SCM and extended integration at the lower tiers of the construction supply chain: An explorative study in the Dutch construction industry

Several studies have underlined the potential of Supply Chain Management (SCM) in meeting the formidable challenges associated with fragmentation, adversarial relationships and insufficient customer focus in the delivery of construction projects (e.g. Dainty et al., 2001; Cox and Ireland, 2002; Gadde and Dubois, 2010). However, there remains a paucity of properly documented examples of successfully implemented SCM initiatives, particularly at the lower tiers of the supply chain. This study sets out to explore the enablers and barriers to the implementation of SCM at the lower tiers of the supply chain, particularly the problematic collaboration between main contractors and subcontractors. A SCM Maturity Model is developed based on Holti et al.’s (2000) seven principles of SCM organisation. An explorative study is conducted based on interviews from eight large main contractor and subcontractor organisations in the Dutch construction industry. Discouragingly, across the organisations, more barriers than enablers to supply chain management are identified. Organisations are found to be particularly struggling to compete through superior value, manage costs collaboratively, and develop continuous improvement within their supply chains. The findings also underline the low SCM maturity of main contractors and their inability to play the essential role of supply chain managers. Indeed the principles of integrating project activities and mobilising and developing people are found to be better exercised by subcontractors. The study may highlight the need for a greater degree of contractor leadership and improved internal organisation of both types of firms in order to achieve greater collaboration at the lower tiers of the construction supply chain.

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