Roger Flanagan

The changing role of builders merchants in the construction supply chain

Builders merchants are an integral part of the construction industry, yet rarely are they consulted when discussions take place on the future of the construction industry. Throughout history, builders merchants have played a dominant role in the construction industry, initially as an intermediary between the artisan and the buyer, and more recently as a source of working capital for contracting firms. The merchanting industry currently is undergoing considerable change. The depressed construction market and the failure of the housing repair and maintenance sector to recover in the first half of the 1990s as activity in the private non-housing repair and maintenance sector has increased, has raised competition between merchants. The major building merchants are becoming larger by acquisition and merger, the smaller merchants are seeking niche areas, and the medium-size firms are under serious threat from acquisition by the larger merchanting firms. The trend towards consolidation in the sector, driven by the need to reduce costs, has meant that the large merchanting firms now control around 60% of the building materials market sales. Factoring is a growing trend, particularly with smaller companies sourcing goods from the cheapest source. The larger merchants have to respond by sourcing goods from the lowest cost base, irrespective of whether they buy from overseas markets. This paper analyses the UK builders merchants sector and evaluates the important role played in the supply chain.

The role of logistics in the materials flow control process

Frequently, the supply of building materials to the construction site is fraught with difficulties which can have a significant effect on productivity. Major productivity gains are possible, particularly if the building process is planned from a logistics perspective. The concept of logistics was developed initially within the manufacturing industry, and now constitutes an important management tool to ensure an overall strategic perspective on the flow of materials in the production process. This paper contends that logistics are relevant also to the construction industry, and describes the development of a logistics model to manage the flow of materials from suppliers to installation on-site and its application to a Danish house building project. The case study evidence suggests that the primary focus of the logistics concept in construction is to improve coordination and communication between project participants during the design and construction phases, particularly in the materials flow control process. The logistics concept requires accurate scheduling of materials to programmed delivery dates keyed to actual site layout and storage arrangements. The logistics approach also involves a new role for materials suppliers, including early involvement in the design phase and overall responsibility for the flow of information relating to materials.

Competitiveness in construction: a critical review of research

Since its popularization in the 1980s, competitiveness has received close attention from practitioners and researchers across a wide range of industries. In the construction sector, many works on competitiveness have also been published. So far, however, there seems to be no comprehensive review to summarize and critique existing research on competitiveness in construction. This research, therefore, reviews the extant literature from four aspects: concept of competitiveness, competitiveness research at the construction industry level, competitiveness research at the firm level, and competitiveness research at the project level. The review presents the state‐of‐the‐art development of competitiveness research in construction, identifies the research gaps, and proposes new directions for further studies. Further research is recommended to validate previous studies in construction practices, identify the mechanisms that encourage mutual enhancement of competitiveness at different levels, and how to achieve its sustainability by embracing new management and/or economics techniques.

The accuracy and monitoring of quantity surveyors' price forecasting for building work

This paper examines the performance of two public sector quantity surveying departments when forecasting the lowest tender price for proposed projects at the design stage. The reliability of any price forecast is dependent upon professional skill and judgement and the availability of historical price data derived from completed projects. The quantity surveyor also requires an effective feedback mechanism that provides information on the accuracy of previous forecasts. A simple feedback mechanism is developed in this paper which can be used to assess forecasting performance and give an early warning of bias and identify any patterns that may emerge.

Sealed bid auctions: an application to the building industry

This paper examines some of the theory and practice of competitive tendering in the building iildustry. Allocation of building contracts by means of competitive tendering is one type of sealed bid auction. T\vo main strands of the theory of sealed bid auctions are developed. The first strarul identifies optimal mark-up given that each tender competition occurs in isolution. The second strand treats explicitly the sequential nature of tendering and resource constraints of tenderers. It emerges that the first strand is a special case of the second. A simple optimal bid price rule is identijed, which indicates that bid price for any one contractor will be affected by theresources availuble to the contractor and general market conditions. It is shown that bid prices will be more competitive the better the information available to tenderers, the more carefully is the tender list constructed and the greater the number of firms invited to tender. It is further shown, however, that little is gained by having more...

A fuzzy stochastic technique for project selection

The comparison of two or more risky projects is more of a challenge than the evaluation of one project in isolation. In the numerous decision models and methods suggested in the literature, often it is assumed that the criteria as well as the decision makers preference or utility function can be crisply defined. Multi-attribute decision aids that permit the consideration of both multi-variables and risks generally have been associated with complex mathematics and heavy consumption of resources. This paper shows how project selection problems can be dealt with when some project attributes are subject to random variations. The method incorporates fuzzy analysis into multi-attribute utility theory. The aggregate utility function for an individual project is derived as a fuzzy number (or interval) which, in turn, yields probabilistic information for stochastic dominance tests. A unique feature of the approach is that it dispenses with the task of selecting probability distributions for aggregate utility functions. A comparison of the proposed method with the expected utility approach was made and the findings showed agreement between the results.

Understanding absorptive capacity in Malaysian small and medium sized (SME) construction companies

Purpose – The construction industry is a very important part of the Malaysian economy. The governments aim is to make the industry more productive, efficient and safe. Small to medium‐sized enterprises (SMEs) are at the core of the Malaysian construction industry and account for about 90 per cent of companies undertaking construction work. One of the main challenges faced by the Malaysian construction industry is the ability to absorb new knowledge and technology and to implement it in the construction phase. The purpose of this paper is to consider absorptive capacity in Malaysian construction SMEs in rural areas.Design/methodology/approach – The research was conducted in three stages: first, understanding the Malaysian construction industry; second, a literature review on the issues related to absorptive capacity and discussions with the Construction Industry Development Board (CIDB); and third, multiple case studies in five construction SMEs operating in a rural area to validate the factors influencin...

Developing Construction Professional Services in the International Market: SWOT Analysis of China

AbstractConstruction professional services (CPSs), such as architecture, engineering, and consultancy, are not only high value-added profit centers in their own right but also have a knock-on effect on other businesses, such as construction and the export of materials and machinery. Arguably, competition in the international construction market has shifted to these knowledge-intensive CPS areas. Yet CPSs represent a research frontier that has received scant attention. This research aims to enrich the body of knowledge on CPSs by examining strengths, weaknesses, opportunities, and threats (SWOT) of Chinese CPSs (CCPSs) in the international context. It does so by triangulating theories with quantitative and qualitative data gleaned from yearbooks, annual reports, interviews, seminars, and interactions with managers in major CCPS companies. It is found that CCPSs present both strengths and weaknesses in talents, administration systems, and development strategies in dealing with the external opportunities and...

Understanding UK construction professional services exports: definitions and characteristics

Services are very important to the UK balance of trade; a surplus has been recorded for trade in services every year since 1966. Construction professional services exports (CPS), which cover architecture, engineering and surveying (AES), have also increased, contributing over £3bn to the UK trade balance in 2007. The changing environment of construction professional services exports complicates the validity of the characteristics and definitions of services as described in the research literature and official export statistics. Through semi‐structured interviews undertaken with large consulting engineers and a roundtable discussion with industry and government representatives, the research found that the impact of globalization and the changes in the construction business environment, such as increasing foreign ownership and changing forms of procurement, are not fully reflected in the official statistics. There have also been rapid changes in technology, procurement and methods of delivery which have impacted on exporting AES firms and a more appropriate set of characteristics is needed to better reflect the project‐specific and knowledge‐intensive nature of AES firms.

Corporate social responsibility disclosures in international construction business: trends and prospects

AbstractThere is increasing sophistication in corporate social responsibility (CSR) disclosures by international construction companies (ICCs). Nevertheless, a systematic analysis of the trends and prospects is yet to appear. This study fills that knowledge gap by providing an understanding of the idiosyncrasies of CSR disclosures and by offering suggestions for future reporting exercises. By examining the top fifty ICCs’ CSR/sustainability reports using content analysis, it is found that the more negative effects a company may have, the more remedial strategies it will disclose in a CSR report. ICCs from economically more developed countries maintain a high level of CSR disclosures, while their counterparts from developing countries have caught up in this CSR cause. As a way to improve the consistency and integrity of disclosed information, ICCs are increasingly adopting CSR reporting guidance frameworks and using third-party assurances. CSR disclosures present a high degree of uniformity while they also...