Construction Supply Chain Management

Running Head: Construction Supply Chain Management
CONSTRUCTION SUPPLY CHAIN MANAGEMENT

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Construction Supply Chain Management
Executive Summary
Construction organisation faced several issues such as improper waste management, low quality
of product manufacture, use of computerised and automated tools and many more. In present
time, the construction sector throughout the world is suffering through lag in manufacturing.
According to Koskela, new production philosophy includes elimination of waste resources with
the help of small lot production, semi-autonomous machines, healthy relationship with
stakeholders, low set-up times and many more techniques. In the past, the researchers did not
consider it necessary to establish wider presentation and theoretical background of the approach.
Several names were given to this new philosophy, such as lean production, world class
manufacturing and new production system. In JIT, the key focus and the main objective is to
completely remove or decrease the amount of work in progress. Eventually, this approach forced
other techniques to emerge such as layout reconfiguration, lot size reduction, set-up time
reduction as well as supplier co-operation. TQC focus evolved from inspection oriented to
continuous process development via statistical process control. The report has also shed light on
the factor that in terms of construction logistics when it comes to supplier selection, the cost
price is considered as a minor criterion. There are many advantages of off-site construction such
as reduction of investment cost, labour cost, amount of waste materials, inventory cost and cycle
time. Egan’s report identified five required changes such as Devoted leadership, Customer
oriented service, Combining the process, Responsibility to individuals and teams and quality
driven plan. There were several loopholes in construction process and supply chain that were
needed to be identified as well as resolved. As the use of Koskela’s theory was beneficial for
Toyota and other famous brands, like the same way use of Egan’s philosophy was beneficial for
UK business ventures such as Tesco Stores, Argent, BAA Pavement Team and many more.

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Construction Supply Chain Management
Table of Contents
1.0 Introduction................................................................................................................................3
2.0 What is the current production nature in construction industry according to Koskela?............3
3.0 Which are its main components?...............................................................................................3
4.0 What is the meaning of the new production philosophy for construction in Koskela’s words?
.........................................................................................................................................................4
5.0 What kind of production is construction described by this new philosophy?...........................6
6.0 What are the general contributions of the Koskela’s report to construction logistics?.............7
7.0 Are there any linkages in the Koskela’s proposal between off-site and on-site production in
projects?...........................................................................................................................................9
8.0 What is the main purpose of the Egan’s report bearing in mind the improvement of the
construction supply chain?............................................................................................................11
9.0 Are there some problems and challenges identified in the construction supply chain by the
Egan’s report? If so, which one?...................................................................................................12
10.0 Evaluating the most important similarities and differences between reports and potential
links and the corresponding problems and solutions.....................................................................15
11.0 Conclusion.............................................................................................................................15
12.0 Reference List........................................................................................................................17

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Construction Supply Chain Management
1.0 Introduction
There has been a major number of changes in the construction sector and these changes were
made to overcome the loophole in their service. Many reports have shown that in old days, the
construction organisation worked away from customer satisfaction. Construction organisation
faced several issues such as improper waste management, low quality of product manufacture,
use of computerised and automated tools and many more. This study will discuss about two
reports that are proposed by Koskela and Egan and it will show how they change the world of
construction. Koskela’s report was more than a theory or technique, it is a philosophy that
identified the loopholes in construction world and suggested various solutions. Toyota was the
first brand that used this philosophy and eventually it was followed by other enterprises too. Just
In Time (JIT) and Total Quality Control (TQC) are considered as two main pillars of this
philosophy. On the other hand, Egan’s report primarily focused on construction supply chain
improvement. The author identified several challenges in construction supply chain and
suggested solutions accordingly. This study will also analyse the presence of any similarities or
dissimilarities between these reports.
2.0 What is the current production nature in construction industry according to Koskela?
In present time, the construction sector throughout the world is suffering through lag in
manufacturing. In terms of occupational safety, the construction sector has the worst case than
any other sector in the world. Various countries suffered from work force in construction
industry due to low quality of working condition. Based on the understandings that have been
evident in the words of Daniel et al. (2017), it can be stated that various steps have been taken to
overcome this issue.
3.0 Which are its main components?
In order to overcome construction quality issue, these are the following solutions:
Industrialization
Through industrialization, the sector is able to introduce new manufacturing machines that
helped to increase the workforce of every organisation.

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Construction Supply Chain Management
Computer integrated construction
It is evident in the words of Gomes, Koskela, Biotto, Talebi and Pikas (2017), fragmentation in
construction is categorized as a chronic issue in construction. Hence, using computer integrated
construction this issue can be encountered at maximum level.
Robotized and automated construction
Robotized and automated construction is a subset of computer integrated construction and it is
used by various researchers in order to encounter those issues.
Koskela has stated that, for more than a decade in construction sector, manufacturing is one of
the greatest innovations. According to the conceptions that have been evident in the words of
Dave, Kubler, Främling and Koskela (2016), has opined that the concept of manufacturing
brought the idea of industrialization. Paradoxically on the other hand, automation and computer
integration has also emerged from manufacturing and their implementation brought huge change
in construction world.
4.0 What is the meaning of the new production philosophy for construction in Koskela’s
words?
According to Koskela, new production philosophy includes elimination of waste resources with
the help of small lot production, semi-autonomous machines, healthy relationship with
stakeholders, low set-up times and many more techniques. As inspired by the words of Talebi,
Koskela, Shelbourn, and Tzortzopoulos (2016), in 1950’s the concept of new production
philosophy emerged and adopted by several organisations. Among all of them, Toyota adopted
this application and they followed all the elements of new production philosophy (Lauri 1992).
On the other hand, various American consultants such as Juran, Deming and Feigenbaum guided
the Japanese industry in order to monitor quality issue. Maintaining proper quality was the main
concern, therefore, ideas such as quality circles, quality assurance and various tools were
developed by the researchers. Based on the understandings that have been evident in the words
of Mohammad, Yaman, Hassan and Ismail (2016), it can be deduced that the engineers went
through various trial and error methods in order to maintain quality.
Howbeit, most of the previous research study on the field did not consider it necessary to
establish wider presentation and theoretical background of the approach. Several names were
given to this new philosophy, such as lean production, world class manufacturing and new

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Construction Supply Chain Management
production system. A major number of European and American organisations practiced this
philosophy at least partially. In the words of Koskela, Pikas, Niiranen, Ferrantelli, and Dave
(2017), various new field were diffused in this new approach such as, services, consumer
production, production development and administration. Huge number of upgrades, that is tools
and approach were applied on this new philosophy such as Taguchi-method, Quality Function
Deployment (QFD), design for manufacture and many more. In reference to the in-depth study of
Bajjou, Chafi, Ennadi and El Hammoumi (2017), it can be deduced that New Production System
(NPS) Research Association was formed in Japan as an individual organisation in 1982. Its
primary objective was to monitor and implement the new production system in member
companies. Following are the two main pillars of this new philosophy:
1. Just In Time (JIT)
In the year 1950 at Toyota car factories, Ohno and Shingo developed an initiative that was
industrial engineering oriented. According to the conceptions that are evident in the words of
Farmer, Ternasky, Wormley and Ghaskadvi (2017), it can be deduced that, this was considered
as the starting point of new philosophy. In this approach, the key focus and the main objective is
to completely remove or decrease the amount of work in progress. On the other hand, many
researchers have also stated that this philosophy is aimed to reduce the waste materials of
manufacturing by developing proper amount and combining them at the right place and right
time. Jeong, Chang, Son and Yi (2016) have stated that, following this approach a construction
company can bring improvement in their product’s quality as well as revenue generation in the
market. Eventually, this approach forced other techniques to emerge such as layout
reconfiguration, lot size reduction, set-up time reduction as well as supplier co-operation.
Waiting, overproduction, over processing, transporting, moving, inventories, developing
malfunctioned products are some of the waste materials that was recognised by Shingo in 1984.
2. Total Quality Control (TQC)
Initially, quality movement was considered as monitoring of products and raw materials using
various statistical methods. However, Japan’s quality movement has contributed for the creation
of TQC. In 1988, Shingo has stated that the term “Total” is a combination of three elements,
firstly, as application of quality control not only in production department but also to other
departments. Secondly, quality control is applied not only to worker but also to management.
Lastly, the notion of quality is expanded among all the operation of an organisation.