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  1. 1. S. Patil, Prof. Mrs. P. R. Adavi / International Journal of Engineering Research and Applications (IJERA) ISSN: 2248-9622 Vol. 2, Issue 5, September- October 2012, pp.1806-1809 A Survey Study Of Supplier Selection Issues In Construction Supply Chain S. Patil*, Prof. Mrs. P. R. Adavi** *P.G. Student – M.E. (Construction & Management) ** Prof., Civil Engineering Dept. MAEER’S Maharashtra Institute of Technology, Pune-38ABSTRACT It is undeniable fact that construction schedule prepared will be more precise as theindustry is a very important product of Gross subcontractors and suppliers will be present toDomestic Product (GDP) of our country. It is tell the times and the buffer that they wouldalmost 11% of the GDP of our country. It is the require to complete a certain activity; at samesecond most employment providing sector after time they can tell us about the cost related to theagriculture. In spite of its importance, activity based on the material, man-power andconstruction industry has not made necessary equipment required.managerial advancements in formation of Supply One other advantage of integrating theChain to augment productivity and suppliers and subcontractors is that they knowresponsiveness in the Industry. In this research, about the work to be carried out before hand andwe have made an attempt to explore and can arrange for the same in terms of material,understand the nature of supply chain in Indian man-power and equipments leading to reductionconstruction Industry with special attention to in time for starting an activity and at the samesupplier selection issues. time reducing the cost and time wasted in As we all know that construction making last minute arrangements.industry is an unorganised sector where a lot of In this paper ‘A survey study of supplierindividual parties in Construction Supply Chain selection issue in construction supply chain’, wecome together to complete one project. have tried to find out the factors on whichSometimes many Supply Chain players in the suppliers are selected in construction industry inconstruction industry come together for only one today’s scenario. We think that the supplierproject and on completion of the project they go selection is a prerequisite for integrating them intheir separate ways. In such a scenario it is the supply chain. A client would prefer to select adifficult to form and understand the nature and supplier who is trusted and who can be capablenecessity of formation of supply chain fit for use to maintain good quality and consistent supply offor the given project. In construction industry all materials throughout the life of the project andthe SC players involved look to safe guard their also the supplier should be open for long termown profits and want their needs to be attended relationship. In our study we collected thefirst. With such divided interests and lack of primary data relevant to our study throughcoordination between the participating members questionnaire. On the basis of the responses thatit is difficult to complete the project with were collected Relative Importance Index (RII)minimum time and cost variance. for each option for all the questions were Many studies have taken place to calculated. Based on the RII values we haveimprove the coordination between the various SC concluded about the various factors that play anplayers of the project. Earlier researchers have important role in selection of suppliers inalready put forth their view of upstream construction industry.integration in the Construction Supply Chain to In this regard, we endeavour this studyreduce cost and time overrun. We argue that the to integrate the suppliers/subcontractors inkey role of downstream integration has paucity formation of supply chain. We argue that for thein earlier research work. We believe that the downstream integration in construction supplysuppliers and subcontractors are the key players chain, integration of suppliers/subcontractors isin downstream of construction supply chain, the crucial link. Thus, this study has undertakenbecause they are the players who actually get the the research on supplier selection as the pre-work done at the construction site. We think that requisite for downstream integration inif suppliers and subcontractors are integrated at construction supply chain. The result of thean early stage of a project then reduction in time questionnaire survey has resulted into a list ofand cost variation is possible. This means that is factors that will ensure integration ininputs from suppliers and subcontractors are downstream, keeping in mind supplier selectiontaken during design stage itself, then the project issue. 1806 | P a g e
  2. 2. S. Patil, Prof. Mrs. P. R. Adavi / International Journal of Engineering Research and Applications (IJERA) ISSN: 2248-9622 Vol. 2, Issue 5, September- October 2012, pp.1806-1809Keywords - Supplier Selection, Downstream construction businesses with business-to-businessIntegration, Construction Supply Chain relationships but a network of multipleManagement. organizations and relationships, which includes the flow of information the flow of materials, servicesI. INTRODUCTION or products, and the flow funds between client, Facing with the new challenges, today’s designer, contractor and companies are striving to becomebetter organized, increase capital base, acquire high III. SUPPLIER SELECTION INtech equipment and material to compete with the CONSRUCTION SUPPLY CHAINforeign companies which are more experienced. For many organizations effective supplierMany companies are making the beeline for ISO: evaluation and purchasing processes are of vital9000 certificate. Many organizations are trying to importance. As the pace of market globalizationimplement Business Process Re-engineering (BPR), quickens, the number of potential suppliers and theTotal Quality Management (TQM), and Information number of factors to consider when selectingTechnology (IT). Some of the organization had even suppliers increases. In this paper we present thetried to implement the Enterprise level business critical success factors (CSFs) for supplier selection.process (ERP) software and Construction Supply Increased competition and globalization of marketsChain Management (CSCM). facilitated by Internet-based technologies have combined to dramatically change the ranking of Construction supply chain management factors while introducing new criteria to the supplier(CSCM) is an emerging area to be studied. Though selection is substantially different from Manufacturingsupply chain, it is being inspired by it. In Based on the results of this study, wemanufacturing supply chain management, emphasis conclude that supplier selection criteria willis more on modelling volume production, whereas continue to change based on an expanded definitionin CSCM is concerned with the coordination of of excellence to include traditional aspects ofdiscrete quantities of material (and associated performance (quality, delivery, price, service) inspeciality engineering services) delivered to specific addition to non-traditional, evolving ones (just-in-construction projects. The organization and sourcing time communication, process improvement, supplyof material is becoming increasingly complex across chain management).the global construction industry. So, CSCM in termsof supplier selection is very important in today’s IV. SUPPLIER SCORING ANDworld. ASSESSMENT When scoring and assessing suppliers, the following Supplier selection is the vital decision in factors other than quoted price must be considered:construction supply chain. The supply chain ofconstruction industry is primarily fragmented and • Replenishment of lead timeneeds through integration in the downstream. The • On time performanceextent of integration in downstream depends on the • Supply flexibilitysupplier selection practices of the supply chain. This • Delivery frequency/minimum lot sizestudy put forwards the argument that the supplier • Supply qualityselection is the pre requisite for downstream • Inbound transportation costintegration in construction supply chain. • Pricing terms • Information coordination capabilityII. CONSTRUCTION SUPPLY CHAIN • Design collaboration capability Construction is a multi-organization • Exchange rates, taxes and dutiesprocess, which involves client/owner, designer, • Supplier viabilitycontractor, supplier, consultant, etc. It also is amulti-stage process, which includes conceptual, V. SUPPLIER EVALUATION SYSTEMdesign, construction, maintenance, replacement, and The three general types of supplier evaluationdecommission. From this perspective, CSC can be systems used today are:defined as flowing: CSC consists of all the construction • Categorical method,business processes, from the demands by the client, • Cost-Ration method,conceptual, design and construction to maintenance, • Linear averaging method.replacement and eventual decommission ofbuilding, and organizations, which are involved in The guiding factor in deciding which system is bestthe construction process, such as client/owner, is:designer, general contractor (GC), subcontractor, • Ease of implementation &supplier, consultant, etc. CSC is not a chain of • Overall reliability of system. 1807 | P a g e
  3. 3. S. Patil, Prof. Mrs. P. R. Adavi / International Journal of Engineering Research and Applications (IJERA) ISSN: 2248-9622 Vol. 2, Issue 5, September- October 2012, pp.1806-1809VI. RESEARCH METHODOLOGY were working professionals with engineering The methodology is qualitative, which background. To analyze the responses given by theexplores the "insider’s view" of the process, and respondents and to get the criteria on whichprovides independent analysis of suppliers and suppliers are selected in construction industry.subcontractors selection process in construction Relative Importance Index method was used.projects. The objective is to gain access to theparticipant’s experiential insights on supplier Relative Importance Index (RII) is theselection process. process where weight is given to each type of response as per the judgment of the user. In this The data presented in this research is case;primarily qualitative. The principal objective is to usthe participant’s experiences to find the criteria on • Strongly Disagree = 1which they select the suppliers. Specific research • Disagree = 2questions were developed for use in conducting the • Undecided = 3qualitative analysis through survey. These questions • Agree = 4were designed to address the measures used to seek • Strongly Agree = 5the basis on which suppliers are selected forconstruction projects. Once the weights are decided then the total numbers of responses for each option of each question areThe questionnaire was compiled on the basis of the found out.following factors:• Selection procedure for vendors Then RII for each option is calculated using the• Selection criteria considered for the selection of equation; sub- contractor and suppliers• Phase in which involvement of the suppliers and RII = (W1*n1 + W2*n2 + ….) / A*N sub- contractors would significantly influence the project effectiveness Where W = Weight of the option as decided by user,• Impact of technical expertise on project work n = Number of responses under each option,• Testing capability of the supplier A = Highest weight given and• Relationship with the supplier N = Total number of respondents.• Method to encourage subcontractor towards waste elimination process The option with the highest RII for a question is the• Supplier’s geographical reach preferred option for that question• How resourceful the supplier is• Transparency and openness of supplier VIII. CONCLUSION• Expectations from suppliers to ensure quality and This study was carried out to find the timely work criterion that governs the selection of suppliers and• Extent to which the client briefing affected subcontractors in the construction industry. decision regarding supplier and sub-contractor selection Based on the review of literature on• Attitude of client towards supplier selection formation of supply chain in construction industry,• Minimum skill requirement of subcontractors to we found that construction industry is too Execute the work fragmented and too adversarial to adopt supply• Method which would ensure proper coordination chain management practices. We believe that a on project work Supply chain initiative in Construction industry is• Cooperation of suppliers in situations to cope up the way forward to reduce delays and cost and time With frequent design changes overrun.• Impact on material availability due to frequent design changes In this regard, we endeavour this study to• The incentives provided by the client for on time integrate the suppliers/subcontractors in formation delivery of the project of supply chain. We argue that for the downstream• Methods of preventing complacency on part of integration in construction supply chain, integration suppliers and sub contractors of suppliers/subcontractors is the crucial link. Thus,• Impact due to early participation of supplier and this study has undertaken the research on supplier subcontractors in projects selection as the pre-requisite for downstream integration in construction supply chain.VII. ANALYSIS OF RESULTS After preparing the questionnaire, REFERENCESresponses to the questions were collected by sending 1. Barker R., Hong-Minh S. and Naim M.M.,the questionnaire through e-mail. The respondents [2000]. The terrain scanning methodology. 1808 | P a g e
  4. 4. S. Patil, Prof. Mrs. P. R. Adavi / International Journal of Engineering Research and Applications (IJERA) ISSN: 2248-9622 Vol. 2, Issue 5, September- October 2012, pp.1806-1809 Accessing and improving construction supply chain. “European Journal of Purchasing and Supply Management”, 2, pp 179-193.2. Vrijhoef Ruben & Koskela Lauri., [1999]. Role of “Supply Chain Management In Construction.” Research Paper. University of California.3. Chopra Sunil and Meindl Peter., [2004]. “Supply Chain Management: Strategy, Planning, and Operation.” 2nd ed. New Jersey: Prentice-Hall (Pearson education).4. Kothari C R., [2002]. Research Methodology Methods and Techniques.2nd ed. New Delhi: Wishwa Prakashan.5. O’Brein William.J., Formoso Carlos T., Vrijhoef Ruben and London Kerry A., [2009]. “Construction Supply Chain Management Handbook.” New York: Taylor and Francis Group.6. Benton W C, Jr & Linda F. McHenry., [2010]. “Construction Purchasing and Supply Chain Management.” New Delhi: Tata McGraw Hill. 1809 | P a g e