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.
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).
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.
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.
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 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).
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 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 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).
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 with the adoption of the same, the company has been one of the best construction companies |
The respective agile supply chain management strategy has helped Interserve 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. |
Lack of sustainability in the supply chain operations which 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.
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 practices help in managing the different supplies in an effective manner. |
Cloud computing along with big data analytics has been not used appropriately and this has affected the SCM of the organization in a negative manner. |
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.
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.
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:
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.
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.
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 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.
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 Better accuracy in the forecast Better allocation of the different promotional budgets |
There is reduction in the inventory The cost of warehousing is low in nature The material acquisition costs are low in nature The stock conditions are few in nature |
The freight costs are low in nature and this affects the entire supply chain activities 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.
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.
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.
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.
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 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:
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 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.
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.
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 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.
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
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 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.
References
Carter, C.R., Rogers, D.S. and Choi, T.Y., 2015. Toward the theory of the supply chain. Journal of Supply Chain Management, 51(2), pp.89-97.
Ellram, L.M. and Cooper, M.C., 2014. Supply chain management: It’s all about the journey, not the destination. Journal of Supply Chain Management, 50(1), pp.8-20.
Fernie, J. and Sparks, L., 2014. Logistics and retail management: emerging issues and new challenges in the retail supply chain. Kogan page publishers.
Interserve.com (2018). [online] Available at: https://www.interserve.com/ [Accessed 23 Jul. 2018].
Mangan, J., Lalwani, C. and Lalwani, C.L., 2016. Global logistics and supply chain management. John Wiley & Sons.
Monczka, R.M., Handfield, R.B., Giunipero, L.C. and Patterson, J.L., 2015. Purchasing and supply chain management. Cengage Learning.
Morgansindall.com. (2018). Morgan Sindall Group. [online] Available at: https://www.morgansindall.com/ [Accessed 23 Jul. 2018].
Qrunfleh, S. and Tarafdar, M., 2014. Supply chain information systems strategy: Impacts on supply chain performance and firm performance. International Journal of Production Economics, 147, pp.340-350.
Simpson, D., Meredith, J., Boyer, K., Dilts, D., Ellram, L.M. and Leong, G.K., 2015. Professional, research, and publishing trends in operations and supply chain management. Journal of Supply Chain Management, 51(3), pp.87-100.
Stadtler, H., 2015. Supply chain management: An overview. In Supply chain management and advanced planning (pp. 3-28). Springer, Berlin, Heidelberg.
Troselj, M., 2014. Supply chain performance. MHD Supply Chain Solutions, 44(5), p.38.
Waters, D. and Rinsler, S., 2014. Global logistics: New directions in supply chain management. Kogan Page Publishers.
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