THE IMPLEMENTATION OF SUPPLY CHAIN MANAGEMENT TO THE CONSTRUCTION INDUSTRY

Abstract

The construction industry is fragmented by the nature of its operation and the mechanism of the market forces where enterprises are often “disconnected” from one another, operating independently with little or no synergy amongst them. Due to intense competition in the industry, the players are sceptical of sharing information or resources and therefore supply chain integration or management practices are difficult to implement in this industry. The main objective of this research, from a main contractor’s standpoint, is to promote the implementation of SCM practices for a radical improvement in the construction process. A literature review was conducted to gain in-depth understanding in this particular research field. A survey was conducted among 30 main contractors to determine the level of fragmentation in the local industry and the understanding of SCM among practitioners. The status of SCM implementation in contractors’ business practices is also being assessed. In addition, the factors affecting the implementation of SCM were identified. The analysis results established that the Singapore construction industry is highly fragmented, which promotes an adversarial culture among the industry. The implementation of SCM practices at company and project level is relatively low despite the common knowledge among contractors of what constitutes SCM and the values it brings to the industry. The top three factor categories influencing SCM implementation were namely, statutory requirement, project size and government subsidy. A change of mindset is needed to foster a robust culture of long term relationships or alliances throughout the supply chain on the basis of mutual interest for the successful implementation of SCM practices. There are three noteworthy limitations of this study: low response rate, profile of contractor firms and the exploration of SCM from a main contractor’s perspective.