Construction Supply Chain Management: Report Analysis and Comparison

This report examines construction supply chain management, drawing insights from the reports of Koskela and Egan. It begins by outlining the issues faced by the construction industry, such as waste management and quality control, and introduces Koskela's new production philosophy, emphasizing the elimination of waste through techniques like JIT and TQC. The report explores the components of this philosophy, including industrialization, computer-integrated construction, and automation, and discusses how it contrasts with traditional approaches. It further analyzes the main purpose of Egan’s report which focused on the improvement of the construction supply chain, identifying problems and challenges. The report then evaluates the similarities and differences between the two reports, highlighting potential links and suggesting corresponding solutions to improve the construction supply chain.

Running Head: Construction Supply Chain Management
CONSTRUCTION SUPPLY CHAIN MANAGEMENT

1
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.

2
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

3
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.

4
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

5
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.

6
Construction Supply Chain Management
According to the conceptions that have been evident in the words of Mallawaarachchi and
Senaratne (2015), it can be stated that it is classified as a broadly classified as more than a
methodology rather it is considered as a philosophy. This philosophy’s focus evolved from
inspection oriented to continuous process development via statistical process control. However,
in recent years, it has also expanded its wings from quality of designing to quality function
development. Based on the understandings that have been evident in the words of Mears et al.
(2018), it can be stated that JIT is totally different from TQC. Such as JIT focuses more on
advancement of stress process and determination of source errors, which is different from TCQ
philosophy.
5.0 What kind of production is construction described by this new philosophy?
In terms of construction sector, it was a slow process to implement the interest of new production
philosophy. There are three major thrusts of implementation can be determined, such as:
● According to JIT methodology, the new approach is used in construction sector as
manufacture-oriented form, such as manufacturing of elevators, windows and
prefabricated housings.
● By increasing the number of companies, the quality-based efforts are released in context
to mainstream construction. As inspired by the works of Formoso, Sommer, Koskela, and
Isatto (2017), it not only includes TQM but it also includes team building, partnering,
constructability and continuous improvements.
● In order to eliminate the barriers for process improvement, various countries took the
action to change project business venture and methods of procurement.
Unfortunately, these new philosophies and their adoption in construction sector were limited in
methods and scope. However, in context to modern world, various new sub products of
construction were developed in process that shows a manufacturing characteristic. Based on the
understandings that have been evident in the words of Biotto, Kagioglou, Koskela and
Tzortzopoulos (2017), it can be stated that several new manufacturing products were developed
for instance elevators, prefabricated concrete components, windows, doors and prefabricated
house. According to ISO standards, various supply business ventures have successfully adopted
this quality certification. Various researches and organisational implementation have discussed
that application of this new philosophy is simpler. It is clearly evident in the words of Antikainen

7
Construction Supply Chain Management
et al. (2017), in terms of manufacturing, the new techniques and processes can be applied
directly. Therefore, it can be said that there is a high chance of site construction to get obsolete
by reign of industrialized construction.
Mainstream construction
In the world of mainstream construction, only the approach of quality checks has been applied as
product’s quality was the main concern in those days. In order to improve the process,
management of product quality is considered to be beneficial. According to the conceptions that
have been evident in the words of Bayhan, Demirkesen and Jayamanne (2019), it can be stated
that the main issue is continuous progress. In terms of quality management, waste materials such
as malfunctioned products in order to meet the customer expectations. On the other hand, the
management of proper quality is often considered as second priority and this is one of the most
problematic situations. Hence, it is a different entity from the process of real management. In
terms of ISO certification, application of quality management is more connected to image and
marketing.
Various countries in the world has used other process improvement principles such as France,
Sweden and the Great Britain. For streamlining administration process, a simple campaign was
hosted as well as carried out by a well renowned French business venture. On the other hand, a
British brand took the initiative of reducing time variability in their process of manufacturing
products. However, a Swedish business venture took the matter of cycle time reduction for the
construction projects. Based on the understandings that have been evident in the words of Omran
and Abdulrahim (2015), it can be deduced that the Swedish took this initiative as their primary
goal and objective. The primary issues of all these efforts are only a limited amount of
improvement and design principles are utilized.
Following the same procedure the whole quality administration of an organisation remains
helpful and demonstrated passage point to process improvement, there is a need to continue to
the use of every accessible rule of procedure structure and improvement.
6.0 What are the general contributions of the Koskela’s report to construction logistics?
In context to Koskela’s report, construction planning is considered as one of the unique
approaches in a project. It was also stated by the author that various priorities, needs,
surroundings, sites, designer views and various other factors are there, which make it unique.

8
Construction Supply Chain Management
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. Other researchers have
found that when it comes for buying any product for construction, then the organisation goes for
low priced product. This is one the adverse situation, since these low qualities of products not
only gives poor result but also the future of that product becomes vulnerable to various threats.
However, according to the conceptions that have been evident in the words of Chileshe,
Rameezdeen and Hosseini (2016), it can be deduced that the decision-making policy for
improvement in logistics is only applicable to the experienced solutions. In this way, while
quality administration remains helpful and demonstrated passage point to process improvement,
there is a need to continue to the use of every accessible rule of procedure structure and
improvement. The offer of non-esteem including exercises in all procedures must be
methodically and steadily diminished. Expanding the proficiency of significant worth adding
exercises must have proceeded in parallel. Koskela’s report has also stated that getting started is
one hardest issue for any organisation. It may be savvy to embrace a demonstrated, regardless of
whether tight, procedure for beginning. All out-quality administration frequently is by all
accounts a decent initial step. Then again, there are specialists who recommend a methodology
increasingly cantered around simply beginning to tackle prompt issues and on learning-by-doing,
instead of following explicit execution strategies.
The author has also described that it is important to conduct process management and definition.
Work forms should initially be made straightforward by outlining them. Next, the characteristic
waste in procedures must be made noticeable through reasonable measures, and targets and
observing ought to be cantered around it. As examined before, a critical issue is to discover
measures which are venture autonomous (Daniel, 2017). Regardless of whether estimations are
not as direct as in assembling, they are not an inconceivable issue. Concerning improvement
potential, relations with different associations may frequently be seen as wellsprings of issues. In
any case, for clear reasons it is smarter to begin with taking care of inner issues. It is critical to
choose and deliberately utilize fitting standards, systems and apparatuses.
In assembling, an extensive number of explicit standards and methods have been produced for
procedure improvement. It has been noticed that by following construction logistics maybe
impressive for the organisation as they are additionally usable in development. The thoughts
concerning fundamental mechanical housekeeping are legitimately appropriate. Probably

9
Construction Supply Chain Management
development explicit strategies and procedures will rise up out of functional work, as happened
in assembling.
7.0 Are there any linkages in the Koskela’s proposal between off-site and on-site
production in projects?
In terms of Koskela’s report, off-site construction is termed as lean construction and on-site
construction is termed as typical construction. The author has stated that the issues related to
projects of typical construction can be easily overcome by lean construction.
Figure 1: Flowchart of on-site construction method
(Source: researchgate.net 2018)
These are the following techniques or methods that can be used:
● stand-out highlights are decreased through the progress of institutionalization, secluded
segments, and off-site construction.
● troubles of site generation are improved through expanded construction, fleeting
decoupling and through particular or multifunctional groups.
● the quantity of brief linkages between associations is decreased through the support of
longer-term vital collisions.
● the issues coming about because of the consecutive technique of the plan offer form
framework are overwhelmed by simultaneous designing.
In reference to the in-depth study of Ajayi et al. (2016), it can be deduced that there is always a
contradiction that whether on-site construction is better or off-site construction and vice-versa.
However, there are many advantages of off-site construction, they are as follows:

10
Construction Supply Chain Management
Reduction of investment cost
Contractual workers use manual cutting and twisting machines for on location development of
rebar. These machines have a high starting expense and despite the fact that they have a working
existence of over 10 years, the progression of their utilization is subject to whether new tasks are
in the pipeline or not. Again Ajayi et al. (2016), opined that the speculation cost for the for the
most part mechanized machines utilized in off-site development is a lot higher than the expense
of the generally crude setup utilized in on location development on the grounds that the more
refined apparatus in off-site offices permit cutting and bowing of uncommon rebar with
substantial width, and can subject rebar to extraordinary thermo or concoction medications to
suit specialized prerequisites. According to Wibowo, and, Sholeh (2015), the venture cost per
unit of rebar delivered is down on the grounds that these machines are in consistent and
persistent use for large scale manufacturing.
Reduction in labour cost
In an on-site construction, specialists move rebar from capacity to the cutting machine, cut rebar,
move the cut rebar to the bowing machine and twist the cut rebar. Interestingly, in off-site
construction, the task is very robotized and subsequently, work cost is limited.
Reduction in amount of waste materials
In reference to the in-depth study of Tezel, Gosling, Kumar and Koskela (2017), it can be
deduced that during construction, approximately 16-26% amount of resources gets wasted.
However, in case of off-site construction this scenario gets reversed as the production gets
processed in computerised way. This process is more flexible, sophisticated and standard quality
control procedure.
Reduction in inventory cost
In case of on-site construction, the resources at the inventory are maintained and it results in
increase in storage space as well as maintenance cost. However, in case of off-site construction,
Just In Time (JIT) approach is followed in accordance to deliver products in small amounts.
Eventually this results in reduction of inventory costs for the organisation’s business process
(Tezel, 2017).
Reduction in cycle time
In off-site construction, computerized methods are used to process the work of construction. It
has been stated by Adegbembo, Bamisaye, and Aghimien (2016), the productivity and accuracy

11
Construction Supply Chain Management
of these automated tools are much higher than the manual processing methods used in on-site
construction process. Therefore, the cycle time gets reduced up to great extent thus helping in the
process of reducing the cost of production.
8.0 What is the main purpose of the Egan’s report bearing in mind the improvement of the
construction supply chain?
Egan’s report sheds light on all the aspects of construction supply chain improvement. In context
to the UK, the construction sector’s performance was not up to the mark as compared with the
other sectors. Consumers were disappointed with its performance and it was an unusual nature of
any sector (Naoum, and, Egbu, 2015). However, Egan’s report named “Rethinking Construction”
suggested dynamic improvement in the sector. The author also suggested to shift focus of these
industries to deliver proper value to the customer as per their expectation. Based on the
understandings that have been evident in the words of Daniel, Pasquire, and Ameh, (2017), it can
be opined that the industry needs to work more on minimising the rate of waste products. It is
also necessary for the sector to change the existing structure and working practice in accordance
to improve the quality of work. The Task Force has described that they do not agree with the fact
that construction is different from manufacturing. Both of the terms should deal with
improvement and evolve with time.
The Task Force has also stated that maximum number of clients have their primary focus on the
final product and its cost. According to the conceptions that have been evident in the words of
Olawale and Sun (2015), it can be deduced that the customer is aware of proper delivery,
functionality and quantity of these products. The construction supply chain can also be improved
by developing the products continuously. It is necessary for the brands to understand their
customer’s demand and work according to their expectation level. Based on the understandings
that have been evident in the words of Sarhan, Pasquire, and King (2017), it can be opined that
those products must cross the client’s expectation.
On the other hand, in terms of project implementation, the constructing and engineering of the
project need to be dedicated by the higher authority of an integrated team of constructors,
suppliers and designers. In a project, the engineering system and selection of components needs
to be developed to achieve the best product target based on their performance (Daniel, Pasquire,
Dickens, and, Ballard, 2017). It is a most important part of project implementation to go for pre