Unit 4 �The Construction Environment

Dr Adewale Abimbola, FHEA, GMICE.

www.edulibrary.co.uk

Aim and Objectives

Aim: Supply Chain in Construction.

Objectives: At the end of the lesson, the students should be able to:

• Explain supply chain sustainability.
• Explore how the construction industry reflects supply chain sustainability.
• Perform inventory optimisation techniques: safety stocks and reorder point.

Learning Outcome and Assessment Criteria

• P3 Explain the different types of sustainability and how the construction industry is reflected in these.

Supply Chain in Construction

Key Components of Construction Supply Chain

Designers and Architects:

Contributing to the early stages of the supply chain by specifying materials and design requirements.

Contractors and Subcontractors:

Professionals involved in the physical construction, assembly, and installation of structures.

Suppliers and Manufacturers:

Providers of materials and components essential for construction projects.

Logistics and Transportation:

Ensuring the timely and cost-effective movement of materials to and from construction sites.

Categories of Suppliers

Table 1. Categories of suppliers (Department for Business, Innovation and Skills, 2013).

Categories of Suppliers

Table 1. Categories of suppliers (Department for Business, Innovation and Skills, 2013).

Importance of a Robust Supply Chain

• Efficiency and Timeliness:

A robust supply chain ensures the efficient flow of materials, reducing delays and contributing to timely project completion.

• Cost Savings:

Well-managed supply chains optimise costs through effective procurement, reducing overall project expenses.

• Resource Allocation:

Efficient supply chains enable effective allocation of resources, ensuring that materials and equipment are available when and where needed.

• Mitigation of Disruptions:

Robust supply chains are resilient to disruptions, minimising the impact of unforeseen events such as natural disasters or global market fluctuations.

• Quality Assurance:

Reliable suppliers and a well-established supply chain contribute to the consistent quality of materials, reducing defects and rework.

• Customer Satisfaction:

Meeting project timelines and delivering high-quality results enhance customer satisfaction, leading to positive relationships and repeat business.

Importance of a Robust Supply Chain

• Risk Management:

A robust supply chain includes risk mitigation strategies, such as alternative sourcing and contingency plans, reducing the impact of uncertainties.

• Competitive Advantage:

Companies with strong supply chains are more competitive, as they can respond quickly to market changes and offer competitive pricing.

• Visibility and Transparency:

Supply chain visibility and transparency enhance control over processes, allowing for better decision-making and accountability.

• Flexibility in Project Scope:

A well-managed supply chain allows for flexibility in project scope, enabling adjustments without significant disruptions.

• Regulatory Compliance:

Adherence to regulations and standards in the supply chain ensures legal compliance, reducing the risk of penalties and legal issues.

• Stakeholder Collaboration:

A robust supply chain encourages collaboration among stakeholders, fostering strong partnerships and effective communication.

Supply Chain Sustainability

Sustainable Supply Chain Practices

Material Selection:

• Choose environmentally friendly and sustainable materials with lower carbon footprints, recycled content, and certifications such as Forest Stewardship Council (FSC) for wood.

Ethical Labour Practices:

• Ensure fair and ethical labour practices throughout the supply chain, including fair wages, safe working conditions, and adherence to labour standards.

Life Cycle Assessment (LCA):

• Conduct life cycle assessments to evaluate the environmental impact of materials and products from extraction to disposal, guiding sustainable choices.

Energy Efficiency:

• Prioritise energy-efficient materials and components, such as energy-efficient windows and insulation, to reduce the overall energy consumption of buildings.

Green Building Certifications:

• Seek certifications like LEED (Leadership in Energy and Environmental Design) or BREEAM (Building Research Establishment Environmental Assessment Method) to ensure adherence to sustainable construction standards.

BIM (Building Information Modelling):

• Utilise BIM technology for efficient project planning and design, enabling better visualisation and coordination, reducing material waste, and improving energy efficiency.

Sustainable Supply Chain Practices

Local Sourcing:

Use locally sourced materials to reduce transportation-related emissions and support local economies.

Circular Economy Practices:

Embrace circular economy principles by designing products and systems that prioritise reuse, refurbishment, and recycling over disposal.

Education and Training:

Provide education and training programs for workers and stakeholders on sustainable construction practices to foster a culture of environmental responsibility.

Occupant Health and Well-being:

Consider the health and well-being of building occupants by using materials with low volatile organic compound (VOC) emissions and promoting indoor air quality.

Group-assessment Task

You are the project manager for a new visitor centre being built in Snowdonia National Park, Wales. The remote location and sensitive environmental context present unique challenges for supply chain management. As the project manager, outline your immediate response to mitigate the issue and a long-term strategy to prevent similar problems in future projects:

GROUP A

1. Logistical issues: The narrow, winding roads in Snowdonia are causing delays in material deliveries to the construction site.
2. Subcontractor management: Coordinating multiple local and national subcontractors with their individual supply chains is proving difficult in the remote location.
3. Supplier delays: Your Welsh slate supplier is experiencing production issues, potentially disrupting your roofing schedule.
4. Global disruptions: The ongoing effects of the COVID-19 pandemic are causing shortages of certain building materials across the UK.

GROUP B

1. Material shortages: Recent floods in North Wales have affected local quarries, causing a shortage of aggregates needed for concrete production.
2. Weather-related challenges: Frequent rain and occasional snow in Snowdonia are affecting material transportation and on-site storage.
3. Inventory management: Limited on-site storage space is making it challenging to maintain optimal inventory levels without risking shortages or excess stock.
4. Sustainable sourcing: The National Park Authority requires the use of eco-friendly and locally sourced materials wherever possible, but these are often more expensive or difficult to obtain.

Carbon Reduction Plan (CRP)

Supplier Sustainability Assessment:

• Assess the sustainability practices of suppliers and subcontractors, through the use of CRP to ensure alignment with environmental and social responsibility criteria.
• CRP - used by the bidders to :
• Show their greenhouse gas emissions in the UK.
• Confirm commitment to achieving net zero by 2050.
• Environmental management measures

(Johnson, 2021).

CRP sample/template.

CRP Balfour Beatty 2023; 2024

Scope 1 covers direct emissions from owned or controlled sources. E.g. fuel combustion, company vehicles, fugitive emissions.

Scope 2 covers indirect emissions from the generation of purchased electricity, steam, heating and cooling consumed by the reporting company. Such as, electricity for heating and cooling buildings.

Scope 3 includes all other indirect emissions that occur in a company's value chain. E.g. employee commuting, business travel, waste disposal, leased assets and franchises, transportation and distribution.

(Carbon Trust, 2021).

Just in Time deliveries (JIT)

• Just in time (JIT) delivery, or just in time logistics is defined as receiving raw materials, products and parts in the factory and then on site as they are needed, rather than days or even weeks before.
• In the 1960s many of the industrialised prefabrication systems relied on components being delivered to site and incorporated into the construction on arrival or within a few hours.
• Most concrete is also delivered on the JIT principle. Another example is windows or glazed cladding panels, where on-site storage would necessitate extensive inventory facilities and potential risks of product damage (Designing Buildings Ltd., 2021b).
• It is debatable whether or not the construction industry could go totally to JIT, because of uncontrollable factors when working outside, like the weather and finding the unexpected when working in the ground.
• https://www.youtube.com/watch?v=zCTmN17ZDek
• Benefits:
• Reduce waste, reduce need for large storage areas/facilities, and improved responsiveness to project changes.

Inventory Optimisation

• Develop a method for convenient, timely, and incremental material deliveries.
• Prevent work interruptions for material handling.
• Aim for efficient material storage and handling to enhance workflow.

Automated Inventory Management System

How To Set Up A Barcode System | inFlow Inventory software

Safety Stock

Z-score MS Excel formula = NORMSINV()

Worked Example 1:

A project manager records the daily use of A4 photocopier paper in a month (Table 1). She has determined that the lead time is 3 days and the service level is 95% (This means the safety stock levels will cover for 95% of all probable requests).

Determine the safety stock; the additional quantity held in inventory to mitigate the risk of a stockout.

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Safety Stock

Safety Stock

• It represents the minimum stock level required to prevent stockouts and maintain order fulfilment.
• When inventory reaches this point, it initiates the replenishment process for that item.
• Aims to sustain inventory at a level sufficient to meet customer demand without excessive surplus.
• Crucial for determining the necessary safety stock to buffer against unexpected demand spikes.

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Reorder Point

Worked Example 2:

A project manager records the daily use of A4 photocopier paper in a month (Table 1). She has determined that the lead time is 3 days and the service level is 95% (This means the safety stock levels will cover for 95% of all probable requests).

Determine the reorder point to avoid running out of stock.

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Reorder Point

Reorder Point

Self-assessment Task 1

A site supervisor monitors the daily consumption of concrete blocks on a construction site over a month (Table 1). After establishing a lead time of 5 days and a service level of 92%, calculate the safety stock and reorder point.

Note: Use the MS Excel to complete this task.

Self-assessment Task 2

A civil engineering firm is managing the construction of a major bridge project. The project requires careful management of specialised materials such as high-strength steel cables, pre-stressed concrete beams, and custom-designed expansion joints.

Given parameters:

• Lead time for steel cables: 12 weeks

• Service level: 98%

Calculate the safety stock and reorder point.

Note: Use the MS Excel to complete this task.

Trends in Construction Supply Chain

Challenges in Construction Supply Chain

Dependency on External Factors:

External factors like weather, global events, and economic changes can impact the supply chain.

Communication Gaps:

Miscommunication between stakeholders can lead to delays and inefficiencies.

Risk Management:

Identifying and managing risks, such as supply chain disruptions or material shortages.

Supply Chain in Construction - Risk Mitigation and Contingency Planning

Assignment

• Explain supply chain sustainability.
• Explore at least any THREE ways of how the construction industry reflects supply chain sustainability.

References/Bibliography

• Adetunji, I., Price, A., and Fleming P. (2008) ‘Achieving sustainability in the construction supply chain’, Proceeding of the Institution of Civil Engineers, ES3, pp. 161 – 172. doi: 10.1680/ensu.2008.161.3.161
• Canter, M. R. (1993) Resource management for construction. London: Macmillan Press Ltd.
• Carbon Trust (2021) Briefing: what are scope 3 emissions? Available at: https://www.carbontrust.com/resources/briefing-what-are-scope-3-emissions (Accessed: 25 September 2021)
• Construction News (2020) Sustainability starts with the supply. Available at: https://www.constructionnews.co.uk/sustainability/sustainability-starts-with-the-supply-chain-13-01-2020/ (Accessed: 18 September 2021)
• Department for Business, Innovation and Skills (2013). Supply chain analysis into the construction industry - a report for the construction industrial strategy. Available at: https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/252026/bis-13-1168-supply-chain-analysis-into-the-construction-industry-report-for-the-construction-industrial-strategy.pdf (Accessed: 17 September 2021)
• Designing Buildings Ltd. (2021a) Suppliers and design and construction. Available at: https://www.designingbuildings.co.uk/wiki/Suppliers_for_design_and_construction (Accessed: 17 September 2021)
• Designing Buildings Ltd. (2021b) Just in time. Available at: https://www.designingbuildings.co.uk/wiki/Just_in_time (Accessed: 11 October 2023)

References/Bibliography

• Hans, R. (2024) What is inventory reorder point in inventory management? Available at: https://www.deskera.com/blog/inventory-reorder-point/ (Accessed: 01 March 2024).
• Henry, R. (2019) Full Guide to Reorder Point (ROP): Definition, Formula & Calculator. Available at: https://www.extensiv.com/blog/reorder-point-safety-stock (Accessed: 01 March 2024).
• Johnson, L. (2021) Carbon reduction plans: what civil engineers need to know. Available at: https://www.newcivilengineer.com/latest/carbon-reduction-plans-what-civil-engineers-need-to-know-26-08-2021/ (Accessed: 18 September 2021)
• March, C. (2009) Operations management for construction. London: Spons Press.
• Pearson (2017) BTEC national construction student book. London: Pearson.
• SITMI Academy (2023) Safety stock | reorder point rop | economic order quantity eoq | min max levels calculation in excel. Available at: https://www.youtube.com/watch?v=pypb4WOOLFI&t=938s (Accessed: 01 March 2024).
• Thieuleux, E. (2022) Safety stock formula & calculation: the 6 best methods. Available at: https://abcsupplychain.com/safety-stock-formula-calculation/#:~:text=To%20get%20the%20safety%20stock,of%20the%20lead%20time%20L.&text=We%20get%20a%20Safety%20Stock,reorder%20point%20of%201345%20pieces. (Accessed: 01 March 2024).