Supply Chain Management in Construction Industry: Interserve and Morgan Sindall

This report analyses the supply chain management strategies of Interserve and Morgan Sindall in the construction industry. It discusses the design and implementation of SCM, configuration of SCM, collaboration, lean and agility SCM, and usage of advanced technology. The report highlights the advantages and disadvantages of SCM strategies used by both companies and their impact on the construction industry.

Running head: SUPPLY CHAIN MANAGEMENT
Supply Chain Management
Name of the Student
Name of the University
Author note

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Executive Summary
The report has helped in analysing the supply chain management of the construction industry
wherein Interserve and Morgan Sindall are the two companies which are taken in order to
compare the different strategies adopted by them. Furthermore, the different kinds of analysis
have been done in order to understand the usage of the advanced technology in the
organization which helped in managing the different kinds of activities efficiently. It was
noticed that there are different issues when there are no such supply chain management
strategies adopted by the companies and this caused huge issues in maintaining their
reputation in the competitive industry. Lastly, proper configuration of the supply chain
management strategies such as collaboration, lean and agility SCM has been discussed.

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Table of Contents
Executive Summary...................................................................................................................1
Introduction................................................................................................................................3
Overview of Interserve...........................................................................................................3
Overview of Morgan Sindall..................................................................................................3
Design and Implementation of Supply Chain Management in Construction Industry..............4
Configuration of Supply Chain of Construction Industry........................................................13
Collaboration........................................................................................................................13
Lean Supply Chain Management Principles........................................................................15
Agile Supply Chain Management........................................................................................16
Usage of Advanced Technology in Construction Companies.................................................18
Cloud Computing in Construction Industry.........................................................................18
Big Data Analytics in Construction Industry.......................................................................19
Conclusion................................................................................................................................20
References................................................................................................................................22

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Introduction
The report helps in the analysis of the supply chain management strategies which are
being followed by the entire construction industry. A modern supply chain network helps in
reducing the different complexities and this is the dynamic network for coping with such
complexities in an effective manner. Furthermore, the design along with the implementation
of the supply chain strategies within the sector will be discussed which will help in improving
the condition of the different companies in that respective industry.
The main aim and purpose of the report includes the different steps which are required
to be followed by the organizations in configuring their supply chain management through
the collaboration, lean principles along with agility. Furthermore, the usage of the advanced
technology is utilised by the companies in the entire construction industry will be discussed
to maintain the competitive advantage in comparison to the other competitors in the market.
Overview of Interserve
Interserve is one of the largest construction companies which is based in United
Kingdom. The company was founded in the year 1884 and this is multination support
services along with Construction Company in the entire UK. The revenue which has been
earned by the company is £3.25 billion in 2017 and there are more than 80000 employees
working in Interserve (Interserve.com 2018).
Overview of Morgan Sindall
Morgan Sindall is one of the construction companies which is based in UK and the
company was founded in the year 1977 and it is British based construction services which is
headquartered in London. The revenue which has been earned by the company is around
2792.7 million till the year 2017 (Morgansindall.com, 2018). The number of employees who
are working in the respective organization is 6409 till the year 2017.

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Design and Implementation of Supply Chain Management in Construction Industry
Waters and Rinsler (2017) have commented that the role of the supply chain
management in the construction industry is essential in nature which will help in maximising
the overall productivity of the organization and this helped in reducing the different
differences effectively.
The design of the supply chain management is done in such a manner which helped
the companies in the construction companies to reduce the costs along with the entire
duration of the site activities. The entire primary consideration is essential in nature which
assists in ensuring the dependable material along with labour flows as this will help in
reducing disruption to the workflow as well.
Figure: Process of SCM in Construction Industry
(Source: Monczka et al. 2015)
Furthermore, Simpson et al. (2015) has hypothesised that the main focus has to be on
the supply chain and reducing the costs in an effective manner. This rationale can be adopted

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in the entire organization which mainly focuses to achieve the wider concurrency between the
different activities which will help in reducing the duration and the total costs. Lastly, the
main focus will be on integrated management along with improvement of the supply chain
along with the production of the site. The main focus of the supply chain management is
designed in such a manner wherein it will be on clients, suppliers and contractors which will
initiate the major focus.
For instance-Interserve and Morgan Sindall are the two major companies in United
Kingdom, in which it has been seen that the supply chain management are utilised in an
effective manner which helps them in reducing the costs of operating such as this helped in
decreasing the production and purchasing costs in the organization effectively. Supply Chain
Management has helped Morgan Sindall in improving their financial position and satisfying
the customers effectively (Morgansindall.com, 2018).
Figure: Design of SCM in Construction Industry
(Source: Monczka et al. 2015)
From the above instance, this can be analysed that supply chain management helps in
managing the different activities along with the operations. Furthermore, speed is essential as

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this has been seen that companies value fast service, increasing the speed along with the
overall efficiency as well (Fernie and Sparks 2014).
Benefits of Implementing Supply Chain Management in Construction Industry
There are different kinds of implementation of the supply chain management in the
entire construction industry in which it has been seen that this has benefitted the different
construction companies appropriately. Stadtler (2015) has tried to highlight that different
business organizations or company’s wants to reduce the product development time,
furthermore to reduce the costs of production along with improving the quality of the product
which are being sold by the company to the customers in the appropriate manner.
Furthermore, Fernie and Sparks (2014) has commented and analysed that the supply
chain management looks at the entire enterprise as a whole. It includes different kinds of
relationships with other functions within the entire firm along with the different trading
partners outside the firm. It has been analysed that the supply chain management have the
entire visibility and this allows the entire development of the consistent demand and supply
chain from the different customers to the suppliers.
According to Carter,Rogers and Choi (2015), proper planning is required while
implementing supply chain related activities in the firm which will provide the companies
with planning relating to the material suppliers and third-party logistics services effectively
which provides a brief overview on the different kinds of services provided by them
appropriately. This provides the different organizations in providing better service to
customers along with reducing the inventories along with the paperwork.
Furthermore, in Interserve it has been noticed that this is one of the largest
construction companies in which the rate of the efficiency is high which is due to the
enhanced network of the supply chain management which is being adopted by them. The

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supply chain management has made remarkable kind of changes for the respective
organization as this helped the Interserve company in achieving the long-term profitability of
the organization and this helped them in gaining huge rate of efficiency as well
(Carter,Rogers and Choi 2015).
Strategies of Supply Chain Management in Interserve
According to Monczka et al. (2015), the characteristics of the supply chain
management in the entire construction industry has been classified by the following kind of
elements which is converging supply chain which helps in directing the different materials to
the site of construction and wherein the object is being assembled from the different
incoming materials.
It has been seen that Interserve uses the adoptive and agile supply chain management
in which this has helped the company in rapid planning and integrated kind of execution.
With the adoption of the respective supply chain management strategy, Interserve is one of
the major competitors in the construction industry and this has helped them in providing more
satisfaction to the customers and this has helped the company as well without disruption of
the process of manufacturing.
Advantages and Disadvantages of Supply Chain Management Strategies Used by
Interserve
Name of the
Company
Strategies Adopted
by the Companies
Advantages Disadvantages
Interserve Agile Supply Chain
Management that
helped the company in
rapid planning and
The respective agile
supply chain
management strategy
has helped Interserve
Lack of
sustainability in
the supply chain
operations which

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with the adoption of
the same, the
company has been one
of the best
construction
companies
in adapting to the
changes in the market
and this has helped the
company in adopting
the sustainability
which helped them in
accelerating their
innovation procedures.
Furthermore, with
building of adoptive
and agile supply chain
management,
Interserve has been
able to reduce the
different complexities
and the company has
gained huge
competitive
advantage.
created huge
issues in the
organizational
capability to plan
the different
operations
regarding the
trade-off decisions
as well.
For instance-Interserve Construction Company which is situated in United Kingdom
uses the agile SCM which helps the company in operating themselves in low inventory cost
and this has provided them with ability to change effectively and adjusting to the conditions
of the market as well.

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Strategies of Supply Chain Management in Morgan Sindall
Furthermore, Monczka et al. (2015) has stated and hypothesised that the process of
the supply chain management is simpler in nature and this is one of the typical make to order
supply chain with the different projects which created a new product or prototype. The author
has commented that the effectiveness and efficiency in the entire supply chain of construction
industry is weak and poor in nature and the supply chain management is essential in nature.
It has been seen that in Morgan Sindall, the SCM strategy adopted by them helps in
optimising the design of the product along with manufacturing and accelerating the profitable
kind of innovation as well. This has been seen that the product innovation and competitive
advantage helped them in increasingly stem from the selection along with management of the
technologies along with suppliers.
Advantages and Disadvantages of Supply Chain Management Strategies Used by Morgan
Sindall
Name of the
Company
Strategies Adopted
by the Companies
Advantages Disadvantages
Morgan Sindall It has applied the
collaboration supply
chain management in
which this has helped
them in achieving the
collaboration process
effective
Collaboration supply
chain management
process is reliable and
this helps in predicting
the supply of the
goods and services as
well.
Furthermore, the right
processes along with
Cloud computing
along with big
data analytics has
been not used
appropriately and
this has affected
the SCM of the
organization in a

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practices help in
managing the different
supplies in an
effective manner.
negative manner.
Overview of SCM Strategy Process
SCM strategy is essential for the organizations as this helps in smooth transition of the
different products through the supply chain. SCM strategies help in operational and sales
planning and this increases the overall productivity of the organizations as well. In this
context, Interserve and Morgan Sindall are the two construction companies that have been
taken into account to discuss the strategies used by them as to improve their position and gain
more competitive advantage as well in comparison to the other competitors in the market
(Simpson et al. 2015).
For instance- The main tasks of the construction companies is to provide their
customers with the best possible output with the virtual integration of the collaborative
planning among the different departments in order to cater the demands of the customers in
the market (Fernie and Sparks 2014). In case of Interserve, the company is required to
provide the customers with the final output that is building construction or readymade flat.
However, there are different ingredients required by the company to fulfil the dreams
of the customers. Interserve uses the agile supply chain management in which they deliver
the perfect product and service to the customers by usage of cost –efficient engine for their
growth and this helps the company in becoming successful in nature as well. It is the entire
duty of the company to check for the different essential products which is required to be
adopted by the company to gain more competitive advantage.

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However, on the other hand, Morgan Sindall uses the collaborative supply chain
management strategy in which the company tried to provide the customers with final
products with improved customer service metrics and this assisted the company in quicker
decision making in reaching to their final decisions. The suppliers of the Morgan Sindall try
to adopt the collaborative supply chain management in which this has helped them in
managing their productivity and this affected their brand image as well.
Figure: Process of SCM Strategy
(Source: Watersand and Rinsler 2017)
Overview of Supply Chain Management and Impact on Construction Industry

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Supply Chain Management is defined as the umbrella term which comprises of the
sequence which helps in contributing towards the creation along with delivery of the good or
service to their end customers. Supply Chain Management is cost effective method of flowing
of the different goods and services along with the movement and storage of the raw materials,
work in progress and finished goods in the organization (Mangan, Lalwaniand Lalwani2016).
Supply Chain Management mainly focuses on different aspects which are required to
be handled effectively and they are as follows:
Design of the product
Planning/forecasting
Order management
Stock management
Fulfillment of order
Return management
According to Mangan, Lalwani and Lalwani (2016), it has been analysed that supply
chain management is the network of the different organizations which are involved in the
same with the upstream and downstream linkages.
On the other hand, Waters and and Rinsler (2017) has commented that there are
different kinds of relationships in the construction industry which can be analysed with the
help of the diagram in which it is seen and managed that the demand management along with
qualification of the suppliers is essential which provides proper view on the different kinds of
activities required to be performed by them.

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Figure: Supply Chain Management in Construction Industry
(Source: Ellramand Cooper 2014)
With the implementation of SCM, this included optimising the operations to
maximise both the efficiency and speed which provided the different target customers of
Interserve with providing value to the customers and to retain them effectively as well. The
flow of the different kinds of goods and services was becoming more appropriate with the
implementation of SCM and the marketing channels has played a huge role in the SCM
which helped Interserve to become more popular in the construction industry and this has
helped them in attaining success in the competitive industry as well.
Configuration of Supply Chain of Construction Industry
Collaboration
Proper configuration of the supply chain management of the construction industry is
essential in nature as this helps in managing the different kinds of barriers which will help the
company in reducing the different costs such as operational costs. The collaboration of the

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supply chain management is essential in nature which accelerates the entry into different new
markets in an effective manner. Furthermore, collaboration in the supply chain management
changes the actual relationship between the cost and profit equation.
Figure: Supply Chain Network in Construction Industry
(Source: Stadtler 2015)
Furthermore, in the entire construction industry, the supply chain management
collaboration has different benefits which help the entire market to be more competitive in
nature. It has been seen that the benefits are being gained by the different parties such as
customers, service and material suppliers as well. The main aim of the collaboration is to
provide satisfaction to the customers in the market and this will play a major role in
managing the differences effectively (Stadtler 2015).
Customers Material Suppliers Service Suppliers
There is reduction in
the inventory
The gross margin is
high in nature
There is reduction in
the inventory
The cost of
warehousing is low in
The freight costs are low
in nature and this affects
the entire supply chain
activities

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Better accuracy in the
forecast
Better allocation of the
different promotional
budgets
nature
The material
acquisition costs are
low in nature
The stock conditions
are few in nature
The capital costs are lower
in nature
There is reduction in the
fixed costs
The delivery is faster and
reliable in nature
Table: Relationship between Suppliers and Customers
(Source: Created by Author)
From the above table, this can be analysed that there are different kinds of advantages
provided to the different suppliers along with the customers. This has been seen that the
customer service quality will be improved along with this will help in bringing in more
efficiency in the usage of the human resources management in the organization in the
construction industry effectively without much issues (Stadtler 2015). Additionally, this can
be seen that the successful supply chain collaboration helps in trying to collaborate internally
and help the different partners to work with it effectively and this is made sure that the people
are involved in the process effectively.
Lean Supply Chain Management Principles
The lean supply chain management helps in representing new method of thinking
about the networks of the different suppliers of the construction firm. Furthermore, in the lean
SCM, proper and accurate along with cooperative supplier relationship is essential which will
assist in balancing cooperation along with competition (Qrunfleh and Tarafdar 2014).
Suppliers’ relationships along with the strategic alliances help in representing key feature of
lean supply chain management.

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For instance- This has been seen and analysed that there are different kinds of lean
organizations such as Morgan Sindall which help in managing the different activities in an
effective manner. Just in Time approach has been applied by the respective company in
which this has been seen that the company tries to include the availability of various goods
and services when these are required by the different customers and the entire goal of the JIT
is aligned with the planning of supply chain.
Agile Supply Chain Management
The supply chain management has different kinds of characteristics which are
required to be maintained in an effective manner. Furthermore, this has short led time along
with fast replenishment of the goods in the organization effectively. Additionally, the agile
supply chain management helps in reducing the complexity. Furthermore, the main objectives
of the agility SCM includes the various types of customer enrichment along with being ahead
of the other competitors in the market.
To achieve the mass customization at cost of mass production
To master the different changes along with reducing the uncertainty with the
assistance of adoptable structures
To leverage the actual impact of the different individuals across various enterprises
with the help of the information technology
For instance- Interserve is one such examples wherein this has been noticed and
analysed that agile supply chain management is required to be implemented as this helps in
managing the different kinds of events which are appropriate for the construction industry.
Limitations of Implementation of SCM in Construction Industry
There are different limitations on the implementation of the supply chain management
in the entire construction industry. Brandenburg et al. (2014) has commented that the

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limitations in the supply chain management can create huge issues for the companies in
managing their efficiency level and this affects the overall productivity of the organization as
well. The different difficulties or the barriers in the SCM of construction industry are as
follows:
There is huge lack of guidance for creating different kind of alliances with the supply
chain partners
There is failure in the development of the measures for monitoring the different
alliances
There is huge inability which do not broaden the relationship and vision of supply
chain beyond the procurement and this is encompassed in the large business
There is lack of trust both outside and inside the organization ineffectively
There is lack of suitable organizational setup and this creates lack of integrated
information system as well
There is lack of integration in the internal procedures of the company
Furthermore, Troselj (2014) has hypothesised that there are different problems in the
operational level and there are different factors such as the bank rates, strikes among the
different labourers which makes the situation difficult in nature to work efficiently in nature
in the organizations in the construction industry. It has been seen that SCM is one of most
essential concepts which is important in managing the differences in an effective manner. The
Bullwhip effect is one such model of SCM which is being applied by different construction
companies which helps them in managing the complex interactions and this ripple the effect
of the supply chain management by making it more effective.
For instance- It has been seen that in both the construction companies, the forecasting
models helps in predicting the demand for the finished products of the company along with

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the cost of the raw materials. In Interserve Company, this has been noticed that the Push
Model is being used in the Interserve Companyto forecast the demand of the different
products in the market along with analysing the retail distribution centres which has helped
them in managing the different shipping of goods to the customers in the market.
Usage of Advanced Technology in Construction Companies
According to Troselj (2014), it has been seen and analysed that there are different
kinds of advanced technologies which are used by the construction companies in order to
improve their efficiency and effectiveness in the entire competitive industry. The different
technologies which are used in the construction companies which help in managing the
different processes of supply chain management in an effective manner. There are different
kinds of categories of the cloud computing which includes Infrastructure as a service,
platform as a service along with software as a service.
Cloud Computing in Construction Industry
Firstly, cloud computing is one such technology which helps in enabling convenient
along with on-demand access of network to the shared pool of the configurable resources
which are computing in nature. The different construction companies are uniquely positioned
in a unique manner which helps them in benefitting from the cloud computing as this allows
greater freedom and it helps in easing the access of information in an effective manner as
well. The proper leverage of the cloud-based services helps in the construction company as
this helps in increasing the different opportunities for the collaboration of the team and this
increases the management and owner visibility as well (Qrunfleh and Tarafdar 2014).
For instance- Interserve and Morgan Sindall are the two companies which use the
cloud computing solutions in their respective firms which helps them in becoming more
flexible and they have become more cost effective in nature. The cloud computing can help

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the different construction companies in powerful processing of the data and this is the
practical way which helps them in getting powerful insights which are being available for the
customers in the market. With the help of the cloud computing, Interserve is being able to use
the drones in order to fly over the site of construction wherein the thousands of the pictures
are taken and this helps them in analysing the Meta data of the different sites of the work in
the construction site.
Furthermore, it has been seen that in Interserve, there are different kinds of
shareholders and the sharing of data is essential in nature. Furthermore, the company uses the
cloud computing technique in managing the data and save the data from being or getting lost.
On the other hand, the Interserve company faced different kinds of difficulties such as cost in
the cloud computing is expensive in nature which increases the overall cost of implementing
the cloud storage and this has affected the overall efficiency of the firm in an ineffective
manner.
Big Data Analytics in Construction Industry
According to Qrunfleh and Tarafdar(2014), construction is one important process
wherein the big data can help the company in managing the different kinds of projects
effectively. The data which is relating to traffic, weather, community along with the different
kinds of business activities which helps in determining the optimal kind of phasing of the
construction activities effectively.
As the technology is changing in the present years, this is essential in nature for the
construction organizations which will help them in capturing data more than before such as
through the help the smart phones along with drones which will make the process effective
and appropriate in nature. There are other benefits of the big data analytics which include the

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On the other hand, it can be seen that there are different kinds of challenges which are
being faced by the construction companies as the big data analytics are not being able to
implement them effectively. The data analytics help in understanding the market conditions
and this helps the companies in properly controlling the online reputation as well.
Furthermore, Interserve is one of the biggest and largest construction companies wherein
there are different data which is required to be stored and their online reputation helps them
in affecting their brand image in an effective manner.
For instance-The big data analytics help the company in gaining competitive
advantage for the business which helps the construction companies in outperforming their
peers and this helps in providing growth opportunities for the business. Furthermore, big data
helps and assists in tracking and managing the different projects which help in managing the
data effectively which will manage the different kinds of activities in an efficient manner.
Furthermore, Interserve uses the big data in managing the planning and it helps in performing
better budgeting as well.
This has been seen that Interserve has used the big data in creating their own new
growth opportunities which has assisted them in performing better than the other peers. It has
been seen that the big data optimizes and understands the business processes. The retailers
are being able to create new kind of growth opportunities based on the predictive models
which are generated in an optimizing manner in analyzing and forecasting the weather.
Conclusion
Therefore, this can be concluded that supply chain management is essential for the
different organizations which helps them in managing their efficiencies and try to perform in
an effective manner. Furthermore, the different large corporations value the good kind of
supply chain managers as this helped them in increasing their efficiency of the different

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warehouses, transportation vehicles along with the plants. Additionally, this has been seen
that supply chain management has involved optimising the different operations along with
maximising the speed and efficiency effectively.
It has been seen that the supply chain network is of great complexity in the
construction companies and with the effective SCM, the different construction companies
have been able to improve their competitive advantage in the entire competitive market.
Furthermore, the configuration of SCM has helped the construction companies in gaining
different advantages from the strategy of SCM, however there were different issues in
implementation of SCM in the organization which affected the brand image of the
organization in a negative manner. The push and pull approach of SCM has helped the
companies in becoming successful.

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