MATEO: Hong-Minh - Re-engineering the UK private house building supply chain

MATEO - Mannheimer Texte Online

Re-engineering the UK private house building supply chain

von Séverine Hong-Minh

MATEO Monographien Band 24

Mannheim 2002

ISBN: 3-932178-32-7

ABSTRACT

The UK private house building industry suffers, like the rest of the construction industry, from many problems. The performance of this industry needs to be greatly improved if it is to survive increasing pressures from reduction of land availability, increased customer expectations and international competition. The house building industry is still very traditional with adversarial relationships, focus on costs (and not on value) and a functional silo approach. However,

it also benefits from repeat processes and an established supply chain.

The aim of this thesis is to test if supply chain management principles can be utilised in the UK private house building industry and then to analyse the effect it has on performance. The performance measures used combine supply chain management criteria, house building specific criteria and system dynamics criteria, particularly focusing on demand amplification.

The research analyses three different supply chains for the main material categories necessary for the construction of houses These three supply chains are the house shell, the high-value fit-out and the low-value fit-out supply chains. A case study approach is used in the context of action-based research. A system dynamics model has been utilised to assess the dynamic performance of several different scenarios utilising different supply chain management principles. The impact on performance of each strategy is analysed to understand the specific implications of implementing specific supply chain management principles. It is concluded that the reduction of the supplier base and the centralisation of supply greatly improved the performance. The reduction in manufacturing lead-times proves to be beneficial especially from a dynamic point of view. A change in technology not only has supply chain advantages (shortening it) but also has quality, speed of assembly on site, reduce demand on labour and cash flow implications. The compression of ordering cycle time and construction time reduce the total supply chain inventory costs by 20% and the amount of labour required by 49%. Finally it is concluded that several different supply chain management principles can be implemented in the house building industry (i.e. time compression, partnering, information systems, customer focus, etc.) and that these principles can improve the overall performance of the UK private house building industry.

Gliederung:

Declaration		i
Abstract		ii
Dedication		iii
Acknowledgements		iv
Contents		v
List of figures		viii
List of tables		xiv
Nomenclature		xv
CHAPTER 1	INTRODUCTION	1
1.1	BACKGROUND TO THE RESEARCH	1
1.2	RESEARCH QUESTIONS	3
1.3	DELIMITATION OF SCOPE AND KEY DEFINITIONS	3
1.4	STRUCTURE OF THE THESIS	4
1.5	REFERENCES	5
CHAPTER 2	LITERATURE REVIEW	6
2.1	INTRODUCTION	6
2.2	RESEARCH AREA	6
2.3	SUPPLY CHAIN MANAGEMENT	7
2.3.1	Definitions	8
2.3.2	Supply Chain Management enablers and opportunities	12
2.3.3	Supply Chain Management performance measures	33
2.4	SYSTEMS THINKING AND SYSTEM DYNAMICS	35
2.4.1	Systems thinking	35
2.4.2	System dynamics	36
2.4.3	Strategies to reduce the "Forrester" effect	39
2.4.4	System dynamics performance measures	42
2.5	CONCLUSION	44
2.6	REFERENCES	45
CHAPTER 3	RESEARCH METHODOLOGY	53
3.1	INTRODUCTION	53
3.2	SOFT SYSTEMS METHODOLOGY AND RESEARCH FRAMEWORK	53
3.3	EPISTEMOLOGICAL POSITIONING	56
3.4	RESEARCH METHOD	57
3.4.1	Background research method	57
3.4.2	Case study	64
3.4.3	Modelling and simulation	74
3.4.4	Analysis tools	76
3.5	CONCLUSION	77
3.6	REFERENCES	78
CHAPTER 4	THE PRIVATE HOUSE BUILDING INDUSTRY IN THE UK	81
4.1	INTRODUCTION	81
4.2	OVERVIEW OF THE PRIVATE HOUSE BUILDING INDUSTRY	81
4.3	HOUSE BUILDING AND MANUFACTURING	84
4.4	A SPECULATIVE HOUSE BUILDER	88
4.4.1	Understand customer needs	89
4.4.2	Land appraisal and acquisition	90
4.4.3	Develop construction designs	92
4.4.4	Planning permission	93
4.4.5	Establish supply chain	93
4.4.6	Product delivery process	94
4.4.7	Hand over	94
4.5	PRIVATE HOUSE BUILDING PROBLEM DEFINITION	95
4.5.1	Customer needs	95
4.5.2	Land banks and land acquisition	95
4.5.3	Planning application	96
4.5.4	Construction stage	96
4.5.5	Demand amplification	96
4.5.6	The "mind-set"	97
4.5.7	Functional silo approach	97
4.5.8	Communication and learning	98
4.5.9	The need for change	99
4.5.10	Quasi Delphi study results	99
4.6	HOUSE BUILDING INDUSTRY PERFORMANCE MEASURES	102
4.7	CONCLUSION	104
4.8	REFERENCES	105
CHAPTER 5	MODEL DESCRIPTION	108
5.1	INTRODUCTION	108
5.2	MODEL STRUCTURE	109
5.3	INITIAL SETTINGS	121
5.3.1	House shell supply chain	121
5.3.2	High-value fit-out supply chain	123
5.3.3	Low-value fit-out supply chain	125
5.4	VALIDATION AND VERIFICATION	127
5.5	CONCLUSION	132
5.6	REFERENCES	133
CHAPTER 6	THE HOUSE SHELL SUPPLY CHAIN	135
6.1	INTRODUCTION	135
6.1	RE-ENGINEERING THE CURRENT HOUSE SHELL'S SUPPLY CHAIN	136
6.1.1	Current situation	136
6.1.2	Re-engineering the traditional house shell's supply chain	139
6.1.3	Summary	140
6.2	SUPPLY CHAIN RE-ENGINEERING THROUGH TECHNOLOGICAL CHANGE	141
6.2.1	Alternative to traditional masonry construction	141
6.2.2	Essential supply chain re-engineering	148
6.2.3	Implementation of further supply chain principles	154
6.2.4	Summary of the re-engineering scenarios	158
6.3	SUPPLY CHAIN RE-ENGINEERING IMPLICATIONS ON SUPPLY CHAIN DYNAMICS	158
6.3.1	Scenarios description	158
6.3.2	Simulation results	162
6.3.3	Dynamic results summary	171
6.4	HOUSE SHELL FINDINGS SUMMARY	171
6.5	REFERENCES	176
CHAPTER 7	THE HIGH-VALUE FIT-OUT SUPPLY CHAIN	178
7.2	INTRODUCTION	178
7.3	THE HIGH-VALUE FIT-OUT'S SUPPLY CHAIN CURRENT STATE	178
7.3.1	Background	178
7.3.2	Current situation's performance	179
7.4	SUPPLY CHAIN INTEGRATION: FIVE RE-ENGINEERING STAGES	182
7.4.1	Phase One: Shortened supply chain	182
7.4.2	Phase Two: Labour only	183
7.4.3	Phase Three: Technological change	185
7.4.4	Phase Four: Customer choice	186
7.4.5	Phase Five: Supply-and-fit	188
7.4.6	Summary of the re-engineering scenarios	189
7.5	IMPLICATIONS ON SUPPLY CHAIN DYNAMICS	190
7.5.1	Scenarios description	190
7.5.2	Simulation results	191
7.6	HIGH-VALUE FIT-OUT FINDINGS SUMMARY	196
7.7	REFERENCES	201
CHAPTER 8	THE LOW-VALUE FIT-OUT SUPPLY CHAIN	202
8.1	INTRODUCTION	202
8.2	THE LOW-VALUE FIT-OUT SUPPLY CHAIN CURRENT STATE	203
8.3	RE-ENGINEERING THE LOW-VALUE FIT-OUT SUPPLY CHAIN	206
8.3.1	Merchant's integration	206
8.3.2	Information flow integration	209
8.3.3	Synchronisation	211
8.3.4	Summary of the re-engineering scenarios	213
8.4	IMPLICATIONS ON SUPPLY CHAIN DYNAMICS	214
8.4.1	Scenarios description	214
8.4.2	Simulation results	216
8.4.3	Summary of the simulation results	223
8.5	LOW-VALUE FIT-OUT FINDINGS SUMMARY	224
8.6	REFERENCES	228
CHAPTER 9	RESEARCH FINDINGS AND DISCUSSION	229
9.1	INTRODUCTION	229
9.2	CROSS-CASE ANALYSIS	230
9.3	THE APPLICATION OF SCM PRINCIPLES	235
9.3.1	Structure	235
9.3.2	Relationships	238
9.3.3	Operational strategies	239
9.4	CONCLUSION	240
9.5	REFERENCES	243
CHAPTER 10	CONCLUSIONS	245
10.1	CONCLUSIONS	245
10.2	LESSONS TO BE LEARNT	248
10.3	IMPLICATIONS FOR THE INDUSTRY	250
10.4	IMPLICATIONS FOR ACADEMIA	250
10.5	RESEARCH LIMITATIONS	251
10.6	FURTHER WORK	252
APPENDIX 1	TSM QUESTIONNAIRE	254
APPENDIX 2	INTERVIEWEES LIST	256
APPENDIX 3	MODEL DOCUMENTATION	258
APPENDIX 4	SENSITIVITY ANALYSIS	293

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