Lean Construction: In An Attempt To Make Supply Chain ‘Resilient’

Sarah Yousuf - A Millennial Engineer & Supply Chain Enthusiast, aspires to make Construction Industry ‘Supply Chain Resilient’.

With its importance set in from the earliest of arrival of mankind as a means of meeting the basic human need of shelter, the construction industry has gone through a lot of development since its advent. Yet it fails and draws criticisms due to time and cost over-runs. Cost over-runs occur due to contractor claims on progress disruptions and liquidated damages claimed by clients.

According to Chan and Kumaraswamy (as cited by Acuna, 2000)[1], major activities in the construction of tall buildings consists of site set-up, piling, constructing pile caps or raft foundation, the superstructure, electrical and mechanical services, finishes and external works. Under usual practice, each activity, called work packages, comprises a separate contract. The duration of each is dependent on the start or completion to a certain extent of the previous work package while the difference is known as a lag. Below is a figure of a typical master program:

With the advent of supply chain management, new approaches for reducing cost, along with increased reliability and speed can be implemented in construction. Supply chain management takes a systems view of the individual work packages in the entire project.

According to Dr. William J. O’Brien [2], construction projects can be improved through supply chain initiatives in the many ways. Improved coordination among key stakeholders, developing a better understanding of production costs and resource management across projects in view of the anticipated changes in schedule and scope of work; such understanding of the project can help projects in the following ways:

  • Identifying alternatives that would help optimize subcontractor and supplier production costs.
  • Implementing contracts that specify an equitable basis to pay for the true costs of changes, enhancing trust and information sharing among firms.
  • Designing supply chains and determining whether it would be appropriate to implement Just-in-Time or the traditional batch orders.

Achieving Supply Chain Resilience in Construction Project Management:

Project management has been managing uncertainties for quite some time now. However, risk management failed to prevent the disturbances from causing disruption in the project flow. This is where supply chain resilience has filled the gap with its proactive approach and “adaptive capability to prepare for unexpected events, respond to disturbances, and recover from them while at the same time maintaining continuity in the operations at the desired level of contentedness and control over structure and function.” (Ponomarov & Holcomb, 2009) [3].

To make a construction project resilient in its supply chain, certain mitigation policies need to be implemented. Tomlin (as cited by Barroso, V. H. Machado and V. C. Machado, 2011) [3] described mitigation (proactive) and contingency (reactive) as two approaches for dealing with disturbances. A framework to describe the implementation of mitigation policies has been described by Barroso, Machado and Machado (2011) which consists of selection of potential policies, a cost-benefit analysis of each followed by selection of policy and then implementation which differs according to the approach; it is implemented before the disturbance occurs in case of a proactive approach while it is implemented after the disturbance occurs when we take on a reactive approach.

To achieve a lean path in the construction project, avoid costs and wastage through duplication of efforts, resilience can be achieved through the mapping approach, as described by Barroso, Machado and Machado (2011). It provides a platform to understand the project in a better way by visualizing the stages along with the anticipated disturbances, their mitigation policies and comparative analysis. This in-depth analysis comprises of 6 phases for enhanced control and resilience [3]:

  • Phase 1: Mapping the current supply chain

A visual depiction of the project schedule detailing its work packages according to subcontractors responsible, timelines, constraints, suppliers involved, raw material inflow, resource usage, technology used, and the interconnection between them through a flow diagram.

  • Phase 2: Identifying a potential disturbances in the supply chain

Since each activity is a separate work package with little to no information flow between them, the result is an overall delay due to unforeseen increase in each lag with problems arising due to certain factors. A comparative overview was performed by Kumaraswamay and Chan (as cited by Acuna, 2000) [1] that highlighted the major factors causing delays:

- Inclement weather
- Labor shortage/low labor productivity
- Poor subcontractors’ performance/High degree of subcontracting
- Variations in project (design changes/extra work)
- Unforeseen ground conditions
- Material shortage/Late materials delivery
- Inadequate construction planning
- Financial planning
- Delays in design work/Lack of design information
- Poor site management
- Impractical design
- Poor communication
- Inappropriate type of contract used
- Lack of designer’s experience
- Inaccurate estimating
  • Phase 3: Mapping the supply chain considering the impact of the potential disturbance identified in phase 2

This phase analyzes the impact of the above disturbances in the project and develops another map, which is compared with the first. If the supply chain appears to be resilient to these disturbances, the process ends here and we can proceed with the project with the current plan. If not, we proceed to the next phase.

  • Phase 4: Identifying a set of reactive or proactive policies, to mitigate the supply chain management problems caused by the chosen disturbance

Policies, either reactive or proactive, are chosen for implementation. Mitigation policies can vary depending on the nature of disturbance anticipated. However, commonly required in construction projects, following policies can be taken as an example for faster construction according to a research conducted on Hong Kong Housing Authority and contractors (Kumaraswamy and Chan, 1999) [1]:

- Adequate communication and coordination between contractors and subcontractors and within project teams.
- Adopting a time-saving and standardized floor cycle.
- Minimizing design changes after construction commencement through adopting high constructability designs.
- Adequate pre-construction planning.
- Obtaining adequate equipment, increasing resource utililization on site, adequate supply of workforce and appropriate labor deployment.
- Include piling with superstructure contracts.
- Adequate training of project managers.
- Achieving reduced price by adopting use of prefabricated materials which can help avail mass production through automation and familiarize the designers with standard details. It also reduces time on site and use of formwork.

According to Kwon and Kim (2004) [4], some mitigation policies can be:

- A proper logistics plan has a strong influence on cost, time and quality especially in high-rise building projects since they are located in downtown areas. Hence one mitigation policy can be based on a logistic plan including an overall procurement plan with items having long lead times.
- Implementation of Just-in-Time concept since it is difficult to find storage yards in such areas.
  • Phase 5: For each mitigation policy chosen, mapping the supply chain considering the negative impact of the potential disturbance identified in phase 2 on the supply chain.

Although many policies can be developed, the cost-benefit analysis should be considered while selecting the most appropriate ones. A separate supply chain performance map for each disturbance and its mitigation policy is developed.

  • Phase 6: Performance measurement report for all supply chain mapping scenarios

A report is made on all scenarios highlighting the performance of each after a careful comparative analysis.

As a result, proactively highlighting the causes of disruptions in a project, generating a pictorial view for clarification, developing mitigation policies, having a systems view of the entire project by viewing it from a supply chain point of view rather than just a project schedule divided into independent work packages, promoting the flow of information by adopting visibility practices, developing appropriate contracts, adopting innovative technology; these can lead to a clear understanding long before project initiation, better resource allocation, cost savings leading to higher profits, and meeting schedules to circumvent liquidated damages and claims, all of which has been the dilemma of construction industry.

REFERENCES

1. Acuna, M. A. (2000). Reducing Time in the Construction of High Rise Buildings, Massachusetts Institute of Technology.

2. O’Brien, W. J. Construction Supply-Chain Management: A Vision for Advanced Coordination, Costing, and Control.

3. Li, P. (2011). Supply Chain Management, Supply Chain Resilience Using the Mapping Approach (Barroso, A.P., Machado, V. H., Machado, V. C.).

4. Kwon, O. K. and Kim, J. H. (2004). The Roles of Construction Management in Super High-Rise Building Projects.