Global Logistics and Supply Chain Strategies - June 2008 - (Page 27) sees the construction industry focusing more on better validation of subcontractors and suppliers before they are taken on, and then monitoring performance of these partners on a regular basis. Every new supplier or subcontractor has to be validated as being both competent in its specialty and safe in its work history. While every project leader must painstakingly go through this validation process, the cost and time involved is making the whole industry look for ways to minimize the resources needed. “The cost and time of validation has become another reason for maintaining a small supply chain where you work with the same partners again and again,” says Cork. “When a new partner is needed, the plan is always to find one that has the profile to be a keeper.” There is also a trend toward centralized supplier validation. On a regional basis, the construction industry is creating organizations whose sole role is to validate suppliers and subcontractors. Such organizations benefit all parties. A small contractor with sales of $10m does not have the time or resources to go through a validation process with 20 prospective prime contractors. Rather than repeat the vetting process that other companies have already done, project owners much prefer relying on an independent body working on behalf of the whole industry to manage this process. “If a contractor is looking for a specific capability, the database is there for fast, easy review,” says Cork. Every project manager will have key performance metrics that it uses to measure and monitor its subcontractor and supplier over time, and such KPIs can be tracked with most of the newer integrated IT platforms. “The real value for such performance measurement is best used for benchmarking improvement, rather than as a punitive type of checklist,” says Cork. “By improving the performance of subcontractors and suppliers, the number of supply chain partners can be maintained, turnover reduced and overall risk minimized. Keeping track of 50 partners is also a lot easier than trying to monitor a list of 250 or more.” Risk on a project is also managed by having the right materials available. But managing material risks has been a longtime conflict between two operational strategies for large construction projects. On the one hand, a guiding principle has always been to avoid double handling of materials on a job site because of the waste of manpower and the increased likelihood of loss and damage to materials. “The term ‘just in time’ is not used in construction, but it is the same concept,” says Cork. “Materials should be delivered to the job site as close to when and where they are needed as possible.” At the same time, buyers on projects are always seeking the lowest price for materials, so there is an incentive to order full truckloads of bricks, blocks, insulation and other materials. But by taking delivery of volume quantities of building materials, there is always a problem in finding a place to put the goods, especially in a crowded city center site. The materials inevitably end up being moved two, three or more times during which time they get damaged. Consolidation centers are now the most popular approach to material risk management. This concept is being showcased with the massive Olympic projects getting under way in London, but it is becoming popular with many large projects. For big projects in the London area like the Olympics and Heathrow Airport Terminal Five, large deliveries are taken at what is a temporary distribution center relatively near the job site. As needed, small vehicles move manageable quantities of materials to exactly where they are needed. Even tradesmen’s tools can be stored centrally and delivered to the job site, so dozens of workers don’t have to park their vans at the job site. “In London, it is increasingly common for tradesmen to take public transportation to a construction project knowing that everything they need will be there when they arrive,” says Cork. “That level of coordination requires a tight supply chain, and a great deal of trust all the way down to the worker level.” As traffic and environmental concerns increasingly become issues for the construction industry, Cork sees the use of consolidation centers expanding because they reduce trips for heavy trucks in crowded city centers. “The double handling at first seems counterintuitive, but it has proven to be the Logistics Zen Carlile is a proven leader in multi-modal transportation and logistics solutions. Whether it’s a pallet of tools headed to Tacoma or a 100-ton module destined for Alaska’s North Slope, Carlile has the expertise, equipment and connections to deliver peace of mind, every time. www.carlile.biz l 1.800.323.2296 ROAD - RAIL - SEA - AIR ALASKA I HAWAII I UNITED STATES I CANADA GLOBAL LOGISTICS & SUPPLY CHAIN STRATEGIES 27 http://www.carlile.biz http://www.carlile.biz
For optimal viewing of this digital publication, please enable JavaScript and then refresh the page. If you would like to try to load the digital publication without using Flash Player detection, please click here.