). According
to some authors (Cooper, 1993), the shift from
traditional ways of managing is essentially based
on a conversion (or transformation) view on
production, whereas SCM is based on a flow view
of production. The conversion view suggests that
each stage of production is controlled
independently, whereas the flow view focuses on

Time bound execution of project with the

completion of all works within the defined
scope in the contract agreement.
Quality of the execution as per standards and
specifications defined in the contract
agreement.
Cost of execution to be kept within the project

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forms of contracts that promote system

optimization. It has been found that Construction
supply-chain management offers new
approaches to reduce the cost of and increase
the reliability and speed of facility construction.
Supply-chain management takes a systems view
of the production activities of autonomous
production units (subcontractors and suppliers
in construction) and seeks global optimization of
these activities. The promise of supply-chain
management comes from its system perspective
on production activities. Such a perspective
allows improved understanding of firms
production costs and capabilities (particularly
under the uncertain and changing conditions that
characterize modern construction sites). This
provides a rational basis to improve coordination
and control on construction projects. Production
activities can be better planned and adjusted and,
by linking to costs, contracts can be formed that
promote optimal supply-chain performance.
Similarly, enhanced understanding of production
allows analysis of the impact of facility design on
supply-chain performance. The systems
discipline of supply chain management contrasts
sharply with traditional methods of planning,
controlling and contracting for projects that, taking
a hierarchical, decomposition approach, seek at
best to optimize individual activities. Thus
whereas current construction methods tend to
support the fragmentation that plagues
construction, supply-chain management
promises an engineering basis to design, plan,
and manage construction projects in a
collaborative manner. The need for improved
linking of costs to production performance places
priority on research area one more work must
be done in this area before progress can be made
in research areas three and four. There must be

cost and no cost overruns allowed. The

savings by stringent cost control will accrue
as profit to the company.
The construction supply chain management
aims to fulfill the clients requirement by taking
a systems view of all the construction activities
and the agencies involved in the project.

LITERATURE SURVEY
The SCM concepts have been extensively
researched and applied in the manufacturing
industry. The application of supply chain
management in construction is comparatively
new subject and so far only limited studies and
research have been conducted. Although the
technique has been applied practically with varied
degrees of implementation, the documentation
of the case studies and experiences are found
wanting. The available literature on the applicability
of SCM techniques in construction field have been
discussed here.

SCM As Tool for Effective Construction

Project Management
The earliest documented account of the
construction supply chain has been reported with
relation to Coordination, Costing, and Control in
construction (O Brien, 1995) . It has been
reported by the researchers that the application
of SCM can result in better coordination, costing
and control in a construction industry. A better
understanding of firms production costs and
capabilities in particular their ability to manage
their resources across projects given changes
in schedule and scope affords several
opportunities for improvement. It provides a
background for improved production control within
each subcontractor and supplier. Moreover, the
link between cost and production allows new

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performance worse. The SCM offers general

guidelines that can be used to analyze,
reengineer, properly coordinate, and constantly
improve virtually the complete construction supply
chain, resolving basic problems and the myopic
control that have been plaguing the supply chain.
This would be practically impossible to realize in
the short term. Therefore, initially, the SCM
methodology is properly deployed on a lower
scale, addressing partial supply chain problems,
involving a limited number of supply chain actors.
Due to its recurring character, the SCM
methodology implies a continuous improvement
process of which the scope can be enlarged over
time, involving an increasing number of areas of
application. Some areas of application, which
may be, and to a certain extent have been
subjected to SCM, include the reduction of costs
(especially logistical costs), lead-time and
inventory in the supply chain. In view of the large
share of these costs in construction, this focus
is often fully appropriate. Secondly, the focus may
be on the impact of the supply chain on site
activities. Here, the goal is to reduce site costs
and duration. In this case, the primary
consideration is to ensure material (and labor)
flows to the site for the sake of avoiding
disturbances in the workflow. Thirdly, the focus
may be on transferring activities from the site to
upstream stages of the supply chain. The
rationale may simply be to avoid the inferior
conditions of site, or to achieve wider concurrency
between activities, which is not possible in site
construction with its many technical
dependencies. Here, the goal is again to reduce
the total costs and duration. In practice, these
areas are intimately interrelated. It is often difficult
to improve the dependability of the deliveries of a
supply chain without addressing the total supply

a knowledge of payoffs to design practical

contracts in research area three and the
production knowledge necessary to evaluate
design criteria will come from further research in
area one. However, econometric measures are
necessary to complement cost and performance
modeling. Such measures serve to generalize
more specific models and test the propositions
of those models. More generally, such measures
allow generation of an empirical database that
can demonstrate the gains possible by supplychain techniques. This should help to speed
adoption of these techniques across the
construction industry. According to the
researchers the contribution of supply chain
management to the construction industry is as
under.
Cost and performance modeling
subcontractor and supplier production.

of

Improved scheduling methods, particularly with

regard to the design and placement of buffers
against uncertainty and changes.
Improved subcontractor coordination methods
by linking site production to resource
management.
Improved accounting and production control
systems.
While the application supply chain
management has been documented by the these
researchers based on some case studies there
are others (Vrjhoef and Koskela, 2000) who have
deduced some of the shortcomings of
construction supply chains that are still full of
.wastages and problems caused by myopic
control. Actual practice in construction not only
fails to address issues of supply chain, but rather
follows principles that make supply chain

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temporary compared with permanent

organizations. There is potential for the
development of an industrial organization
methodology applicable to the project based
industry. Ultimately industrial organization
research seeks to have direct implications for
industry performance and government policies.
The researchers have attempted in developing
procurement models as applied to the
construction field with an aim to economize the
inbound material cost.

chain. If activities are transferred from site

upstream the supply chain, it is requisite that the
resultant, more complex supply chain is orderly
managed and improved in order to have the
benefits intended. In view of these roles, gaps in
prior initiatives to advance the supply chain can
be identified. For instance, the logistics initiatives,
stressing (average) costs, have often failed to
address the impact of supply chain variability on
site assembly. In addition, industrialized
construction, with its long and complex supply
chain, has often been lacking even basic
principles of SCM. The generic body of knowledge
accrued in the framework of SCM leads to
improved understanding of the characteristics of
construction supply chain problems, and gives
direction for action. However, the practical roles
for SCM have to be developed in construction
practice itself, taking into account the
characteristics of construction and the specific
situation.

It has been emphasized that SCM has many

of the features associated with a fifth generation
innovation (Saad et al., 2002). It has been
suggested that although construction practitioners
have some knowledge of SCM they need a better
conceptual understanding of it and new and more
systematic approaches to its implementation.
The investigations has also been carried out
regarding the extent to which supply chain
management practices can be shared between
different industrial contexts (Green et al., 2005).
The researchers have brought out that the recipes
for learning from other industries often fail to
recognize the embedded and contextual nature
of management practice. The researchers
emphasize on the contextual awareness as an
essential element in application of supply chain
management in the construction industry. They
have studied the industrial context of UK
construction aerospace industry. The
researchers have provided a fresh perspective
on how SCM is interpreted and enacted in the
construction and aerospace sectors. The
adopted approach differs from previous studies
in the way that context has been conceptualized
as an active part of the analysis. The researchers
brought out on the basis of the interviews and
participative workshops, that there is much to

It has been brought out (London and Kenley,

2001) that although supply chain management
for an individual organization is an emerging field
of research in the construction management
discipline, but less attention has been devoted to
investigating the nature of the construction supply
chains and their industrial organizational
economic environment. The merging of the supply
chain concept with the industrial organization
model as a methodology for understanding firm
conduct and industry structure and performance
is an important contribution to both construction
supply chain and construction economic theory.
Much of the industrial organization supply chain
literature has tended to focus upon manufacturing
industries, where typically firms are permanent
organizations. This raises issues as to the
differences between industries founded upon

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much of the literature, the tendency is to view

culture as an independent variable. The narrative
of culture change is seemingly mobilized by
construction practitioners to persuade others (and
perhaps themselves) that they are striving to
overcome the industrys adversarial culture by the
adoption of enlightened management practices.
In this respect, the narrative in support of SCM is
inseparable from that of lean thinking, partnering,
collaborative working and several other
manifestations of enlightened practice. However,
in the case of the construction sector it seems
that all such narratives are almost entirely
disconnected from any grounded understanding
of sectoral change. Notwithstanding the above,
any meta-narrative concerning the interaction
between discourse, managerial action and
structural change in the construction sector must
be treated with considerable caution. The
fragmented structure of the sector, coupled with
a plethora of niche markets, means that
practitioners views are much more locally
embedded than tends to be the case in
aerospace. However, in construction there is likely
to be much greater variance in the inner contexts
within which practitioners operate, thereby
rendering any generalizations about the ascribed
meanings of SCM much more tentative. It must
further be recognized that practitioners have
considerable scope to shape the context within
which they operate. In recent years many
construction firms have attempted to integrate
themselves into stable supply chains to take
advantage of serial contract arrangements,
including prime contracting.. The emergence of
prime contracting and the increasing use of
framework agreements in the construction sector
potentially provide a more supportive climate for
SCM than has traditionally prevailed. Providing

suggest that practitioners in the two sectors make

sense of SCM in different ways. Aerospace
interviewees consistently link the need for SCM
to the imperatives of global competition.
Furthermore, they frequently allude to the need
for firms to strategically position themselves in
the marketplace in pursuit of competitive
advantage. In the case of the aerospace sector,
it is therefore relatively easy to construct a sense
making narrative that relates SCM to the dynamics
of sectoral change. Indeed, the narrative is readily
identifiable in the views of industry practitioners.
In contrast, the derivation of a single sense
making narrative for the construction sector is
more problematic. SCM is less well-established
in construction with a notable diversity of views.
Progress towards the implementation of any
normative framework of SCM within construction
would appear very limited. Many respondents tend
to describe the frameworks they would like to
introduce rather than systems that are already in
place. Construction practitioners invariably see
SCM as a means of improving operational
performance, rather a fundamental shift in the
way that they do business. There is little evidence
of any strategic perspective amongst those
interviewed. However, there was considerable
discussion of the barriers to implementation and
the need for cultural change. What was noticeable
lacking amongst the construction interviewees
was the shared sense of destiny that
characterized those from the aerospace sector.
Although they repeatedly cite SCM as a means
of alleviating industry fragmentation, construction
interviewees did not tend to refer to the dynamics
of inter-temporal change without direct prompting
from the research team. For construction
practitioners, the mantra of culture change seems
to transcend all other issues. In common with

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traditional ways of procurement within

construction and identified the problems, and
solutions in terms of better ways of working.
Similarly, practitioners have informed the
researchers their initiatives within the industry to
bring improvements within the industry through
construction procurement process. Some of the
findings from the case study in UK construction
industry are listed below. There is a true
understanding of what does partnering mean by
the entire supply chain participants.

that a regular workflow can be achieved, prime

contractors may well be able to form collaborative
relationships with key suppliers that approximate
towards established practice within aerospace.
If clients are able to deliver the required continuity
of work, they will undoubtedly benefit in the shortterm through a more integrated service. However,
it must also be recognized that there is a point at
which supply chain consolidation may become
anti-competitive if new entrants are not
encouraged. In either case, the influence of
collaborative SCM practices on the construction
industry at large is likely to remain small in
comparison to highly consolidated sectors such
as aerospace.

Long-term relationship among supply chain

members, which was due to trust and open
communication;
Processes are in place to incentivize for good
performance as part of the supply chain;

A compilation work (Pryke, 2009) related to UK

construction industry gives the insight into the
basic concepts of construction SCM and the
extent of applicability of SCM in a particular
geographical surroundings.

Integration and Coordination

Construction Supply Chain

Appropriate strategies are in place for main

contractors to use local suppliers,
subcontractors, and work force;
There is a commitment of client to provide long
term work (work continuity) for enhancing
supply chain integration;

in

One of the primary reasons for the adoption of

supply chain in construction has been the need
for the integration in construction projects. The
researchers (Khalfan and McDermott, 2006) have
discussed different initiatives in the construction
industry, in order to achieve optimal level of supply
chain integration. The work discusses the
concept of aggregation, and also looks at other
supply chain integration related concepts
including client-led supply chain, knowledge about
the whole supply chain, effects of procurement
on integration of supply chain, etc. Old concept
of working together with new name of integrated
supply chain is among one of the hot research
topics in the recent years within construction
management. Researchers have looked at the

Strong commitment of clients and main

contractors to invest in training and
development of their supply chain
organizations;
Early payments of services provided is
observed;
Involvement of downstream suppliers and
subcontractors at the beginning to understand
the buildability and interface issues, is not very
common;
Learning is taken from one project to the new
projects;
Support is provided from main contractors to
their supply chain partners if any one of them

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Decision Models in Construction Supply

Chain

are in troubled water either financially or skill

shortage-wise, etc.; and

The risk management is an essential component

in any construction project. A Case Based
Reasoning - Decision Support System
Framework for Construction Supply Chain Risk
Management which can support decision
makers in preventive as well as interceptive
construction supply chain risk management has
been formulated by the researchers (Kumar and
Viswanathan, 2007). They have suggested an ITenabled solution to the risk management problem
in construction supply chains. The paper
discussed the framework of an integrated DSS
based on CBR, which Risk Management is an
essential process of construction project
planning. When a risk event occurs during project
execution, the required actions are taken by
project managers using their own experience and
knowledge. While knowledge and experience
gained in past projects is very useful in identifying
and managing risks in a new project, such
information resides primarily in Project Managers
minds and is seldom documented in a reusable
form of information. A decision support system
with a case-base of previously taken actions and
a record of previous risk management plans can
assist managers in risk management of
construction supply chains in a new project. This
paper suggests the framework of a Decision
Support System adopting Case-Based
Reasoning approach; which can support decision
makers in preventive as well as interceptive
construction supply chain risk management. As
the DSS can be used flexibly for various different
projects, it ensures the return on investments.
For the firms who undertake projects in a
particular segment, this CBR system would bring
enormous savings.

All supply chain participants are practicing the

partnering ethos both in the office as well as
on construction and development site.
The results from the case study are showing
savings in time and cost. To maintain the
momentum of these gains there must be a
continuation of the positive attitude amongst the
partners in sharing their knowledge and
experiences on future projects. By this approach,
further benefits will be passed onto the client and
end users. At this point, there is a positive
approach by all partners to take the innovative
approaches forward to achieve its targets. All the
partners in the supply chain are committed to the
innovative ways of solving problems, and new
methods of working with each other as an
integrated team. The supply chain partners in the
case study are highly motivated to the framework
agreement because of the continuity of work,
agreed profit margin, long- term relationship with
client and other supply chain members, and
recognition of their quality services in response
to the invitation to work with the clients, fully
subscribed to innovate the processes related to
procurement and supply chain integration within
the construction industry. Money saving through
reducing cost is another motivating factor for
being part of such framework agreements
especially

for

main

contractors

and

subcontractors. One of the biggest cost

reductions is achieved through not incurring cost
in tendering for jobs for the same client for a
period of say 3-5 years.

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revenue incentive intensity so as to harmonize

the benefit between the client and the contractor
and reach a certain equilibrium state.
Furthermore, the influence of some factors on
this equilibrium state is analyzed through a
numerical example. Results of the research show
that revenue-based incentive mechanism is
effective in object and benefit coordination
between the two parties of construction supply
chain.

In the area of collaborative SCM application to

project management now focus is getting shifted
to present systematic models. It has been
brought out (Hu, 2008) that the construction
management is generally characterized with
project-based management which is scattered
with separated responsibilities from independent
construction participants and separated phases
from the lifecycle of construction. Efficient
construction collaboration among all participants
and construction lifecycle is crucial to improve
construction management performance. Supply
chain management is an innovative and
systematic approach to resolve many problems
in construction collaboration, but the construction
supply chain is relatively fragmented and
inefficient since construction management
process and collaboration are unique. The
researchers have presented a systematic supply
chain management model for construction
projects, and construction information is specified
and illustrated for supply chain management. The
information flow in the construction supply chain
system has been optimized to improve
construction collaboration performance, and an
efficient internet-based construction collaboration
model has been suggested to accelerate the
innovations for management of construction
projects.

During last few years, the researchers have

contributed in developing various mathematical
models for decision making and integration in
construction supply chain. One such study to
explore the special characteristics of the
construction industry and develop a maturity
model for measuring and improving the
relationships between the key partners of a
construction supply chain has been conducted
(Meng et al., 2011). The model follows the
capability maturity principle and defines four
maturity levels of construction supply chain
relationships. It is in a matrix format, which
provides detailed descriptions for assessment
criteria in eight categories at each of the four
maturity levels. It also provides three assessment
procedures of varied depths, which outline
different ways of using the model. The model is
evaluated through a series of expert interviews. It
can help construction organizations to assess
their existing relationships and identify key areas
for further relationship improvement. Relationship
improvement in supply chain may cause
performance to improve also, by reducing the
costs of conflict and increasing the opportunities
of collaborative working.

The timely completion of construction projects

is always associated with costs to the company.
A time-cost trade-off problem to optimize net
revenue has been developed by the researchers
(Jian-hua and Wan, 2010) to discuss the impact
of an incentive plan combined with a lump sum
contract on the determination of a projects
optimal duration. A bi-level programming decision
model has been proposed in the viewpoint of the
client to discuss the optimal selection of the

In bid to find the application of Real Options

concept in construction supply chains,
researchers (Tran and Tookey, 2012) have carried

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lean thinking as well as relevant lean technologies

to solve the major problems of EPC project
management and improve the overall
competence of our Construction supply chain.
The researchers have brought out the
Construction Supply Chains (CSC) are filled with
various kinds of waste and luxurious coordination
cost mainly due to uncooperative behavior and
adversarial relationship among parties/actors.
These problems have greatly affected the
effectiveness of the EPC project management
as well as the comprehensive performance of
CSC. The reason can be largely attributed to the
lack of advanced project management thinking
and appropriate EPC project management model.

out the feasibility study in New Zealand

construction Industry. Real Options (RO) has
been a universally accepted concept in a number
of major industries. However, its use in the
Construction Supply Chain Management (CSCM)
sector has been limited. Some rare supply chain
management RO studies have shown a number
of limitations. First, there is a lack of a rigorous
theoretical RO framework pertaining specifically
to CSCM. All such supply chain management RO
studies are based off RO theories or models
developed for other sectors (engineering,
infrastructure, natural resources). And second,
attempts to extend real option to wider uses in
CSCM seem premature at the present. The study
proposes a research program pertaining to CSCM
in New Zealand in order to enhance the current
understanding of RO in this area and in the
process develop a comprehensive theory for the
RO application in New Zealand CSCM.

Material Flows in Construction Supply

Chain
The smooth flow of material across the
construction supply chain is considered as major
factor in successful execution of construction
projects. The identification of challenges of UK/
Irish contractors regarding material management
and logistics in confined site construction has
been documented by the researchers (Spillane
et al., 2011). The researchers have identified the
various managerial issues encountered by UK/
Irish contractors in the management of materials
in confined urban construction sites. Through
literature review, interviews, case studies,
cognitive mapping, loop diagrams and
questionnaire survey an insight into the materials
management concerns within a confined
construction site environment has been
envisaged and portrayed. The leading issues
highlighted are: that contractors material spatial
requirements exceed available space, it is difficult
to coordinate the storage of materials in line with
the program, location of the site entrance makes
delivery of materials particularly difficult, it is

A study is to analyze the development of SCM

introduction in the construction industry,
investigating the risk factors affecting the
implementation of SCM principles has been
conducted by the researchers (Aloini et al., 2012).
The researchers have identified a lack of
Construction Supply Chain Risk Management
(CSCRM) literature which is mainly conceptual
and descriptive and focused especially on the risk
assessment phase. Common risk factors have
been identified in literature and critically analyzed
considering eight key perspectives. These stress
the attention on the project planning phase and
confirm the main contractor as the main promoter
for the SCM practice.
The researchers (Yan, 2012) have also
introduced lean construction supply chain
management model to Engineering Project and
Construction (EPC). They have aimed at applying

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management is to quickly obtain real-time

information, minimize cost, increase levels of
service, improve communication among supply
chain components, and increase flexibility in
terms of delivery and response time. In the
traditional construction industry, construction
processes are always labor-intensive, manual,
and time-consuming. With the advent of the
information technology, it is possible to achieve
the supply chain management for construction
by seamlessly connecting all components in the
construction chain with real-time information. The
supply chain of construction contractors includes
internal construction supply chain and external
construction supply chain. The scholars propose
simplified models for internal and external
construction supply chains to achieve supply
chain management for construction by utilizing
information technologies. These information
technologies adapted in construction supply chain
management include Internet, Intranet, Extranet,
and Mobile devices (such as Personal Digital
Assistant device). In addition, XML is introduced
for standard and technology designed to
accelerate data sharing by seamlessly integrating
systems across the construction supply chain
effectively.

difficult to store materials on-site due to the lack

of space, and difficult to coordinate the storage
requirements of the various sub-contractors.
With the continued development of confined urban
centres and the increasing high cost of materials,
any marginal savings made on-site would
translate into significant monetary savings at
project completion. Such savings would give
developers a distinct competitive advantage in this
challenging economic climate. As on-site
management professionals successfully identify,
acknowledge and counteract the numerous
issues illustrated, the successful management
of materials on a confined urban construction site
becomes attainable.

Information Flows in Construction Supply

Chain
Moving on further in a bid to improve coordination
in construction supply chain and flow of
information amongst various entities an ebusiness model to support supply chain activities
in construction has been developed by
researchers (Eddie et al., 2001). A virtual network
structure that acts as a value-added component
of an e-business infrastructure has been used
by researchers to improve communication and
coordination, and encourage the mutual sharing
of inter-organizational resources and
competencies. The researchers have contended
that the proposed e-business model not only will
be of benefit to those organizations which operate
in the construction supply chain, but also may be
fit for other types of business-to-business ecommerce when cooperation between business
partners is necessary to improve organizational
performance and gain a competitive advantage.

Supply chain management is both a

management process and an e-commerce
technology integration that extends beyond the
enterprise into supply chain. Information is crucial
to the performance of a supply chain because it
provides the basic upon which supply chain
managers make decisions. Information
technology consists of the tools used both to gain
awareness of this information and to analyze the
information to make the best decisions for the
supply chain. The essential process of supply
chain management for construction is the

The researchers (Lin and Tserng, 2001) have

brought out that objective of supply chain

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Ranjan Tiwari et al., 2014

term effect will be better scheduling leading to

lower inventory costs and eventually
manufacturing closely to order. By linking the
entire supply chain more closely, contractors will
be better able to respond to the demands of
ecommerce.

exchange of data among components in the

chain. In recent years, this exchange occurred
using telephone, fax, or paper-based systems.
Use of the Internet, Intranet and Extranet has
changed the platform for data exchange forever.
Ordering, billing and information-sharing functions
are migrating to Web-based applications in supply
chain management. These applications of
information technologies allow the entire
construction supply chain more access to
information and data and quicker response times
by contractors and suppliers. Extensible Markup
Language (XML) is becoming the new
communication standard. XML is poised to
become the standard for business-to-business
communications. It promises the seamless
exchange of data between applications, allowing
companies to conduct business via the Web
without the heavy-handedness of previous
programming languages. In addition, XML
technology provides a cross-platform approach
to information exchange. Using XML technology,
corporations are able to integrate with other
corporate business systems through the
exchange of business documents. The
ineffectiveness and inconvenience of current
ways of information processing and data
collecting at construction sites can be improved
by integrated with promising information
technology such as mobile device personal
digital assistants. In addition, the mobile device
enabled on-site engineers to access information
cross the supply chain and integrate information
into supply chain management system.
Construction Supply Chain Management is
intended to make savings by linking the supply
chain more closely, making manufacturers more
responsive to orders placed online and enabling
the widespread use of e-procurement. Its short-

The important of IT in the supply chain will

continue to grow. As supply chains become more
global and more complex and as customers and
competition become more demanding,
companies will need the supply chain capabilities
that only sophisticated IT systems can give them.
Therefore, the important of IT to a supply chain
can only increase. The future role of IT in the
supply chain, however, is very difficult to predict.
An attempt to transform Construction supply
chain into knowledge bases supply chain has
been carried out by the researchers (Konukcu,
2011). The scholars have reported that
construction is a project-based industry and
construction supply chains generally work with a
unique product in every project. Commonly,
project organizations are reconfigured for each
project. This means that construction supply
chains are characterized by various practices and
disjointed relationships, with the result that
construction supply chain actors generally have
transient relationships rather than long term risk
sharing partnerships. A consequence of this is
the lack of trust between construction clients,
designers, main contractors and suppliers.
Because the construction supply chain works as
a disparate collection of separate organizations
rather than as a unified team, the supply chain
suffers from lack of integration. Knowledge flow
in construction supply chains are hindered due
to the reasons such as inadequate adaptation to
collaborative procurement type projects,
inadequate collaboration between the

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of the knowledge chain framework was to enable

construction bid managers/project managers to
plan and manage the project knowledge flow in
the supply chain and organize activities, meetings
and tasks to improve SCM and KM throughout
the supply chain in an integrated procurement type
(PFI) project life cycle. The knowledge chain
framework was intended to depict the knowledge
flow in the construction supply chain specifically,
and to offer guidance for specific business
processes to transform the supply chains into
knowledge chains. Finally, this research focused
on the evaluation of the framework through
industry practitioners and researchers. An
evaluation of the Framework was conducted via
workshop followed by a questionnaire comprising
industry experts. The findings indicated that
adoption of the Framework in construction project
lifecycle could contribute towards more efficient
and effective management of knowledge flow,
standardization and integration of SCM and KM
processes, better coordination and integration of
the SC, improved consistency and visibility of the
processes, and successful delivery of strategic
projects. The overall research process
contributed the construction research in many
perspectives such as introduction of knowledge
chain concept for construction supply chains;
comparative analysis of the SCM practices in
different industry sectors, identification of best
practices for construction supply chains, better

downstream and upstream supply chain, lack of

interoperability of the design tools, lack of well
structured SCM process and lack of well
developed knowledge management applications.
These characteristics of the construction supply
chains are the main reasons for its low efficiency
and productivity in project delivery. There is a need
for the development of appropriate systems to
ensure the effective diffusion of knowledge such
that each actor of the supply chain adds value to
the project delivery process. This is expected to
result in the creation of knowledge chains in
construction. The scholars believed that
construction SCM, when integrated with
Knowledge Management (KM), can successfully
address the major problems of the industry. The
research aimed to develop a framework to
transform construction supply chains into
knowledge chains . To reach this aim, the
research first provided an overview of practices
and issues in SCM across a range of industry
sectors including construction, aerospace, and
automotive industries. It discusses research and
developments in the field of SCM and KM in
construction industry, the key SCM issues with a
knowledge flow focus, and the best practices from
other industries to improve the construction
supply chains. Furthermore, the results of the
company specific and project specific case
studies conducted in aerospace and construction
industry supply chains are presented. These
results include the key SC problems, key issues
related to knowledge flow and the presentation of
knowledge requirements of each supply chain
actor. Following the data analysis process, a
framework to transform the construction supply
chain into a knowledge chain taking full
cognisance of both the technical and social
aspects of KM was presented. The main purpose

demonstration of the maturity level and critical

factors of the SCM within the construction
industry, demonstration of the KC framework
which integrates the supply chain process and
knowledge sharing within a single framework
which covers all the recent trends in the
construction industry like collaborative

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It looks at the enterprise as a whole. It includes

not only relationships with other functions within
the firm but also with all trading partner
relationships outside the firm. For this reason
Supply Chain Management is said to have
Visibility and allows development of a
consistent supply and demand plan from the
customer to the supplier.

procurement route projects, creation of better

integrated SCs, applications like offsite
construction and BIM where all supply chain
management and knowledge management
should take place.
The role of information sharing in construction
supply chain has been explored by researchers
(Harsha et al., 2013) by reviewing of all the main

Hence a planner, by taking a holistic view of

the process from start to finish, can devise a
complete plan for the movement through the
chain of a specific product. This kind of planning
could take place between the various functional
groups (sales/marketing, manufacturing,
distribution) of a vertically integrated enterprise
or between several independent companies
in the distribution channel (raw material
suppliers, manufacturers, third party logistics
services).

developments in the area. Coordinating and

defining each player in construction project and
their activities is a very complex task. Hence, an
Information System capable of aggregating and
displaying the relevant information, in the right
time, is an extraordinary tool to help the
construction site managers. There is a diversity
of software available in the market that is very
powerful in many specialized areas, but lacks the
supply chain management overview. It has been

This can provide better service, reduce

inventories, reduce paperwork, help
consolidate distribution centers, and reduce
transportation costs.

concluded by the researchers that the information

sharing is valuable for the whole Construction
Supply Chain. However, thorough and much
practical research is yet to be conducted in the

The authors have concluded the following

reasons and barriers for the slow growth of
supply chain management in construction.

area of implementation of SCM and IT for effective

and efficient data management and systems
integration issues. For information sharing which

Lack of guidance for creating alliances with

supply chain partners.

can be improved by Information Technology, more

attention should be paid on development of
advanced information technology to support

Failure to develop measures for monitoring

alliances.

sharing information efficiently.

Inability to broaden the supply chain vision

beyond the procurement or product distribution
to encompass larger business processes.

Implementation of SCM Techniques in

Construction
The benefits of SCM in construction and barriers
in its implementation, has been very well
documented by the researchers (Ahmed et al.,
2002). The scholars have summarized the
benefits of construction supply chain
management as under.

Inability to integrate the companys internal

procedures.
Lack of trust inside and outside a company.
Organizational resistance to the concept.

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with regard to the sharing of data and information

(which in turn can be utilized to create knowledge).
All parties involved in the supply chain must look
to drive change through all areas of the Chain
through:

Lack of integrated information systems and

electronic commerce linking firms.
Lack of suitable organizational setup.
The researchers (Wong et al., 2005) have also
attempted to find the applicability of construction
SCM on ground by floating questionnaires and
taking feedbacks. It has been reported that
implementation of SCM in construction has been
filled with obstacles. In their study, a questionnaire
survey was used to identify the major problem
obstructing the implementation of SCM in
construction. It was found that unfair allocation of
risks and benefits commonly adopted in current
contracting systems impede the effective use of
SCM in construction. In addition, the degree of
seriousness of these problems is found to vary
with the scale and duration of projects.

Education process.
Cultural change.
An understanding that all parties will benefit /
profit
Open and shared approach to the dissection
of the associated benefits of improved supply
chain performance.
An attitude of if your in, you win with regard to
enhanced approach to Supply Chain
participation.
Pre-planning and visibility opportunities
provided by a visible client forward workload
well into the future that is shared by the Supply
Chain family.

The researchers (Peat and Anna, 2007) have

analyzed the implementation aspects of
construction supply chains and suggested
measures to improve the performance. They have
reported that initially, current supply chain
performance should be measured and
understood given that it is evaluated by the criteria
is the overall product on time and to budget?
This broad - rush evaluation quite obviously does
not provide any mechanism to fully understand
where process can be improved, wastage can
be reduced and additional value can be added.
An effective approach must be adopted towards
activities where the knowledge gained is stored,
shared and applied to the next activity. Currently,
all efforts are focused on looking forward to the
next project rather than attempting to learn from
previous activities and applying the lessons learnt
to a general raising of value adding activities.

Where possible freeze expectations but

include change where necessary through joint
agreement through the use of contingency
plans.
More effective management of subcontractors
through:
Regard the sub contractor as being part of the
supply chain (key to the value add process)
Sharing a full picture of the project
Sharing the values that are required by the
Supply Chain
Inviting input where the sub contractor can add
value
Vision for future

The whole Supply Chain must look to improve

the management of its processes, in particular

The authors have also suggested that

improvements to the supply chain must be

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best practise rather than adopting an approach

that perpetuates broadly out-dated approaches
to supply chain interaction and management.

planned and must form part of an overall strategy.

The change processes must start at the very top
of organizations and must be carried out internally
within the organization first. As progress is made
within the organization, change must then be
extended to all parties external to the organization
(but within the supply chain). Terminology and
classification of materials / products etc. must
take place to facilitate the exchange of information
through the supply chain. It was agreed that it
would be easier to drive change downwards into
the supply chain rather than to encourage change.
Whilst this would be contradictory to the preferred
incremental change process (where willing
participants were gradually educated), a step
change approach should be forced possibly by
a major client . Such change however may not
lead to true ownership of the evolved Supply
Chain. The forced change must be clearly
identifiable as being for the right reasons and not
solely for the benefit of single organizations where
it could be regarded suspiciously as a mechanism
for the client to squeeze out the margin from
the Supply Chain. The change process should
involve, where possible, like minded
organizations and should be seen as a
mechanism that will bring about change in all
directions within the supply chain. The Supply
Chain members should look to the following
mechanisms:

In the contextual studies an investigation

carried out by the researchers (Albaloushi and
Skitmore, 2008) into the degree of awareness of
the factors affecting the implementation of SCM
in the UAE construction industry as well as the
differences between the traditional and modern
management supply chain is an interesting
reading. Importance-performance analysis
indicated the largest improvements to be needed
in Support by upper management; Activity
sequences; Customer need approaches; Supply
chain technical background; and Resource
planning. In contrast with other developed
countries, the requirement for UAE companies
to associate with at least one local counterpart
company also has a significant effect on the
manner of SCM implementation particularly in
the approach and expectations concerning
knowledge sharing and coordination. SCM aims
to improve trust and collaboration among supply
chain partners, thus improving inventory visibility
and velocity, and is an innovation that seems to
be especially appropriate for construction
projects. As in mainstream management,
construction management ideas on supply
chains have been evolving with corresponding
influences from the theory of production,
distribution, and strategic procurement, but there
has been little significant research on the extent
to which the construction industry is merging the
supply chains and industrial organization fields.
In particular, the industrys awareness of both the
concept of supply chain integration and its
methods are relatively unknown, particularly in
countries such as the United Arab Emirates
(UAE). The researchers have described an

Apply best practice whenever and wherever

possible.
People and culture issues must be addressed
before positive results can be expected. These
issues are key to the success of Enhanced
Supply Chain Performance.
Organizations should look to adopt innovative
approaches to their activities and embrace

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structural failings and adopt supply chain

management best practice models. However,
many studies in the construction sector report
poor uptake. A possible reason for this is a failure
of companies to implement their supply chain
improvement programs effectively. Such changes
may involve companies adopting new
approaches, new processes and new ways of
working. In order to manage this daunting
undertaking, the role of managing new knowledge
and sequencing activities is important. Hence, the
researchers have investigated the anatomy of a
long term supply chain improvement program in
the construction industry. Building on established
supply chain management principles, and models
of supply chain learning, a longitudinal case study
has been analyzed. The researchers have
concluded that implementing the FORR IDGE
(fundamental rules for enabling smooth and
seamless material flow) principles, combined with
a structured approach to accumulating and
capturing supply chain learning, offers
considerable opportunity for competitive
advantage for those willing to invest. The
researchers content that there are a range of
barriers in achieving the vision that is set out in
the FORRIDGE principles, and that the empirical
elements of this paper inevitably have limited
claims to generalized ability, but they seek to set
out an approach to address some of the well
documented supply chain failings of the
construction industry. The principles may be
achieved in a myriad of different ways. The insight
given by the scholars, the FORRIDGE principles,
the initiatives undertaken by a construction
company, and the sequencing method proposed,
are an area of interest to researchers in the
construction supply chain management and give
organizations some guidance in designing and

investigation into the degree of awareness of the

factors affecting the implementation of SCM in
the UAE construction industry as well as the
differences between the traditional and modern
management supply chain. The data were
obtained by researchers by means of a
questionnaire survey. The majority of these
supported the need to use SCM as a tool to meet
project objectives and identified the critical factors
affecting the performance of supply chains to be
Support by upper management. In contrast with
other developed countries, the requirement for
UAE companies to associate with at least one
local counterpart company also has a significant
effect on the manner of SCM implementation
particularly in the approach and expectations
concerning knowledge sharing and coordination.
The application of SCM in particular context of
Indonesian construction industry has also been
documented by the researchers (Dewilarasati,
2010). This paper discusses a preliminary study
designed to investigate the construction industrys
supply chain structure, as an initial step toward
developing strategy for improving its
competitiveness. The researchers have brought
out that the SCM in construction industry
represents a consciously efforts in forming
cooperative network and executing construction
work amongst the construction players to
accomplish the project objectives. The research
indicates that the construction companys
business policy plays significant role in dictating
the selection of SCM patterns. This finding has
laid important foundation toward a more thorough
study on SCM in Indonesian construction industry.
The researchers (Gosling et al., 2012) have
reported that there have been a range of calls for
the construction industry to address perceived

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research intends to plug the gap by examining

the use of human resources in construction
supply chains, with a view of developing good
practice for HRM in construction SCM.

implementing their supply chain improvement

program.

HR Management in Construction Supply

Chain

Organizational Structure in Construction

Supply Chain

An important but often overlooked angle of human

resource management in construction has also
been analyzed by scholars (Chan and
Greenwood, 2006). The scholars have brought
out that there is a lack of research aimed at
understanding the role of human resource
management in the effective management of
supply chains. Alongside this gap, there are also
calls for the consideration of Human Resource
Management (HRM) across organizational
boundaries. The research attempts to plug these
gaps with a two-phase research methodology.
The first phase comprises a series of exploratory
interviews conducted with senior managers in
stakeholder organizations (client, contractor,
subcontractors and suppliers) within the supply
chain of a typical project in the Northeast of
England. This is to capture the perceptions of
exploitation of HRM in managing construction
supply chains and to elicit from the participants
areas of consideration for enhancing the use of
HRM in managing construction supply chains for
delivering project success. The second phase
involves the conduct of six case studies that
enabled the research team to delve deeper into
the issues identified during the exploratory phase
and to advance a model of HRM in construction
supply chain management. The researchers have
reported that strategic fit within supply chains
tends to emphasize taskbased numerical flexibility,
rather than genuine consideration and
development of human resources. On the other
hand, HRM has, until recently, rarely taken into
account interorganizational characteristics that
typify the construction industry. Therefore, this

The organizational structure of construction SCM

is an area which has now generated interest
amongst the researchers. Drawing inspiration
and legitimacy from the traditions of organizational
theory and in particular alternative mechanisms
of organizational governance, the researchers
(Tennant and Fernie, 2012) have explored an
emergent, clan form of client-led supply chain
governance in UK construction. Clan
mechanisms of organizational governance are
described as hybrid structures of exchange,
neither pro-market nor organizational hierarchy.
Not to be mistaken with alternative mechanisms
of exchange such as networks, clan forms of
client-led supply chain management are readily
distinguishable by their highly socialized
marketplace, enduring relationships and
community of practice. A qualitative research
strategy is adopted for this exploration of clan
forms of client-led supply chain governance. In
contrast to much of the prevailing work in
construction supply chain management
research, the findings draw specific attention to
a hybrid form of organizational governance, viz.,
clans. In light of challenging economic conditions,
the recognition and potential contribution of clans
as an alternative mechanism of governance is a
timely and valuable contribution to the ongoing
construction supply chain management debate.

RESULTS AND DISCUSSION

The foregoing account of literature review reveals
that since the beginning of the documented idea

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Ranjan Tiwari et al., 2014

reveals that the there are only few attempts made

by the researchers (Hu, 2008) for presenting a
total solution of application of the application SCM
methods in construction. The models developed
focus on very specific areas and these are short
of offering a comprehensive solution. The case
studies for the implementation of SCM methods
in construction have also not been documented.
Most of the models and hypothesis propounded
by the researchers (Tran and Tookey, 2012) have
yet to be experimented on ground.

of application of SCM in construction for better

costing and coordination (O Brien, 1995) wide
variety of research works have been carried out
by various scholars. The researchers have been
very keen in developing and perusing various
decision making models on very specific areas
of construction supply chain, such as, risk
management (Kumar and Viswanathan, 2007),
time -cost trade off (Jian-hua and Wan, 2010),
etc.
Another area where the researchers have
been keen is the supply chain integration and
coordination. The theories for application of ebusiness model (Eddie et al., 2001), collaborative
models (Hu, 2008) and maturity models (Meng
et al., 2011), have been propounded for
integrations of construction supply chain. The
optimum level of supply chain integration models
(Khalfan and McDermott, 2006) has also been
explored.

CONCLUSION
It can therefore be deduced from the literature
survey that the documentation of ground
experimentation of SCM methods in construction
based on the real case studies is not available in
plenty. The research works and papers published
on the subject are mostly academic studies
inspired from the success of SCM technique in
manufacturing sector. The case studies has
mostly remained confined to building and real
estate sectors with SCM tools being used
sporadically for procurement, subcontractor
relations, cost control, etc. Another most
important aspect of application SCM tools is in
execution of construction projects in constrained
and uncertain environment which has not been
explored by the researchers much. The
application of SCM in large infrastructure projects
such as ports, highways and bridges, etc., have
also not been documented. Such infrastructure
projects are highly machinery intensive and
require coordination from various disciplines of
engineering. The optimization of machinery and
equipment output their synchronization is
essential for the infrastructure projects.

As the of flows of material, information and

funds is an important ingredient in the supply
chain construction projects, the emphasis on
material flows (Spillane and Oyedele, 2011) and
information flows (Harsha et al., 2013) are other
areas which have been explored by the
researchers.
The scholars have also worked on the
feasibility of application of SCM in particular
geographical application. The application of SCM
in UK (Spillane et al., 2011), UAE (Albaloushi and
Skitmore, 2008), Indonesia (Dewilarasati, 2010),
and New Zealand (Tran and Tookey, 2012)
construction industry have been carried out.
These studies are primarily based on the data
collection and interviews to explore the extent and
feasibility of application of construction industry.

The Indian construction companies have so

far remained more or less aloof from the latest

However the in-depth analysis of the literature

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Int. J. Mgmt Res. & Bus. Strat. 2014

Ranjan Tiwari et al., 2014

approach to the construction project

management. The construction companies
contemplating for their ventures abroad must gear
up to accept the global challenges and the SCM
techniques can be prove to be very useful in this
regard. The case studies of the some of the
construction firms who have successfully
accomplished the projects in some Central Asian
countries and the documentation of their SCM
approach would be very helpful tool for Indian
construction companies. The heavy
mechanization of highway and runway
construction has most of the time being ignored
by the researchers. The optimum utilization of
machineries and the SCM approach in the
integration with the work execution is the essence
of success. There is need to develop
comprehensive manual and blue print for
application of SCM methods in execution of for
construction projects in uncertain and constrained
environment.

4.

Chan P and Greenwood D (2006),

Northumbria Research Link. Retrieved
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Christopher M (1992), Logistics and Supply

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Dewilarasati (2010), Preliminary study on

the Indonesian Construction Industry
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Eddie, W., Cheng, H. L., Love, P. E and Irani,

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Learning how to eat an elephant:
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