1. Presented by: Engr. Sikandar Bilal Khattak Department of Industrial Engineering University of Engineering and Technology, Peshawar Assessment of Construction Industry from Supply Chain Perspective-Part-1

2. Outline Introduction to Construction Supply Chain Background Study Objectives Methodology Results and Discussion Conclusions Future Works 2

3. Introduction Construction Industry has significant impact on National Economy. 9.9 % of Gross Domestic Product (GDP) for developed countries Construction project often suffers and is evaluated in terms of Cost Overruns Time Delays Quality Defects Pakistan major budget portion is allocated to developmental projects. Roads, Bridges, and Hospital Etc; 3

4. Construction Supply Chain (CSC) Key participants for CSC are: Major Contractor ( Leading project team) Consultant (technical supervision from client side) Sub Contractor (Supports the major contractor) Client (Project initiator, End user) Major co-ordination take place between major contractor and client. 4

5. Construction Supply Chain Cont… Construction Supply Chain involves Material Supplies Workforce availability Skilled Unskilled Equipment supplies 5

6. Background Study Importance of supply chain management was realized in construction industry in early 1990s. Researchers emphasized on tailoring available supply chain models or proposing new conceptual models Table 1: Conceptual Models for Construction Supply Chain S.NoModelAuthor 1Contractual Relationship ModelCox 2Relationship Transition ModelSpekman 3Partnering LadderLi 4Supply chain maturity gridStrategic forum for construction 5Inter-organizational relationshipJones and Saad 6Assessment FrameworkXianhai Meng 6

7. Background Study Cont… In early 2000s research was carried out to identify the factors affecting CSC. Major emphasis on internal factors Trust, Communication, Problem Solving etc; Internal factors are controlled by project team and gets developed with time. Late 2000s quantification of these internal factors was carried out. Ranking Analysis of variance (ANOVA) Chi-square Arithmetic Mean, Weight Scoring Effect on project performance parameters (Cost, Quality, Time) Limited research carried out to identify external factors and assess their impact on the CSC. External factors cannot be controlled directly by project team. 7

8. Objective Identify and rank external factors which directly or indirectly effects the construction supply chain. 8

9. Methodology Internal and external factors primarily identified through comprehensive literature review Finalized in consultation with academic experts and construction practioners 10 internal factors and 20 external factors are selected Table 2 : Selected Internal Factors S.NoInternal FactorsS.NoInternal Factors 1Trust6Incentive Mechanism 2Communication7Pain and Gain Sharing 3Problem Solving8Performance Measurement 4Risk Allocation9Joint Working 5Continous Improvement10No Blame Culture 9

10. Methodology Cont… 20 External Factors are selected Table 3 : Selected External Factors S.NoExternal FactorsS.NoExternal Factors 1PC-111Low bid 2Funding12Weather conditions 3Procurement unit of contractor13Bureaucracy and political influence 4Management Team of contractor14Terrorism 5Communication Infrastructure15Regulatory Authorities 6Escalation of material prices16Government Policies 7Technical person availability17Inflation 8Cash flow18Financial Capabilities of Supplier 9Shortage of material/equipment19Law and Order situation 10Public Approval20Financial capabilities of contractor 10

11. Methodology Cont… A questionnaire was developed based on the internal and external factor in relation with project performance parameters Four Portions Respondent Credentials Company Information Internal and External Factors Individual weights on the scale of 0-10 Relation between internal and external factors 11 Figure 1: Research Methodology

12. Response Profile A questionnaire was distributed to 80 respondents of CA, CB, C1 and C2 category contractors of KPK. By Email By Mail By hand One third of respondents have replied. Few consent from construction practioners were taken via call. 12

13. Results and Discussion Simple arithmetic mean was calculated for the weights and were ranked on the basis of mean Arithmetic Mean = ∑w/n Where ∑w = Summation of weights assigned n = Numbers of responses to that factors Few respondents skipped some factors so n is not the same for all the factors. 13

14. Results and Discussion Among 20 external factors top 3 factors affecting CSC are Terrorism Weather Condition Financial Capabilities of Supplier 14 Figure 2: Bar chart for Top 3 factors with weight mean

15. Results and Discussion Cont… Terrorism Not only Human Loss but Supply routes Technical and non-technical staff is killed or kidnapped Security Clearance For equipment shipped from international market For Skilled labor Stone shortage Unavailability of explosives Military operations 15

16. Results and Discussion Cont… Weather Condition Natural disasters damages the supply routes more than terrorism. Intermediate work is flooded away Equipments are damaged Response shows bad weather affects project more in term of time. 16

17. Results and Discussion Supplier financial capabilities Supplier drop out mainly of finances, quality aspect is on the lighter side. Frustration of suppliers Time delays Terrorist activities Lead time Legal obligations 17

18. Conclusion CSC consists of four participants CSC mainly driven by major contractor Internal factors are developed over a period of time within project team External factors are beyond the control of project team but affects the over all project performance. Proper management on part of government and contractor can reduce the effect of external factors 18

19. Future Work CSC model consisting of external factors Analytical Hierarchy Process (AHP) and Analytical Network Process (ANP) to quantify the and rank both internal and external factors Relationship between external and internal factors Quantify effect of external factors on time, cost and quality of a construction project. 19

20. Thank You ? 20