Efficiency versus effectiveness in construction supply chains: the dangers of “lean” thinking in isolation

Abstract

PurposeTo illustrate the potential danger of applying “lean thinking” discretely and indiscriminantly in a project environment with high levels of complexity and uncertainty.Design/methodology/approachInsights are presented from two case studies of private residential construction projects which the authors believe are indicative of recent efforts to reduce the cost of construction activities.FindingsEvidence was found of attempts to remove capacity in transportation, stockholding and on‐site labour. Some of these attempts were logical and resulted in cost‐savings but others were illogical and resulted in reduced levels of responsiveness and flexibility to respond to the uncertainty which is a characteristic of most construction projects.Research limitations/implicationsFurther research is required to quantify the impact of discrete improvements in functional aspects of supply chain projects and the conditions in which lean thinking can be put to best effect.Practical implicationsFirms operating in the construction sector need to pay greater attention to the impact on the effectiveness of supply chain projects of achieving cost savings in discrete activities.Originality/valueThis paper challenges conventional thinking with respect to the application of lean principles to the construction industry and calls for greater awareness of the project‐centric nature of the construction industry and the application of lean thinking therein.

Coordinating collaboration in contractually different complex construction projects

“…The construction supply chain is highly fragmented and operates in an environment of uncertainty and complexity (Fearne and Fowler, 2006), which complicates collaborative work (Barlow, 2000). The fragmentation of the construction supply chain manifests in the separation of design and construction, lack of coordination, conflicts, low productivity, and insufficient communication (Xue et al, 2005;Bankvall et al, 2010;Pala et al, 2014).…”

Local Resources and Procurement Practices in Humanitarian Supply Chains: An Empirical Examination of Large‐Scale House Reconstruction Projects

“…Contrary to immediate response that emphasizes agility (Oloruntoba & Gray, 2006), reconstruction can be planned (Hughes, 2009;Taylor & Pettit 2009) and thus, can focus more on cost and time efficiencies. Temporary project networks form the basis for reconstruction supply chains similar to construction projects (Dubois & Gadde, 2000;Vrijhoef & Koskela, 2000;Fearne & Fowler, 2006) and HSCs in general (Jahre & Heigh, 2008). However, in HSCs, temporary project networks are configured without a potential reassembly of the same supply chain for further projects.…”

Exploring Third-Party Logistics and Partnering in Construction : A Supply Chain Management Perspective

“…Instead of studying ways to realize SCM, they question the applicability of the concept in the construction industry (cf. Fernie and Tennant, 2013;Fearne and Fowler, 2006;Briscoe and Dainty, 2005). This is partly due to the lack of measurable effects and the relative few success stories that has been documented since the work towards the realization of SCM in construction begun.…”

“…The negative side is that contractual agreements has become more important and hindered long-term development (Egan, 1998;Dubois and Gadde, 2002). The fragmentation with many small companies in a construction project can cause uncertainty (Fearne and Fowler, 2006) and problems with coordinating activities (Dubois and Gadde, 2002). Problems with coordination is not limited to the specific construction project, but also extends to the supply chain and between companies in other projects (Dubois and Gadde, 2002;Dubois and Gadde, 2000).…”