| At its core, supply chain management is the oversight | | | | Grande do Sul, Porto Alegre, Brazil), Vrijhoef Ruben |
| of materials, information and finances and the | | | | (Delft University of Technology, The Netherlands) |
| coordination and integration of flow within and among | | | | and Kerry London (Deakin University, Victoria, |
| companies. While a relatively new and still somewhat | | | | Australia), provides an in-depth review of |
| unsophisticated concept within the construction | | | | methodologies and discusses the integration of |
| industry, the process was formalized in the 1980s | | | | theories and approaches. |
| and has been entrenched in the manufacturing sector | | | | They note that construction clients are demanding |
| for nearly three decades. | | | | faster, more responsive construction processes and |
| Perhaps the best way to illustrate the need for | | | | higher quality facilities, thereby placing pressure on |
| Construction Supply Chain Management (CSCM) is to | | | | the supply chain. |
| first cite an example of an especially messy project | | | | Author Stephen Pryke's "Construction Supply Chain |
| aftermath. The result is an epic battle between MGM | | | | Management" catalogues a wide range of observation |
| Properties and Dubai World, the owners of the new | | | | and analysis from the first decade of CSCM |
| CityCenter in Las Vegas, NV; and Perini Building | | | | strategies in the UK. Pryke's book combines research |
| Company, the primary contractor on the job. In late | | | | from leading international academics with tangible |
| March, the simmering dispute erupted into a full-blown | | | | case study examples. The book makes a strong case |
| legal confrontation with nearly a half-billion dollars up | | | | for the need for innovative integrated delivery |
| for grabs. | | | | systems as projects grow increasingly complex. |
| Perini's central claim is that late design changes and | | | | A MATTER OF PRACTICE |
| project modifications nearly doubled Perini's contract | | | | Poor quality, unmanageable costs and missed |
| from $3.5 billion to $6.8 billion. The company is seeking | | | | deadlines have led to the demise of the hard-bid |
| $491.2 million in mechanics' liensagainst CityCenter to | | | | process. Time and again during the past two years, |
| preserve the rights of contractors, subcontractors | | | | the vast majority of construction company principals |
| and suppliers to seek foreclosure against the owner | | | | interviewed by Construction Digital have stressed the |
| as leverage to get paid. | | | | need for nurturing long-term relationships, developing |
| MGM countered that it would file a claim seeking | | | | repeat business and involving owner-clients in the |
| hundreds of millions of dollars from Perini while | | | | complete process from start to finish. |
| stressing the original contract mandated binding | | | | Managing Director Chad Courty of Texas BBL says: |
| arbitration if a dispute arose, citing a 2005 contract | | | | "The biggest difference is the relationship we have |
| provision. Since Perini hasn't been paid by MGM, it | | | | with owners. From the moment we start a project, |
| hasn't paid its subcontractors, at least two of which | | | | everybody is part of the team and everyone is |
| have sued both parties. | | | | involved in the process. It's in the owner's best |
| EDUCATING AN INDUSTRY | | | | interest to get involved early and have us work with |
| Slowly but surely CSCM is making inroads. In | | | | them every step of the way because they save |
| February, Linda Conrad of Zurich Insurance and Don | | | | money in the long run," Courty says. |
| Nabor of the Gilbane Building Company presented a | | | | At Dellbrook Construction in Braintree, MA Vice |
| session on weak links in the global supply chain at | | | | President of Project Management Ed Sople oversees |
| The Associated General Contractor's of America | | | | job coordination, maintaining detailed long-range |
| (AGC) Surety Bonding and Construction Risk | | | | calendars and holding weekly meetings to ensure all |
| Management meeting. | | | | parties are on the same page and that schedules are |
| They explained the need for implementing sound risk | | | | met. The company makes it a point to know its |
| management to offset those unforeseen natural and | | | | many subcontractors' workloads and parcels out |
| man-made catastrophes that could impact materials | | | | work accordingly. "We know all of the subs we work |
| suppliers' ability to deliver goods to a project on time, | | | | with and their existing workload intimately and we |
| if at all. They identified additional risks, such as | | | | work very hard to make sure everything is |
| regulation changes and damage to company | | | | coordinated. A lot of times we will buy necessary |
| reputation. Both urged seminar attendees to | | | | materials ourselves," he points out. |
| consider the global supply chain as an overarching | | | | Moving forward in a post-recession economy, the |
| financial issue, instead of just a purchasing issue. | | | | primary industry goal should be squeezing out waste |
| The "Construction Supply Chain Management | | | | and inefficiency at all levels – precisely what |
| Handbook", published in 2009 and co-edited by | | | | formalized supply chain management is designed to |
| international experts William J. O'Brien (University of | | | | do. |
| Texas), Carlos T. Formoso (Federal University of Rio | | | | |