Amílcar Arantes

Logistic costs case study—an ABC approach

Activity based costing (ABC) represents a radical departure from the traditional cost accounting systems. The ABC methodology, rather than allocating costs to individual units, identifies the activities that consume resources, matching costs to the level of such activities. The key aspect of this methodology is the development of the models that represent a logical and quantifiable relationship between the utilisation of resources, the performance of activities, and the products or services that they provide. With these models one can simultaneously mirror the flow of orders and products along the logistic chain, capturing the costs at a level of desegregation that enables the analysis of profit by type of client, market segment and distribution channel. This application of ABC costing to a logistic operator illustrates the main difficulties and benefits of this approach.

Development of a purchasing portfolio model for the construction industry: an empirical study

Purchasing is one of the core activities of most industries and performance in this area directly impacts the overall performance of a company. The purchasing portfolio model used in this paper, based on the Kraljic approach, assumes a relevant role in defining purchasing strategies, although its application in the construction industry has been limited or undocumented. This research is exploratory in nature, with the methodology based on action research combined with a single empirical study in a large Portuguese multinational construction company. The AHP technique was used for criteria prioritisation in both dimensions and direct measurement employed for rating construction item classes. A multidimensional scaling approach was employed to place the items in the purchasing portfolio matrix. Through the development for, and application of the model to a construction company, this study aims to contribute to expanding the domain of applicability of purchasing portfolio models. The results of the application confirmed the value of the model in helping to define construction company purchasing strategy and gave guidelines for its application.

Is the construction industry aware of supply chain management? The Portuguese contractors’ perspective

Purpose – The purpose of this paper is to evaluate the understanding and behaviour of construction companies in relation to supply chain management (SCM) and how those relationships can impact the adoption of the SCM concept. Design/methodology/approach – This paper adopted a descriptive study method based on a cross-section survey. A literature review and focus group interviews were used to design the survey questionnaire. The focus group interviews were also used to discuss the results of the survey and draw conclusions. Findings – The results show that the global awareness level of SCM and the relationships level among the entities in the Portuguese construction industry are low, which is in alignment with previous research work. These results also show that SCM in the construction industry is a complex task due to the fact that the relationships between the entities are different, and also often contractors and subcontractors change roles from project-to-project. Research limitations/implications – Th...

Application of a Purchasing Portfolio Model in a Construction Company in Two Distinct Markets

The Kraljic purchasing portfolio matrix (KPM), which is based on the dimensions of strategic impact (SI) and supply market complexity (SMC), is a valuable instrument for defining purchasing strategies. This paper combines action research with a single case study to apply the KPM, which was developed at the head offices of a multinational construction company, in two branches located in markets with different characteristics. The application makes use of analytical hierarchical process techniques for criteria prioritization and employs direct measurement for criterion rating and multidimensional scaling to pinpoint the items in the KPM. The results, on one hand, confirm KPM as a valuable tool to support the development of purchasing strategies in the construction industry; on the other hand, they align with the expected behavior of a company in emerging markets, which tend to be more conservative than more mature markets in relation to supply risk management.

Delays in construction projects - causes and impacts

The main aim of this paper is to identify the main causes for the delays in the Portuguese construction industry and its impact, with the purpose of increasing knowledge on the causes and impacts of delays in construction projects. The Relative Importance Index was adopted to classify the importance of the 47 causes and six impacts identified causes of delays. Results show the main causes of delay are slow decision-making, changes to orders, unrealistic timescales and poor contract specifications, financial constraints on the contractor and the type of bidding and contract award process. The main impacts are time and cost overruns and disputes. Factor analysis revealed eight high-level causes that result in 26 of the original causes. Finally, Pearson correlation coefficients were calculated to find the relationship between the extracted factors (latent causes) and impacts, revealing that lack of commitment and substandard contracts are positively correlated with all impacts, and poor consultant performance is negatively correlated with time overrun. These findings are expected to improve the scientific communitys knowledge of construction management.

Discontinued Products - An Empirical Study of Service Parts Management.

The procurement and inventory management of service parts for discontinued products has often been overlooked by companies, resulting in several problems such as stock outs, rush orders or obsolete stocks. Accordingly, the main aim of this work is to develop a methodology to deal with these issues following product discontinuation. To this end, an empirical study – based on action research principles – was carried out in a producer of household appliances, which is bound by law to provide service parts for its products for a period of 15 years after they have been discontinued. The work was developed in three stages: characterization of the company situation; definition of a procedure to eliminate obsolete stocks; and definition of a procedure to manage active service parts. The resulting methodology and respective procedures are presented and the results obtained with the implementation are discussed.

Survey of Reverse Logistics Practices - The Case of Portugal.

Reverse Logistics (RL) has gained substantial relevance in the field of supply chain management, mainly because RL combines environmental, economic and social factors. Although there are studies on RL practices, none of these studies are related to the Portuguese case. Therefore, a survey was conducted in Portugal to fill this gap. This study was applied to a group of Portuguese companies of four industrial sectors. These four sectors are highly diversified, regarding the way RL is managed. The results demonstrate that companies consider the management of RL important. The most common practice used is the proper disposal of returned products. The companies mainly adopt RL due to the benefits associated with the improvement of customer satisfaction and the reduction in logistics costs. The biggest barrier to the implementation of RL is a lack of strategic planning by the companies on handling returned products. The main reason affecting the performance of RL activities is the lack of quality of the returned product. The study also allowed to estimate the volume of returned products and the costs of RL.

Causes of Delays in Portuguese Construction Projects

Delays are frequent in engineering and construction projects all over the world. Delays can have severe impacts, such as time and cost overruns and conflicts between stakeholders, and can also lead to total abandonment of the contract. This paper presents the findings of a survey conducted to identify the most important causes of delays in the Portuguese construction industry. Among the respondents were representatives from all stakeholders involved: contractors, consultants and developers. The Relative Importance Index was adopted to classify the relative importance of the 46 identified causes of the delays. The results show that the main causes of delay were slow decision making by developers, change orders, unrealistic contract duration and specifications in contracts, financial constraints on the contractor and the type of bidding and award of contract process. Additionally, factor analysis revealed eight high-level causes that aggregate 30 of the original causes. These findings are expected to contribute to expanding the knowledge in the scientific community of construction management, in particular in the field of supply chain management, and helping the Portuguese industry in the reduction and prevention of delays in construction projects.

Proposal of a Framework to Assess the Supply Chain Performance in the Agri-food Sector

Companies need to excel in many areas to achieve a competitive advantage. Supply chain management is critical for a companys overall performance. It is therefore crucial that organizations measure the performance of their supply chains in order to define strategies that contribute to maximize the impact of their operations. This paper aims to propose a novel framework for assessing and monitoring the supply chain performance of companies of the agri-food sector. The framework consists of six steps to evaluate the companies supply chain performance. The linear aggregation technique is suggested to aggregate indicators into a unique value giving rise to a composite index considering five dimensions. The proposed framework can be used as a valuable instrument for the monitoring of supply chain performance of agri-food

Proposal of an SKU Classification Framework - A Multicriteria Approach

Changes to an organization’s internal and external environment may cause an increase in the number of Stock Keeping Units (SKU) in inventory. Therefore an SKU classification and corresponding grouping become highly important for improving the inventory management process. In this paper we propose a framework for SKU classification in an industrial context using a multicriteria approach considering three criteria: value of usage; criticality and demand variability. This approach emphasizes the importance of SKUs that despite their small value are of vital importance for the operations/production of the organization.