An Investigative Study into Improving the Efficiency of a Main Contractors Supply Chain and Procurement Methods

By

TABLE OF CONTENTS

CHAPTER 2: LITERATURE REVIEW1

2.1 Introduction1

2.2 Procurement Process2

2.3 Background of the Study3

2.4 Importance of SCM in Business5

2.5 Areas of SCM6

2.5.1 Demand forecasting6

2.5.2 Procurement6

2.5.3 Master planning6

2.5.4 Transportation6

2.5.5 Manufacturing6

2.6 Procurement for Private Clients and Contractors7

2.7 Procurement in Construction Selection and System7

2.8 Structure of a Supply Chain in the Construction Industry8

2.9 Knowledge management in Supply chain Construction10

2.10 Procurement Management Systems in Construction11

2.11 Variation orders --A Curse to All Construction Projects11

REFERENCES15

CHAPTER 2: LITERATURE REVIEW

2.1 Introduction

Procurement has a significant impact on the competitiveness of the company. If the procurement function fails, the company will not receive raw materials or finished products to the required deadline, the right quality and at a price that will save the cost of final products competitive and controlled (Aviv, 2001, 578). The concept of procurement comes under the umbrella of supply chain, which is defined as the organized set of relationships between suppliers of materials, and services, which covers the transformation of raw materials into products and services and delivers them to the firm's customers. SCM synchronizes the functions of a company and its suppliers with the material flow, the services and customer needs (Khan, 2008, 412)

Efficient supply chain work better in the demand forecasting and product or service is stable. Examples of competitive priorities are low cost, quality, on time delivery. The purpose of the supply chain is reaction through the ability to respond quickly locate, inventory and market demand, to hedge against demand uncertainty (Blackhurst, 2005, 4067). Supply chain for the best response is when demand is unpredictable, is the regular introduction of new products, high product variety. Example of a competitive focus on: the development of fast, fast delivery, customization, volume flexibility, high performance design quality.

Supply chain management process tackles the basic business problems of supplying the product to assemble demand in an uncertain and complex world, from the point of vision of the whole supply chain (Chan, 2006, 110). Smaller product cycles and greater product diversity increased supply-chain costs as well as complexity. The new concept of globalization and outsourcing of business and fragmentation has made it vital that this matter be considered from the perspective of the whole supply chain, rather than the more limited view of individual companies. Advances in information technology contributed to a real-time exchange, coordination and decision-making company (Sambamurthy, 2003, 237).

The construction sector is currently going through processes of globalization and / or specialization of production units, within its tendency to convert their chains in authentic "virtual networks", in which providers are included and subcontractors as part of the same. This sector has set a production process for projects, which will be a condition for the modeling approach consistent with the companies in the sector, as we shall see later. Each construction project consists of several stages, that can go from the project (design stage) until the completion of a Comprehensive Maintenance Plan or building infrastructure, through all stages purely constructive ...