This document discusses using supply chain management techniques to solve problems faced by a small construction contractor. It outlines the basic construction supply chain and common problems like limited work space, material shortages, and delays. Applying concepts like prefabrication, just-in-time delivery, long-term supplier relationships, and information sharing can help minimize activities, reduce inventories, and ensure the right materials are delivered at the right time. This allows the contractor to complete projects on time, within budget, and with higher quality while reducing costs by 20-30%.

1. SUBMITTED BY
JAYESH GUPTA
2020PGMFMS10
SUPPLY CHAIN
MANAGEMENT
SOLVING THE PRACTICAL PROBLEM
BY USING SUPPLY CHAIN
MANAGEMENT
SEMINAR 1
1

2. SUPPLY CHAIN
MANAGEMENT
• A SUPPLY CHAIN IS AN ENTIRE SYSTEM OF PRODUCING AND DELIVERING A PRODUCT
OR SERVICE, FROM THE VERY BEGINNING STAGE OF SOURCING THE RAW MATERIALS
TO THE FINAL DELIVERY OF THE PRODUCT OR SERVICE TO END-USERS
• THE SUPPLY CHAIN LAYS OUT ALL ASPECTS OF THE PRODUCTION PROCESS,
INCLUDING THE ACTIVITIES INVOLVED AT EACH STAGE, INFORMATION THAT IS BEING
COMMUNICATED, NATURAL RESOURCES THAT ARE TRANSFORMED INTO USEFUL
MATERIALS, HUMAN RESOURCES, AND OTHER COMPONENTS THAT GO INTO THE
FINISHED PRODUCT OR SERVICE.

4. WHY SUPPLY CHAIN IS SO
IMPORTANT?
 Mapping out a supply chain is one of the critical steps in performing
an external analysis in a strategic planning process.
 The importance of clearly laying out the supply chain is that it helps a
company define its own market and decide where it wants to be in the
future. In developing corporate-level strategies, a company often needs
to make decisions on whether to operate a single line of business or
enter into other related or unrelated industries.
 Each stage of a supply chain is essentially a different industry, for
example, raw material extraction and manufacturing
 The supply chain enables a company to understand others that are
involved in each of the stages, and thereby provides some insights on the
attractiveness or competitiveness in industries the company might want
to enter in the future.

5. In supply chain management all things are taken into consideration
Like:-
 How to order
 When to order
 How much to order
 Where to deliver

6. Problem solving using supply chain
management:
 I have taken the problem of small construction contractor here who
constructs or build the small buildings and houses
 He takes the contract of constructing the houses and buildings from their
owner, in return he is paid for that.
 so from contractor perspective he wants to earn more and more profit
and also need to maintain good quality.

7.  Generally, time, cost, and quality are main performance of the building construction
project. A particular project must be completed in time, within the existing budget, and
with the desired specification
 The construction supply chain begins with the business concept from the building or
project owner. Then, this concept is translated into the design. After the design is
complete, the owner chooses a building contractor to construct the buildings according
to the design.
 After than construction begins, during the construction, materials, labors, equipments
are transported to the construction site. When all the buildings are complete, they are
given or sold to the end customers.

8.  So the basic supply chain we have discussed is shown by block diagram below:
 But there are various problems faced by contractor which will ultimately increase project
cost and reduction in profit
 These problems are as follows
1. The buildings construction project normally locates in the urban area and numbers of
population are crowded. Consequently, work space or parking areas are very limited . It
is very difficult to frequently park the truck for a long time to load and unload
materials. When materials required are not available or come too early, ultimately
results in extra costs.

9. 2. Sometimes, the contractor does not realize the amount of materials available or their
relevant lead time. Some materials are shortage and must be delivered to the project
urgently. Urgent requirements normally require quick delivery and result in higher
costs.
3. Further, materials must be properly stored inside the construction site. so, an planning
must be done to handle these materials.
4. In the construction project, material handling activities heavily involve in the
production phase . These activities mostly are non-value adding activities and should
be performed as least as possible.
5. Sometimes, Construction materials are transported and distributed from several
suppliers to the construction site at the right time and the right amounts. Delay in
transportation generates extra costs to the project since construction process has to
wait for materials and labors are idle

10.  These problem can be resolved by using proper supply chain management techniques in
the construction process which are shown below:
 Material handling activities can be minimized by planning logistics
 Prefabrication of materials can also be done as they are able to reduce inventories or
unnecessary handlings and transportations of raw materials as well as less labor are used
at the site.
 prefabrication materials are able to reduce logistics costs whereas the project can be
done in less time and lower costs with desired quality
 Also, easier purchasing or management can be achieved and the processing time at the
site is deducted
 With the limited space at the construction site, frequent material deliveries and low
inventory must be maintained, so concept of just-in-time (JIT) has been applied in the
construction supply chain.

11.  Contractor sends information of material requirement to relevant suppliers and requests
them to deliver required materials at the time required.
 For above the contractor must establish the long term contact with suppliers and third
party logistics providers. Information technology is used to link and share information
between all parties to monitor day-to-day progress and update latest material
requirements.
 Last but not the least distribution chaneels are made.
 some materials are directly transported to the construction site whereas other materials
are transported through DC and are sent to the site later. Most of heavy materials e.g.
sand or gravels, etc. should be handled directly to the site. To obtain the rational cost,
the right numbers of material transportations and numbers of suppliers must be
identified. Since the fuel price is rising, the costs of transportation must be effectively
managed and minimized.

12.  So to establish a new construction supply chain for a small building project, customer
demands must be analyzed and interpreted. Later, demands are translated into the
building design. During the design stage, building designers must discuss with suppliers
and logistics specialists regarding the impacts of design on costs incurred from materials,
material handling activities, inventories, etc. to obtain easier construction process and
less costs.

13. RESULT AND CONCLUSION
 After applying supply chain management to building construction process
it is observed that total construction cost will reduced (20-30%).