Construction Supply Chain Modeling: Issues and Perspectives (Part 1) Scott J. Mason, Ph.D. Fluor Endowed Chair in Supply Chain Optimization and Logistics Professor of Industrial Engineering

Supply chain defined (yet again) Overview Supply chain defined (yet again) “an association of customers and suppliers who, working together yet in their own best interests, buy, convert, distribute, and sell goods and services among themselves resulting in the creation of a specific end product.” SC stages Raw material suppliers Component suppliers Manufacturers Distributors Customers Scott J. Mason, mason@clemson.edu

Example Supply Chain Structure Scott J. Mason, mason@clemson.edu

Capital Project Supply Chains Large capital projects involve sourcing materials, equipment, and subcontracted services from multiple countries Most projects are driven by some combination of cost and schedule requirements Execution methodologies vary by industry, sector, and client Sales Design Supplier Collaboration Material Suppliers Engineered Equipment Sub-contractors Supplier Evaluation and Selection Logistics Receiving & Warehousing Operations & Maintenance Purchasing SQS Expediting Client Input / Requirements

Responsive vs. Efficient Responsive SCs Able to deal with wide range of quantities demanded Can meet short lead times Can handle large product variety Meet very high service level requirements Handle supply uncertainty So why be anything else? Cost! Efficient SCs are cost-effective Scott J. Mason, mason@clemson.edu

Comparing These Two Supply Chains Scott J. Mason, mason@clemson.edu

A Representative Capital Project Project Location Critical Equipment Suppliers Commodity Equipment Suppliers

Hierarchical Decision Framework Strategic Long term SC configuration, location, capacities, warehousing Tactical Period of time (quarters) Inventory control, production and distribution coordination, material handling, order/freight consolidation Operational Weekly or daily Workforce scheduling, vehicle routing, scheduling, replenishment, packaging Scott J. Mason, mason@clemson.edu

Construction Supply Chains Early 1990s How can manufacturing concepts be transferred to construction context to reduce project costs “However, construction industry characteristics differ substantially from the manufacturing SCs” Big Myth, anyone?  Scott J. Mason, mason@clemson.edu

Manufacturing vs. Construction SCs Scott J. Mason, mason@clemson.edu

Manufacturing vs. Construction SCs (2) Scott J. Mason, mason@clemson.edu

Page 2-10, First Full Paragraph Buffer, variability, and uncertainty are not yet common terms among experienced construction managers On-site production inefficiency caused by poor production planning Limited planning concerning the impact of off-site production and delivery variability Keep large amounts of inventory on job sites to reduce risk of delays on production Sound familiar?  Scott J. Mason, mason@clemson.edu

A Construction SC Concept Construction SCs are composed of multiple SCs, each with specific behaviors Scott J. Mason, mason@clemson.edu