Third-party logistics in construction: the case of a large hospital project

Abstract

The construction supply chain is of temporary nature and complex, with many interactions between multiple actors in different construction projects. This challenging context typically leads to relatively higher costs and lower productivity, compared to other industries. Supply chain management (SCM) has been put forward as a mean to better handle this challenging context. As a part of SCM initiatives some construction industry stakeholders have turned to third-party logistics (TPL) providers, especially in large construction projects. The use of TPL providers is a new, and under-investigated, phenomenon in the construction industry. The main purpose of this study is thus to explore the use of a TPL provider in a large construction project and to analyse its resulting effects. Driving forces and possible concerns for implementing TPL are identified and the possibility for TPL to be a facilitator for implementing SCM in construction is investigated. The research is based on a literature review and an explorative case study of a large hospital project in Sweden, where the client and the main contractor have initiated the use of a TPL provider to coordinate sourcing and materials handling activities on site. The results show positive effects on establishing an effective interface between the construction site and the supply chain. The results also show that a TPL solution facilitates an increase in productive work at the construction site itself, a reduction of costs and an increased utilization of site assets. On the downside, the study also shows a lack of SCM knowledge amongst the involved actors in the project, hindering them to reap the full potential of TPL.

Combining Takt Production With Industrialized Logistics in Construction

“…Centralized logistics can be applied through third party logistics (TPL). Using TPL decreases material logistics costs in construction projects (Ekeskär and Rudberg 2016).…”

Logistics Strategy for Industrialised House Building

“…Vrijhoef and Koskela found there to be four roles for supply chain management in construction: the interface between supply chain and construction site; a focus on the supply chain; the transfer of activities from construction site to the supply chain; and the integration of supply chain and construction site (Vrijhoef & Koskela 2000). An additional "focus on the construction site", was recently identified as a 5th role (Ekeskär & Rudberg 2016). These five roles of supply chain management in construction seek operational improvement through the consideration of specific moments in the supply chain in order to improve construction activities in that moment.…”

Coordinated construction logistics: an innovation perspective

“…Construction projects are complex, something Cox and Goodman (1956, p. 43) concluded 50 years ago in their study of distribution of house-building material, saying that "the number of possible permutations and combinations of specific places and entities is enormous, even for one product". This complexity is often used in supply chain management as an argument for construction projects to implement more structured and coordinated construction logistics models (Vrijhoef andKoskela 2000, Ekesk€ ar andRudberg 2016). In the Swedish construction industry, there is currently a buzz going on regarding coordinated construction logistics.…”