University of Salford Global Supply Chain Management: Construction Industry
Influence of the Current Challenges in the Construction Industry’s Supply Chain
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2.0 Influence of the Current Challenges in the Construction Industry’s Supply Chain2.1 Primary Challenges affecting Construction Industry’s Supply ChainConstruction industry plays a crucial role in global economies, contributing to infrastructure development, job creation and economic expansion. Effective supply chain management in this industry is particularly complex given the involvement of multiple stakeholders with extensive material requirements and precise project timelines (Shaikh et al. 2020). Figure 1 depicts this supply chain's key steps: project planning/design followed by procurement/coordination/assembly and final project delivery. Figure 1 Typical Supply Chain Model within the Construction Industry (Butkovic, Kauric and Mikulic, 2016) The COVID-19 pandemic and Ukraine-Russia war have both presented major supply chain disruptions that require action from construction industry professionals to adapt quickly and remain resilient in order to remain effective. Such events have underscored the necessity of resilient supply chain management strategies. Thunberg et al. (2017) report that construction industry faces three main supply chain-impacting obstacles. First are regulatory and permitting hurdles; these create unnecessary difficulties that hinder its supply chain operations. Complex regulatory processes can extend project timelines and increase costs (Tennant and Fernie, 2014). As is often the case as indicated by the authors, obtaining permits for construction projects involves navigating complex layers of bureaucracy, environmental assessments and compliance with various codes and regulations. Delays in receiving necessary approvals can cause supply chain interruptions compromising both materials delivery timelines as well as overall project schedule. Second, supply chain fragmentation and coordination issues are pervasive challenges in the construction industry (Thunberg et al., 2017). Given all the stakeholders involved such as contractors, subcontractors, suppliers, and consultants, it is imperative for seamless collaboration to take place. According to Riazi et al. (2020), fragmented supply chains may result in information asymmetry, communication gaps, inefficiency and project delays due to miscommunication. Therefore, streamlining supply chain processes as well as cultivating better communications among stakeholders can help alleviate these difficulties and reduce project delays significantly. Lastly, the construction industry often faces inventory management and logistical challenges (Thunberg et al., 2017). With large-scale construction projects requiring a wide range of materials, effective inventory management becomes crucial to avoid overstocking or stock-outs (Guluma, 2019). According to the author, poor inventory management can result in increased costs, project delays, and productivity losses. Additionally, managing logistics, including transportation and warehousing, poses challenges due to the nature of construction sites that are often located in remote or challenging locations. Efficient logistics planning and leveraging technology solutions can help optimize inventory levels, improve material flow, and enhance overall supply chain performance. Download 215.55 Kb. Share with your friends:
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