Towards supply chain maturity in construction

Abstract

Purpose – Several studies have underlined the potential of supply chain management (SCM) in meeting the formidable challenges associated with fragmentation, adversarial relationships and insufficient customer focus in the delivery of construction projects. However, properly documented examples of successfully implemented SCM initiatives, particularly at the lower tiers of the supply chain, are scarce. The purpose of this paper is to extend the existing debates by adopting an alternative approach focusing specifically on the internal SCM organisation of both main contractor and subcontractor organisations, and their direct inter-relationships. Design/methodology/approach – This study sets out to explore the enablers and barriers to the implementation of SCM at the lower tiers of the construction supply chain, particularly the problematic collaboration between main contractors and subcontractors. SC maturity levels are formulated according to relevant SCM concepts and based on Holti et al.’s (2000) seven principles of SCM organisation, and transformed into a conceptual model. An explorative study is conducted based on interviews from eight large main contractor and subcontractor organisations in the Dutch construction industry. Findings – Discouragingly, across the organisations, more barriers than enablers to SCM are identified. Organisations are found to be particularly struggling to compete through superior value, manage costs collaboratively, and develop continuous improvement within their supply chains. The findings also underline the low SC maturity of main contractors and their inability to play the essential role of supply chain managers. Practical implications – The study underlines the need for a greater degree of main contractor leadership and improved internal organisation of both types of firms in order to achieve greater collaboration at the lower tiers of the construction supply chain. Originality/value – The study contributes to the subject of SCM in construction in two respects. First, the findings should prove valuable to both policy-makers and industry practitioners interested in the delivery of performance improvement in construction. Second, the developed SC maturity model can form the conceptual basis for the development of an applicable improvement framework towards successful SCM implementation.

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