Walsh, K D; Hershauer, J C; Tommelein, I D and Walsh, T A (2004) Strategic positioning of inventory to match demand in a capital projects supply chain. Journal of Construction Engineering and Management, 130(6), pp. 818-826. ISSN 0733-9364
Abstract
Industrial buyers of capital facilities have experienced and continue to experience pressure to reduce facility design and construction lead time. This pressure arises both internally (due to successes in manufacturing lead time reductions) and externally (due to competitive forces including narrowing product delivery windows). This paper presents a case study detailing one owner's efforts to reduce the length and variability of delivery time for long-lead construction materials in order to improve overall project lead time. The owner adopted a long-term multiproject perspective, procuring material in advance of specific projects and holding it at a position in the supply chain selected to allow flexibility for customization. Reduction in lead time of 75% from order to delivery of the material resulted for individual projects within the owner's capital plan. As a result, the material was available at the construction site well in advance of its need for erection. To study if holding material at alternative locations in the supply chain could provide a better match between delivery quantities and the demand for erection, the supply chain was simulated. In this case study, demand information was imprecise, allowing only the quantity of material delivered to be considered rather than matching specific items to specific locations. Nonetheless, the results demonstrate the utility of simulation in the capital projects supply chain and the value of improving demand forecasts.
| Item Type: | Article |
|---|---|
| Uncontrolled Keywords: | construction management; inventories; project management; simulation |
| Index terms: | customization, inventory, case study, owner, construction material, capital project, delivery time, design and construction, lead time, project management, variability, construction site, window, product delivery |
| Subjects: | contractual arrangements, product delivery, strategic project management, construction manufacturing, work location, building materials, data collection methods, statistical analysis, time analysis, project controls, sociology, inventory management, project management theory and practice, architectural elements |
| Topics: | Procurement, Stakeholder Management, Research Practice, Project Management, Engineering Principles, Business Strategy, Time Control, Site Management, Supply Chain Management, Design Practice |
| Descriptive scope: | 3 PCE |
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