CONCLUSIONES GENERALES

The  UK  construction  industry  is  highly  fragmented  with  a  large  number  of  small   companies   operating   in   the   sector.   Over   the   last   30   years   the   industry   has   increasingly   grown   risk   averse   and   relies   mostly   on   subcontracted   workers   to   execute   projects.   (Dainty   et   al.,   2001).   Figure   7   shows   the   distribution   of   the   construction  firms  in  three  major  European  countries  –  UK,  France  and  Germany   (compared   with   USA).   Figure   7   below   shows   that   almost   90%   of   the   firms   operating   in   the   country   are   micro   organisations   (1-­‐9   employees),   and   9.4%   are   small   (50-­‐249),   where   the   Large   and   Medium   size   only   form   0.7%   of   the   overall   proportion.  This  demonstrates  the  amount  of  fragmentation  that  exist  within  the   UK  (and  European)  construction  sector,  and  the  challenge  it  poses  especially  from   the   integration   perspective.   As   recognised   above,   production   management   requires   communication   and   availability   of   information   at   the   crucial   stages   of   production.  This  information  is  often  generated  from  and  has  to  be  communicated   across   the   supply   chain.   The   severe   fragmentation   present   in   the   supply   chain   makes   it   increasingly   difficult   for   this   information   to   be   synchronised   and   communicated   at   the   right   time.   Dainty   et   al.   (2001)   report   that   the   UK   construction   sector   is   a   long   way   from   being   able   to   achieve   true   supply   chain   integration  and  that  an  adversarial  culture  is  ingrained  within  industry’s  operating  

practices,  where  a  general  mistrust  between  companies  prevail.  This  raises  further   dimensions  to  the  existing  problems  of  production  management  and  control.  

  Figure  7.  Proportion  of  UK  Construction  Firms  by  Size  (DTI,  2004).  

Since  early  1990s  research  into  the  supply  chain  management  structure  of  

construction  industry  has  been  on-­‐going  with  a  view  to  explore  the  possibilities  of   transferring  manufacturing  concepts  to  construction  in  order  to  improve  

production  efficiency  and  reduce  project  costs  (Azambuja  and  O’Brien  et  al.,  2008).   However,  construction  supply  chains  are  distinctly  different  from  manufacturing   sector  and  direct  applications  of  management  principles  may  not  be  possible.  This   is  made  evident  in  recent  studies  carried  out  by  Vaidyanathan  and  O’Brien  (2003);   Green  et  al.  2005;  and  London  and  Kenley  (2001),  where  the  authors  have  

highlighted  key  differences  and  opportunities  in  applying  manufacturing  concepts   to  construction  from  a  supply  chain  perspective.  Azambuja  and  O’Brien  (2008)   provide  a  summary  of  the  key  differences  between  manufacturing  and  

construction  supply  chains  as  shown  in  Table  2.  

Table  2.  Manufacturing  vs.  Construction  Supply  Chains  (Azambuja  and  O'Brien  et   al.,  2008).  

Characteristics Manufacturing Supply Chains Construction Supply Chains Structure Highly consolidated Highly fragmented

High Barriers to entry Low barriers to entry

Fixed Locations Transient locations

High interdependencies Low interdependencies Predominantly global markets Predominantly local markets Information

Flow Highly integrated Recreated several times between trades Highly shared Lack of sharing across firms

Fast Slow

Supply Chain Management Tools (factory planning and scheduling, procurement, planning)

Lack of IT tools to support Supply Chain (no real data and workflow integration)

Collaboration Long-term relationships, Shared

benefits, incentives Adversarial practices Product demand Very uncertain (seasonality,

competition, innovation, etc.) Less uncertain Advanced forecasting methods

Product

variability Highly automated environment (machine, robots), standardisation, production routes are defined – lower variability

Labour availability and productivity, tools, open environment (weather), lack of standardisation and

tolerance management, space availability, material and trade flows are complex – higher variability Buffering Inventory models (EOQ (Economic

Order Quantity), safety, etc.) No models

Inventory on site to reduce risks Use of floats (Scheduling) Capacity

planning Aggregate planning Optimisation models Independent planning Infinite capacity assumptions Reactive approach (respond to unexpected situations, for example, overtime)

Azambuja   and   O’Brien   (2008)   note   that   the   terms   like   buffer,   variability,   and   uncertainty   are   not   yet   common   among   experienced   construction   managers.   However,   on-­‐site   production   inefficiency   is   often   caused   by   poor   production   planning   (which   includes   decisions   on   buffers)   and   limited   planning   concerning   the   impact   of   off-­‐site   production   and   delivery   variability.   To   mitigate   the   risk   of   variability  the  common  practice  is  to  amass  vast  inventory  of  resources  including   space,  material,  labour,  equipment  and  even  production  tasks,  which  is  a  form  of  a   major  waste.  

The  increase  in  complexity  of  construction  projects  and  market  dynamics,  results   in   increase   in   the   level   of   fragmentation.   This   creates   further   difficulties   in   coordinating  the  supply  chain  as  (Azambuja  and  O’Brien,  2008):  

• The  number  of  planning  activities  and  alternatives  increases  dramatically;   • Divergent   stakeholder   interests   need   to   be   managed   (Wiendahl   et   al.,  

2005);    

• Lack  of  understanding  of  the  project  by  different  participants  (Formoso  et   al.,  2002)  

It   emerges   from   the   above   that   the   supply   chain   management,   especially   the   fragmentation   of   the   supply   chain,   and   the   temporal,   site   based   production   in   construction   creates   significant   problems   from   production   planning   and   control   perspective.    

Sacks   et   al.   (2010)   describe   factors   that   make   coordination   between   subcontractors,   material   and   equipment   suppliers,   construction   management   personnel,  designer  and  inspectors  difficult  as:  

• Physical   dispersion   of   the   teams   within   the   building   or   across   the   site   where  they  are  usually  hidden  from  one  another  by  the  structure  itself   • Contracting   relationships   with   remuneration   terms   that   encourage   local  

optimisation  and  work  against  overall  project  organisation  

• Complex   variations   in   productivity   rates,   which   make   it   very   difficult   to   predict  short  term  progress  

• Lack  of  effective  real-­‐time  reporting  of  progress,  despite  multiple  research   efforts  aimed  at  automating  this  aspect  of  project  control  

• Dependence   on   key   individuals   to   obtain   and   communicate   critical   information  regarding  constraint  status  to  the  look  ahead  and  last  planner   functions  

• Reliance   on   paper   documents   to   communicate   product   information,   with   the  limitation  of  design  documentation  errors,  lack  of  clarity  and  potential   obsolescence  of  information  

It  is  worthwhile  to  note  from  the  above  discussion  that  the  last  three  points  point   towards  problems  with  information  management,  and  show  interdependencies   between  the  problems  behind  the  production  management.  Also  shown  in  Table  2   above,  information  flow  aspect  is  quite  poorly  handled  in  the  construction  supply   chain.  The  information  is  handled  several  times  creating  waste;  there  is  a  general   lack  of  information  system  to  support  the  production;  and  there  is  in  general  the   lack  of  integration  between  supply  chain  members.  This  problem  of  integration   from  an  information  systems  perspective  is  discussed  in  detail  further  in  section   3.4.