Theoretical supply chain network modelling in the building industry

Various supply chain management models have emerged in the last two decades in the manufacturing industry. Current supply chain techniques in the construction industry have focussed on project-based models particularly the logistics of materials management. It has been established in manufacturing that the greatest successes have been in those supply chains where strategic alliances have been developed between key parties and longer-term relationships have been developed across the entire network of suppliers at each stage of production. The link between the customers’ internal management systems and the external suppliers’ management systems has been identified as important to creating successful alliances. Unravelling this complex web of successful buyer-supplier inter-enterprise relationships and dependencies in manufacturing has relied upon the two key causal factors of supplier coordination and supplier development. Theoretical SCN modelling in construction needs to consider that the underlying structure of the majority of parties involved within construction projects is largely a network of small to medium enterprises. A theoretical supply chain procurement model is developed that reassesses the fundamentals of organizational structure and explores the potential for future flexible inter-organizational arrangements. The modelling draws upon network sourcing concepts and aims to foster risk sharing and engender stability in contractual chains. The methodology for a future research project is described that will explore supply chains in a small remote construction market.