Who should be leading in the process of successful supply chain management in construction?

Despite the critical role of a client in enabling supply chain integration, parties on the supply side of the construction supply chain – the lower tiers of the construction supply chain – are believed to be able to develop into more integrated production systems, independently from the demand. Main contractors are acknowledged to have a central position in the management of supply chains, offering great potential in the effective integration of their supply chains. This is deemed to be necessary as construction supply chains are fragmented, complex, highly uncertain and with many stakeholders requiring a leading actor to coordinate the process and relationships – projects are characterised by a high supplier involvement. This study sets out to explore the differences between the organisations involved at the lower tiers of the construction supply chain, focusing specifically on the internal SCM organisation of main contractor and supplier organisations, and their direct inter-relationships. SC Maturity levels are formulated according to relevant SCM concepts and based on Holti et al.’s (2000) seven principles of SCM organisation, and used to examine the relative SC Maturity of eight large main contractor and supplier organisations within the context of the Dutch construction industry. A case study, representing a construction supply chain initiated by a main contractor as a result of ongoing poor financial performance during the economic crisis and the existence of high failure costs, is further investigated to examine the SC Maturity levels based on one of the principles in more detail. This way the paper starts a discussion towards the development of an improvement framework and brings up the need for a more mature supply chain integrator, an organisation leading in the process of SCM implementation

The Influence of Social Networks on Firm’s Success, Survival and Growth: A Social Network Analysis investigation of SMEs in the Bahrain Construction Industry

The success, survival and growth of Small and Medium-sized Enterprises (SMEs) in a fragmented construction sector is partly related to the business owner’s ability to secure critical resources through personal networks which provide information, advice, funding and brokerage (Pryke et al., 2011). The Bahrain construction industry is particularly characterised by a culture of collectivism where business activities are inextricably intertwined with social relationships. Social network analysis is used as an analytical tool to examine the resource provision ego-networks of four Bahraini SMEs owners, taking into consideration the start-up/ growth business development stages and the success/failure status of the firm. Comparative social network analysis is conducted focusing on the density of ego-networks and the prominence of resource providers and associated subgroups. The findings highlighted the evolving nature of social networks over time in order to meet the business owner’s critical resource requirements in the face of increasing uncertainty. At emergence, high density networks and strong ties, primarily family relations, play a critical role. These ties are characterised by high levels of trust and cohesion, are easily accessible, and path-dependent. As firms mature, strong ties are found to restrict the attainment of a wider range of complementary resources, and hence weak ties come into play. These ties are diversified arm’s length and market-based relationships and incorporate less sentimental factors than strong ties. The findings also underline the role of formal institutions in bridging networks’ structural holes; helping firms to capitalise on new business opportunities

SCM and extended integration at the lower tiers of the construction supply chain: An explorative study in the Dutch construction industry

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 (e.g. Dainty et al., 2001; Cox and Ireland, 2002; Gadde and Dubois, 2010). However, there remains a paucity of properly documented examples of successfully implemented SCM initiatives, particularly at the lower tiers of the supply chain. This study sets out to explore the enablers and barriers to the implementation of SCM at the lower tiers of the supply chain, particularly the problematic collaboration between main contractors and subcontractors. A SCM Maturity Model is developed based on Holti et al.’s (2000) seven principles of SCM organisation. An explorative study is conducted based on interviews from eight large main contractor and subcontractor organisations in the Dutch construction industry. Discouragingly, across the organisations, more barriers than enablers to supply chain management 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 SCM maturity of main contractors and their inability to play the essential role of supply chain managers. Indeed the principles of integrating project activities and mobilising and developing people are found to be better exercised by subcontractors. The study may highlight the need for a greater degree of 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