Supply chain management and lean concept in construction: a case of Ghanaian building construction industry

Stock and Boyers (2009), while stating that there exists much confusion among researchers on the definition of SCM, do acknowledge commonalities like coordination, integration and cooperation among chain members. SCM, according to Christopher (2016) is a network of connected and interdependent organizations mutually and cooperatively working together to control, manage and improve the flow of materials and information from suppliers to users. Christopher (2016) continued that the primary concerns of SCM include (i) achieving linkages and coordination between processes, (ii) removing or eliminating buffers of inventory which exist between organizations in a chain through information sharing, (iii) ensuring cooperation and trust, (iv) managing relationships in order to achieve a more profitable outcome for all parties and (v) achieving competitive advantage.

Lean thinking was pioneered by the TPS with focus on waste elimination and minimization, manifested in several shapes and forms, operational efficiency, continuous flow and customer demand pull, which is otherwise referred in manufacturing as just-in-time production (Fitzsimmons and Fitzsimmons 2011; Aamer 2018). Lean thinking has three guiding principles according to Fitzsimmons and Fitzsimmons (2011) and they are as follows:

Satisfy the needs of the customer by performing only those activities that add value in the eyes of the customer.

Tezel et al. (2013) also identified the principles underlying lean thinking as (i) elimination of the process waste, (ii) effective management of the value stream and establishing long-term alliances within the supply chain, (iii) maintenance of reliable and continuous flow of the production and process elements, (iv) pull-based production planning and control, (v) just-in-time delivery of materials and components and (vi) instilling a continuous improvement culture.

According to Holmemo et al. (2018), lean thinking has undergone evolution over the years. They explain that lean thinking, at the early stages, was considered a technical approach based on apply-specific Toyota techniques such as Kanban and just-in-time logistics. It then evolved to a management system for the whole organization and supply chain, with emphasis on contingencies and organizational learning. Lately, lean thinking has become a ‘philosophy’, something beyond ‘what Toyota would do’, and has been translated and adopted to a different corporate context.

Lean construction refers to the application and adaptation of principles and concepts underlying the TPS to construction. As in TPS, lean construction focuses on waste reduction, increase in value for the customer and continuous improvement (Dave et al. 2016; Moaveni et al. 2019). Koskela, as pointed out by Moaveni et al. (2019), introduced a new theory of production in construction context which resulted in the integration of three theories of transformation, flow and value creation. This tripartite view of production led to the birth of lean construction as a discipline. Aziz and Hafez (2013) pointed that managing construction under lean differs from typical contemporary practice because it (i) has clear sets of objectives for the delivery process, (ii) is aimed at maximizing performance for the customer at the project level, (iii) designs concurrently product and process and (iv) applies production control throughout the life of the project.

Koskela (2004) explained that Womack and Jones in their book The Machine that Changed the World did not concisely summarized the principles of lean production. Hence in their newer book (1996), Womack and Jones endeavoured to improve the theoretical side of the discussion of lean production. Consequently, they summarized the principles underpinning lean thinking as:

Precisely specify value by specific product

The central message of this principle is to rethink value from the perspective of the customer. The only thing that adds value in any type of process is the physical or information transformation of the product, service or activity into something the customer wants.

Waste should be understood as any inefficiency that results in the use of equipment, materials, labour or capital in larger quantities than those considered as necessary in the production of the activity. Waste therefore includes both the incidence of material losses and the execution of unnecessary work, which generates additional cost but does not add value to the product (Ayarkwah et al. 2011). Sutrisno et al. (2018) also simply defined waste as anything that does not provide value to the customer. Ho and Kuo (2015), in referencing Ohno, classified waste into seven categories that are apparent in every manufacturing facility in the world. An eighth category was added by Liker (2004) and it includes waste of overproduction, waste of waiting, waste of transport, waste of over-processing, waste of inventory, waste of motion, waste of defects and waste of unutilized people.

Waste of overproduction

This type of waste occurs when production is over what is immediately needed for use, that is, non-value-adding use of available capacity leading to producing more and faster than the customer requires. Inventory stockpile, unbalanced material flow, extra resources and complex inventory management are some of the characteristics of overproduction.

Numerous tools have been developed along with lean philosophy including Kaizen, Kanban and 5s, with all these sharing similar trait of ensuring continuous improvement. 5s is a set of techniques providing a standard approach to housekeeping within Lean. It is designed to improve efficiency, strengthen performance and provide continuous improvement. This is achieved systematically by cleaning and standardizing the whole organizational workplace. The processes through which 5s goes through are sort, set in order, shine, standardize and sustain (Randhawa and Ahuja 2017). Kaizen also deals with continuous improvement process where everyone is encouraged to come up with small improvement suggestions on a regular basis, process oriented, not straight forward and difficult to sustain in the long run (Ma et al. 2017). Ma et al. further explained that Kaizen aims to produce results from incremental change process, by instilling in everyone within the organization sense of responsibility. Kanban means ‘signboard’ or ‘billboard’ and it works on the basis that each process on a production line pulls just the number and type of components the process requires, at just the right time. It is a means to achieve just in time (Koskela 2004). Ahmad et al. (2016) asserted that Kanban is highly adaptive, focuses on quick response to customer requests, while being based highly on collaborative and self-managing teams.

As pointed out earlier, SCM largely thrives on coordination, cooperation and integration among all parties along the supply chain which have the ultimate goal of ensuring consumer satisfaction. Mean scores as found in Table 3 indicate that all other stakeholders have very cordial relationship among themselves as mean scores are statistically significant. Respondents rated the level of coordination and collaboration with clients highest, recording a mean of 4.67. Viewing the ultimate goal of successfully completing a project supersedes all other interests, with stakeholders to a project complementing rather than competing with each other. This is fostered in an atmosphere of mutual trust and cooperation. This trait was very noticeable particularly in procurement-related issues among industry players. Long-term relationships have been established with trusted suppliers, stated an interviewee, who know when and what to supply at any given time. The interviewee continued that this relationship further boosts the cash flow of the company as it permits the arrangement of flexible credit terms, while suppliers could also count on the creditworthiness of contractors. Although the current Procurement Act in Ghana favours ‘hit and run’ when it comes to contractor selection, contractors are more likely to have had previously engagement with the University. Based on previous performance, the University is at ease, retaining the hope that quality work would be delivered at the end of the day. Suppliers too, benefit from mutual trust and loyalty, occasioned by the higher level of collaboration and cooperation existing among industry players. One supplier buttressed this by pointing out that contractors do hardly default on payment thus ensuring their continuous existence in business. The picture thus painted is a win–win situation for all involved.

Effective collaboration and coordination largely thrive on information sharing. Information sharing can also be as effective as the mode and effectiveness of communication. Respondents generally agreed that there existed cordial relationship among all parties with respect to communication and information sharing. This is evident in all respondents’ responses attaining significance, as indicated in Table 4. The modes include site meetings, letters, site instructions and phone calls. Electronic means such as email was seldom used though communication between subcontractors and main contractors occasionally employed this mode.

It came to light from the interview that these meetings are held on monthly basis and may be reduced to biweekly when a particular project is nearing completion. It was also found out that aside monthly site meetings, technical meetings are scheduled to iron out critical and pressing issues that may arise in between monthly site meetings. Interviewees generally believed that the regular nature of the meetings help to clearly define roles, address issues, set targets and source for ways of achieving them.

Site meetings and technical meetings provided an effective avenue for all parties to deliberate on issues bothering on the smooth execution of projects. It is at these meetings the wide range of issues that will promote the efficient site management and material deliveries were discussed. Other issues include the clarification of discrepancies in working drawings, waste generating activities; any other issues that militate against the smooth execution of projects are looked into and solutions are found. Meetings also served as conflict resolution platform. Since meetings bring together all these players under one umbrella at a time, coordination and collaboration are greatly enhanced.

The results prove that generally the various players took into account the concerns of others when planning their activities. This is because there exist healthy relationship among players. Respondents ranked the relationship that exists among them as very healthy. It was found out from the interview with subcontractors that they also see the relationship between themselves, main contractors, consultants and clients as very healthy. Consultants held the same view. The planning of activities by main contractors was influenced to a greater extent by consultants, subcontractors and major suppliers and the reverse also holds true. This explains the higher level of coordination among all parties. It was therefore not surprising to find activities such as defects, unnecessary work, poor storage of materials and poor quality of work not being usual occurrences on-site and hence not sources of waste for the purpose of this study. Coordination in planning of activities by all parties ensures that work is done according to specification, doing the right thing at the right time and allocation of the right type and quantity of materials to the right type of activity. Table 5 summarizes the level of agreement to coordination in planning of activities.

Strong coordination among parties on a project will be stepped in the right direction towards the successful completion of a project. This is because individual companies with separate corporate interests have come together to execute a particular project. One subcontractor who installs lift stated that he can only move to site after the main contractor has finished with all concrete works related to the lift well. He elaborated further that this explains how reliant he is on the main contractor. He however agreed that the main contractor would also have to wait for him to finish with his works before making good any works disturbed. All interviewees agreed that they could hardly achieve the level of success required if they do not take into account the concerns and influences of other players. Team work, to them, is the watch word.

For the purpose of this study, waste is understood to be any losses produced by activities that generate direct or indirect costs but do not add any value to the product from the point of view of the client. Respondents understood waste to mean one of the following: leftovers of materials on-site, unwanted material, excess material not used after a construction activity, materials that are supposed to go into the works but do not find their way into the works, percentage of material which was not used as intended as a result of improper usage and/or supervision and any unwanted materials. In line with the set criteria, items O–X, with mean scores of less than 3, were considered insignificant.

Another observation was that respondents understood waste from the point of view of one or more of the categories of waste but not certainly all. Subcontractors generally preferred to consider excess materials in inventory as locking up their capital rather than waste. They also understood waste in relation to rework. Different from the above explanations, one respondent understood waste as activities carried out which do not add value and lead to loss of time, quality and cost.

Respondents mostly did not define waste with respect to value adding as 57% said that it was difficult for them to identify value-adding activities. It gives rise to situations where contractors are not able to identify all wastes and make them targets for reduction or elimination. Site observation confirmed this position because most site supervisors’ efforts at waste reduction were geared towards the efficient use of materials to prevent them from being wasted. Very little consideration was given to time-related waste. From the findings, most activities that are time-related such as delays in arrivals, slow decision-making by consultants and inefficient movement of workers were usual occurrences on-site. On the other hand, activities such as defects, over allocation of materials and work not done, which the respondents considered to generate waste, were not significant to this study, thus giving a clearer picture of the angle from which waste in construction is tackled.

The above can be explained by the fact that 61.9% of respondents said that they had no tools and techniques that helped them identify waste. In the absence of such tools, it only follows naturally that not all activities that generate waste would be captured. Overwhelming majority of 90.5% of respondents said that they would like to introduce the concept of lean in their organization to help them identify and eliminate waste. Although most respondents were not familiar with lean concept, after a little explanation, they expressed willingness to adopt such a concept. One respondent, who has some knowledge in lean concept, though accepting to adopt this concept, particularly concerned about the capital intensive nature of its implementation in the initial stages but agreed that it paid off in the long run. This study, however, did not go into the monetary requirements and implications of implementing lean concept in construction.

Identifying value-adding and non-value-adding activities on-site will greatly help in detecting activities that generate waste and subsequently target them for reduction and/or elimination.