Organising logistics and transport activities in construction

• Published date: 13 May 2019
• Date: 13 May 2019
• Pages: 620-640
• DOI: https://doi.org/10.1108/IJLM-12-2017-0325
• Author: Anna Dubois,Kajsa Hulthén,Viktoria Sundquist
• Subject Matter: Management science & operations,Logistics

Organising logistics and transport

activities in construction

Anna Dubois and Kajsa Hulthén

Department of Technology Management and Economics,

Chalmers University of Technology, Gothenburg, Sweden, and

Viktoria Sundquist

Department of Architecture and Civil Engineering,

Chalmers University of Technology, Gothenburg, Sweden

Abstract

Purpose –The purpose of this paper is to identify and analyse how different ways of organising transport

and logistics activities in construction impact on efficiency. The paper scrutinises three particular transport

and logistics configurations: the de-centra lised coordinated configuration, the on-site co ordinated

configuration and the supply network coordinated configuration.

Design/methodology/approach –Three configurations are derived from the literature and from case

studies. The efficiency of the three configurations is analysed on three levels of analysis: the construction site,

the supply chain, and across supply chains and construction sites.

Findings –The paper concludes that there are possibilities to enhance efficiency on all three levels of

analysis by widening the scope of coordination beyond the individual construction site.

Practical implications –The analysis points to efficiency potentials in applying the supply network

coordinated configuration, although this configuration puts high demands on collaboration amongst the

actors involved.

Originality/value –The paper provides illustration, and explanation, of the efficiency potentials involved in

the three configurations.

Keywords Europe, Supply chain integration, Buyer–supplier relationships, Logistics cost,

Sourcing and supply, Supply chain processes, Qualitative interviews, Outsourcing–insourcing

Paper type Research paper

Introduction

This paper deals with transport and logistics activities in the construction industry. The

transport activities related to individual constructionsites are extensive; for example, a large

constructionproject may involve around 100,000deliveries in a 12–18 months period. In total,

a vast number of transports are related to the construction industry. In Sweden, one-third of

the 79,000 heavy vehicles operating on the Swedish roads are engaged in transport to and

from construction sites and 20 per cent of the total greenhouse emissions in Sweden stems

from the construction industry (Sveriges Byggindustrier, 2010). Transport and logistics

activities also represent a substantial share of total costs in the construction industry. It is

estimated that well-planned transport and logistics can reduce total construction costs with

about 20 per cent (Sveriges Byggindustrier, 2010; Lindén and Josephson, 2013). A study of

supply chains directed to a construction project revealed that for one type of goods the

logistics costs accounted for more than 60 per cent of the purchase price, whereas for two

other types of goods the share was between 25 and 30 per cent (Wegelius-Lehtonen, 2001).

Hence, transport and logistics efficiency in construction is a key issue from a cost point of

view: “a small percentage cut in transportation costs couldbring a sizable increase in profits”

(Ying et al.,2018, p. 1921). Consequently, the interestfor lowering costs by addressinglogistics

has increased over the years (Polat et al., 2006; Said and El-Rayes, 2011).

Numerous studies claim that the construction industry suffers from poor performance

and efficiency (e.g. Fearne and Fowler, 2006; Fulford and Standing, 2014; Agarwal et al.,

2016). Some studies suggest that the organising of the construction industry, characterised

The International Journal of

Logistics Management

Vol. 30 No. 2, 2019

pp. 620-640

© Emerald PublishingLimited

0957-4093

DOI 10.1108/IJLM-12-2017-0325

Received 1 December 2017

Revised 2 July 2018

12 October 2018

Accepted 25 November 2018

The current issue and full text archive of this journal is available on Emerald Insight at:

www.emeraldinsight.com/0957-4093.htm

620

IJLM

30,2

by fragmentation, project focus and separation of design and production phases, is the root

of the efficiency problem (e.g. Love et al., 2004; Bankvall et al., 2010; Karrbom Gustavsson

and Hallin, 2015). Other researchers identify the construction supply chain as the main

cause of poor performance, with problems such as adversarial relationships, lack of

communication and information exchange (Palaneeswaran and Kumaraswamy, 2003; Xue

et al., 2005). For example, Thunberg and Persson (2014) found that less than 40 per cent of

the deliveries to construction sites arrive in the right amount, on the right time, at the right

location and without damages. The construction industry has also been slow to embrace

emerging digital technologies (Agarwal et al., 2016). Still another problem is related to

measuring logistics performance since “with the logistics cost embodied in material cost,

there is no easy way of identifying how much cost is attributed to inefficient logistics”

(Ying et al., 2018, pp. 1921-1922). Finally, construction logistics is even more challenging

when construction sites are situated in dense urban areas with various restrictions posed by

different stakeholders (Spillane and Oyedele, 2017).

Consequently, efficiency improvement in the construction industry has been considered

an industrial, as well as a societal, concern for a long time. Supply chain management,

including partnering, lean construction and agile strategies, as well as changes in supply

chain structures and supply chain integration, has been identified as a way to increase

efficiency in the construction industry (Vrijhoef and Koskela, 2000; Briscoe and Dainty,

2005; Gosling and Naim, 2009). Moreover, Ying et al. (2018, p. 1922) argue that a “sensible

division of logistics functions for a construction site is to divide them into supply logistics

and site logistics”and that materials delivery “on site is the interface of supply logistics and

site logistics”. Furthermore, there are various techniques and strategies for supply logistics

reported in the literature, e.g. just-in-time delivery, pre-fabrication, pre-assembly, as well as

for site logistics such as material routing (Spillane and Oyedele, 2017).

Vrijhoef and Koskela (2000) discuss four roles of supply chain management in

construction regarding the supply chain of a contractor: focus on the interface between the

supply chain and the construction site, focus on the supply chain (ending at the

constructions site), focus on transferring activities from the construction site to the supply

chain and focus on the integrated management of the supply chain and the construction site.

Each of these roles, or scopes of managerial focus, points at some of the options of framing

the challenges involved in coordinating activities in supply chains relating to construction

sites and thereby also various scopes with regard to efficiency.

In line with the fourth role, Fadiya et al. (2015) point to the fact that linking supply

logistics (including activities such as specifications, acquisition, transport and delivery of

materials to the construction site) and site logistics (including physical flow planning and

logistics organising on the construction site) is key to accomplish integration in construction

supply chains. Similarly, Ying et al. (2014, p. 262) argue that the efficiency and effectiveness

of a construction project “heavily depend on coordination of the on-site and external

logistics”. Hence, the integration of the construction site with the supply chains ending at

the site is a key issue.

However, this integration is considered to be problematic (Briscoe and Dainty, 2005). The

fragmented structure with a large number of specialised actors undertaking various

activities, together with the project-based nature of the construction industry, entails

challenges. One major obstacle in the efficient management of logistics and transport

stems from that contractors and subcontractors often manage their own supply chains

independently from each other. Ying et al. (2018, p. 1931) note that: “[…] major players, such

as main contractors, subcontractors, and material suppliers, look at the logistics process

from their own point of view”. Tensions amongst the actors arise as a consequence of that

each actor follows its “best”logic of coordination. Consequently, the total set of logistics and

transport activities in relation to construction suffers from lack of joint coordination.

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Organising

logistics and

transport

activities