RESEARCH PAPER

Investigation on supply chain

Research Title vulnerability in lower tiers of
construction industry

Name of the Student B. B. Chathuranga Fernando

University ID no. 18137028

Branch Colombo, Sri Lanka

Name of the Supervisor Mr. S. Kalananthan

Word count 6311

Date of Submission 02nd of March 2019

Honours Research Project Research Paper

INVESTIGATION ON SUPPLY CHAIN VULNERABILITY IN

LOWER TIERS OF CONSTRUCTION INDUSTRY

B.B.Chathuranga Fernando

Birmingham School of the Built Environment, Birmingham City University,

Curzon Street, Birmingham, B4 7XG

Abstract: The efficient and effective supply chain management (SCM) in the
construction industry is hindered by the many factors including the
characteristics of the industry itself. Though the studies have presented the
advantages of SCM implementation of the industry, there is a paucity of studies
carried out on the lower tiers of the supply chain where in between of main
contractor and sub-contractors/suppliers. The purpose of this paper is to extend
on to identifying the barriers and its impact on Sri Lankan context and give
insight on areas need to be improved. This study sets to identify the areas that
most impacting by more definitive approach which can be analysed with
quantitative data thus the focused questionnaire survey was used to collect data
which formed by the base of literature survey carried out. Discouragingly, it was
found that SCM initiatives are failing and facing the negative effects but
reluctant to adopt a collaborative management due to the competitiveness in the
industry although realizing the potential. This study highlights the need for
improved collaboration between the parties in lower tiers and greater degree of
interaction from the main contractor for collective advantage.

Keywords: Extended integration, Collaboration in construction, Construction

supply chain, Contractor-subcontractor integration, Supply chain management

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I NTRODUCTION
Generally the industry of
construction is censured for employing
exceedingly adversarial and divided
approaches to connection between the
parties involved, where on traditionally the
design is isolated from the construction
and the lack of suppliers’ inclusion at the
designing phases (Egan, 1998). One of the
main reasons for the many of these
drawbacks is that traditionally the
construction industry is comprised of
many levels and number of professions,
sub-contractors, suppliers, organizations
and occupations involved compared to a
standard industrial manufacturing which
produces one specified product, the
weakness in integrations and linkage of the
stakeholder’s as to this much of separation.
Traditionally the owner in need of
investing in to a building project will
employ a consultant firm comprises of
architects and engineers etc. to design the
building and then seeks the general
contractor for construct the project as per
the design and drawings. The general or
the traditional contractor will employ
subcontractors and nominated sub-
contractors and contact suppliers for the
material who will deliver to the main
contractor party and hand-over to the
subcontractor party or directly to the
subcontractors to install and fix. And for
most often these supplied material need to
be approved by the consultants which may
gets rejected or changed before actual
installation happens. And often times
facing the issues with the works of
subcontractors relates to the quality, speed
and costs along with sometimes these
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Research Paper
occurs due to the misaligned designs with
the practical working scenario. Such as
this simple example demonstrate the
weakness where the lack of integration
results in delay of works.
As fullford (2014) states this heavy
and variable workload in construction
industry recalled for a solution and in
response to that subcontracting was
introduced but resulted in heavily
fragmented nature and complex
relationships lead to discontinuity within
teams. (Fullford, R. and Standing, C.,
2014) On a broader scale, this nature and
traditional approach in the industry hinder
the integration between the design,
construction, maintenance and demolition
phases resulting in losses, inefficiencies
and lowered value in product delivery.
Christoper (2005) describes a
supply chain as “a network of
organisations that are involved, through
upstream and downstream linkages, in the
different processes and activities that
produce value in the form of products and
services in the hands of the ultimate
consumer”. In construction industry the
supply chain relationships are loosely
linked and fragile due to the nature of the
industry. There is much research work that
has been carried out over the supply chain
management on construction industry.
Public and private funded reports made
suggestions and industry has adopted the
suggestions to some extent. but there is a
paucity of studies carried out on the lower
tiers of the supply chain where in between
of main contractor and sub-contractors.
Though the researchers and many of the
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concepts have been developed and adopted
by the industry, but it can still be see that
the problematic relationship between the
lower tiers causing major effect on project
delivery such as due to design
ammendments, quality of works not in
compliance, sub-contractor’s lack of
personel due to sudden demand of works
etc. This scenario is more prominenet over
on smaller scale construction sites and
more in Sri Lankan context, the issue is
widely spread with the supply chain
collapse between the main contractor and
sub-contractors/suppliers.
As the aim states this study sets out
to explore into the fact that why these
relationships are loosely linked and
collapses on construction project basis by
the use of construction professionals’
experience involves in many constructions
of buildings, roads, landscaping etc. which
uses sub-contractors services extensively.
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AIM
The aim of this paper is to identify the
barriers in implementing the documented
supply chain management concepts for
integrated environment and reasons on
collapse particularly in the lower tiers of
supply chain between the main contractor
and subcontractor/suppliers to develop the
recommendations on minimizing the
identified issues within the Colombo, Sri
Lanka.
OBJECTIVE
1. To understand the current status of
the integration between the main
contractor and subcontractors.
2. To identify the bariers on practical
scenarios in implementing the
integration between lower tier
supply chains.
3. Develop recommendations for
mitigating the identified
weaknesses and bariers in lower
tiers of the supply chain.
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LITERATURE REVIEW
This chapter describes the past studies
that have been carried out in relevance to
supply chain in construction between main
contractor party and subcontractors, though
there is a lack of direct researches been done
on this particular scope in construction field,
the understanding of how construction supply
chain diversified itself from other
manufacturing, relationships in supply chain
of construction, management concepts
developed and identified enabler’s and
barriers for the development of this paper’s
scope on the relationship between main and
sub-contractors.
Construction Supply Chain – Brief
Characteristic
It is commonly accepted that
construction industry is different from the
others and need to be provided unique
solutions and concepts for achieving improved
performance and efficiency. Koskela(1992)
states that traditionally there are common
peculiarities of construction, as unique
product is delivered, temporary organizations
formed, production is on site mostly affects
negatively for achieving efficiency compared
to manufacturing.
Dubois and Gadde (2000) states that in
buildings, a general contractor who manages
the project only executes a small portion of
the “product” by its own construction
facilities. A considerably larger portion about
75% or above of the total value is completed
with the help of suppliers and subcontractors.
Gadde also imply that advances in the industry
is often relates to elimination of these said
peculiarities with such as developments of
pre-fabrication to provide uniform products
and industrialization to production. And those
are the core means of the argument that
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construction industry being dis from
manufacturing as technology transferring is
not possible to cater to the unique needs.
The Ballard and Howell (1998)
contended that parts and components
compatible for manufacturing and assembling,
should adopt lean construction techniques
being used in manufacturing for the varying
dynamics in the construction to “minimize the
peculiarities”
Focusing on to the subject matter on
supply chain of lower tiers which Fullford and
Standing states in spite of the fact that this
separation initially happened due to highly
diversified tasks at hand and subcontracting
was formed as an adaptable way of managing
these but it has brought about complex
relationships in legal and contractually and
discontinuity among the teams (Fullford and
Standing, 2014).
Numbers of studies have underlined
the requirement of fundamentally unique and
radically different ways to deal with these
supply chain relationships in order to achieve
the “customer delight” and limit the
disturbance in the relationships of
stakeholders (Cox, A. and Ireland, P., 2002).
Also states that there is lack of well
documented examples for successful supply
chain management on lower tiers.
Figure 1 shows the basic tiers in
construction supply chain as per the
publication by Pryke (Pryke, 2009).
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Figure 1 Supply Chain Tiers
Construction Supply Chain – Relationships
of Lower Tier
Construction projects comprised with
high number of contracts, relationships and
involvement of subcontractor/suppliers
(Mbachu, 2008) and Tam,Shen & Kong(2011)
outlines that subcontracting is being used as
the most prominent procurement strategy by
the main contractors to reduce the risk of
accommodating continuous works and to cater
for the specialized requirements.
The number of studies have been
carried out in aim of emphasizing the
importance of collaboration between the main
contractors and sub-contractors (Cao &
Zhang, 2011;White & Marasini, 2014) but
Greenwood(2001) believes that the most of
the relationships of main and subcontractor
are opportunistic and far from the integration
and adversarial which leads to the belief that
supply chain management actions and planing
of main and subcontractors are in for the
increase of profitability of main contractor
rendering the other members of this chain
expendable where most affected of a
challenging situations would be
subcontractors and suppliers. Rimmer(2009)
argues that though there is successful supply
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chain management initiaves are presented in
higher tiers, the relationhips in lower tiers as
shown in Figure 1 still follows the tradional
methods. Further adding to this by Holti,
Nicolini & Smalley(2000) traditional
approach results in lack of integration results
in sluggishness of works, lowered value and
reduced profit margins.
As further establishing by King & Pitt
(2009) the relationships between the main
contractor party and subcontractor party are
difficult to manage and loosely connected in
supply chains. Morledge, Knight & Grada
(2009) adds to this by pointing out the reasons
for this as the fragmented nature of the
industry and the heavy dependency on sub-
contracting. The new technology that is being
introduced to the construction industry in
products and services has lead the main
contractor’s employ subcontractors to stay
competitive in the industry rather developing
own teams for these works (Cox, A. and
Ireland, P., 2002). King and Pitt (2009) has
identified that the relationships are more
favourable with the main contractor’s due to
competitive pricing on procurement of works
which also in hands of clients that seeks to
reduce the cost and resulted by the fragmented
nature of the construction industry leads to
lowered quality to achieve higher profit
margins.
These characteristics leads to poor
workmanships on both sides, lowered
willingness to innovate due to lowered profits
and investments and budget, time overruns
which as a wholly affects on developing
collaborative and trusting relationships
between the main contractors and
subcontractors. (Morledge, et al., 2009) Cox
and Ireland(2002) strongly states that main
contractors are considered as opportunistic
and subcontractors to be individualistic that
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motivated by the profit but the behaviour of
main contractor’s opportunism, transfers the
risk to the subcontractor’s in lower tiers,
hinders the collaborative trust between the
parties.
Supply Chain Management Concepts
Due to these identified sluggishness
and problematic areas of this collaboration
between stakeholders of construction projects,
several government funded reports and reports
of research work have been produced
assessing and suggesting the procedures to
upgrade the productivity within the
construction industry. From the beginning of
90s, there has been expanded adaptation and
interest on the theories of supply chain
management to understand and describe the
lacks and to suggest answers to increase the
coordination between subcontractors and
suppliers.
The Latham report (Latham, 1994) and
Egan (Egan, 1998) reports evaluated the and
criticized the practice that has been carried
over on the time for loosely connected supply
chain in the industry made the move within
the UK for improved and efficient supply
chain integration between all the connected
parties of a project. Dubbois and Gadde
(2002) made suggestions for integrated supply
chain implementation using collaborative
agreements between the parties involve as
such contractor, client, material suppliers,
labor suppliers.
Harland (1996) introduces four
categories/levels on supply chain management
concept;
1. Management of internal integration of a
firm’s internal supply chain.
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2. Management of the dynamics between the
suppliers/subcontractors which are
immediately connected.
3. Management of organizations/business
chains with which the organization has no
legally binding relationships.
4. Management of organization network that
is associated with each other in providing
end product to customers.
The author further expresses that
management of these proposed levels are vital
on forming the supply network as they an
integral part.
Dianty, Briscoe & Millet (2001a) with
Pryke (2009) expresses the concept of
construction industry supply chain
management as one of the inter-related
connection within the organizations are
implanted with. Further emphasizes on the
treating these approaches as a wholly in order
to enhance the execution within the
construction industry.
Along with supply chain management
concepts Porter (1985) introduces the “Value
Chain” which is focuses on the final delivery
value which accounts to all the activities
related, inside and outside of an organization
(Weele, 2010). Afterwards the management
objectives have been redefined to be focused
on to the organization basis on its limited
domain in order to deliver better value with
competitive advantage (Green, et al., 2005).
This movement is confirmed by the Lambert
and Cooper (2000) along with the publishment
by King and Pitt (2009), states that
organizations do not operates as a single
structure but in a “supply chain vs supply
chain” competition.
Holti et al. (2000) discuss a managing
approach that enhance and improve the
collaboration and integration by providing the
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support required for the supply chain actors on
lower tiers. One of the key concepts is to
make room for supply chain actors to fully
engage and make contribution to the aggregate
the value of the final product delivered (Holti,
et al., 2000). This approach is considered
important in regards to the characteristics of
vaguely divided, risky and uncertain and large
number of stakeholders involved in
construction supply chains, requires a leading
role to coordinate and process these inter
connected network.
Established Facts
Pryke (2009) conclude that with
improved relationships and involvement of
supply chain actors which in this paper’s focus
of subcontractor’s to a more integrated work
environment and to increase the focus on the
final product would enhance the competitive
advantage with better trusting relationships
need to be the objective of supply chain
management initiatives.
As mentioned before and further
clarified by Gann (2000), the traditional
approach to subcontracting, the main
contractors often withhold the required details
and information such as necessary for
understanding of the risk. These practices lead
to a hindered collaboration and lose of trust
for a long lasting relationship which points out
as one of the main objectives of supply chain
management (Edkins, 2009). Broft, Badi &
Pryke (2015) findings further establishes that
the distrust running within the industry supply
chain is caused by this traditional procurement
of opportunist ways adopted that has little to
no transparency along with the fear of
uncertainty. Authors further points out that
due to the existing compartmentalization, the
sound communication between the main
contractor and sub-contractor is being
constricted and this leads to conflicts of
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interest. Segerstedt and Oloffson (2010)
further adds that due to the communication
problems, the understanding and flow of the
information such as clear idea of client’s
demands from the main contractor to
subcontractor is affected. Further highlighted
the censure of information flow on costing and
risk involved.
Latham (1994) in his report believes
and expresses that the main contractor party
has the stronger driving power on the project
management part along with the control of the
quality of its subcontractor’s works.
Wong and Fung (1999) states that
subcontractors or subcontracting is used by
the main contractors to reduce the
commitment and risk of owning plants and
workers to be employed as permanent basis.
In fact they further identified that
subcontractors are being used as a buffer for
the main contractors and unpredictable
workloads. Ganesan (1996) further states the
fact that general contractor’s obligation of
oversee the works, performance and
compliance of its subcontractor’s to meet with
the client demands. This fact is due to that
generally the subcontractors are not well
established with likes of policies and
procedures and also financially thus the
guarantee is little to no on the perspectives of
quality of work and they meeting the
performance needed without the help of main
contractor.
In essence of these researches
conducted on Supply Chain Management and
barriers of its implementation is developed
upon the base of integration of all the actors
(subcontractors/suppliers) and enabling of
information and knowledge sharing (Holti et
al., 2000; Christoper, 2005; Martinsuo &
Ahola, 2010) thus reducing the above
discussed uncertainities and risks.
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M ETHODOLO GY
Through this paper, priority is given to
identification of the barriers on enabling the
established supply chain initiatives and
concepts in domain of construction project on
lower tier interconnections between the main
contractor and subcontractors. And it aims to
not only to emphasize what has already seen
as less functioning but to actively search for
the practical scenarios that tips out the
collapse of these chains and develop further
recommendation on site basis.
The nature of the topic presents a vast
area that can be considered but this study was
carried out to achieve more specific results by
the professionals who actively enage in the
industry in order to capture the clear picture of
the objectives on quantitative basis.
Quantitative procedures were mainly
incorporated to the in order to achieve the
objectives for this research. The research
follows the established methodology concept
of plan, preparation, data collection, and
analysis and discussion of findings to use for
improve and better understanding of
characteristics and practical reasons causing
the collapse of management in lower tiers of
supply chain. This paper is methodological
and practically applied.
Questionnaire survey is used as the
main data collection method focusing on
different professionals involved on the
construction project from the top tier
management to quantity surveyors/engineers
to gather the most accurate and practical
scenario within the operations inside of the
site. The survey is liited to these professionals
as to achieve focused answers and they can be
considered the most appropriate audience to
experience enough on answering this study.
The methodology is divided into two main
sections of work as first part is forming with
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“Desk Work” and second as “Field Work”. In
the first part, the literature review is formed
and a descriptive literature is carried out to
study the features of the supply chain methods
and the management processes along with
supply chain relationships and management
concepts and identified facts that many
researchers carried out and brought forward to
attention.
The literature review is the main base
on forming that the second part of data
collection which is questionnaire survey
comes under the field work developed on the
basis of the literature guide lines. Generally
questionnaire surveys comprise of two model
of questions which open-ended and close-
ended. The open-ended questions are open for
the respondent to include one’s idea about the
particulars without limiting to the provided
predefined responses. The close-ended
questions are comprises of pre-defined
responses formulated to respondent to mark or
select most suitable as preferred to the
scenario.
The questionnaire survey is mostly
added with close-ended questions formulated
with the knowledge gain with the literature
and the practical experiences since the
responses are pre-defined and mostly
formulated to suit to the scenario addressing,
it would be easier and keep the focus of the
respondent on the subject matter and facilitate
ease of analysis and accuracy. An option to
provide the respondents idea on subject matter
is provided on some questions where the
clarification deemed to be worthy. The
questionnaire will be emailed to the
professionals employed under the main
contractor of randomly selected fifteen
construction projects and limits to the
designations mentioned as before.
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D ATA A NALYSIS 49% amongst them were above 5 years of

experience which makes great contribution to
From the distribution of questionnaire the survey for the valid results.
survey, 64 responses were received and
considering the nature of this study, requiring Status of Integration
more experience, professionals marked less
From the collected results it can be
than 2 year were removed from the analysis
identified that experienced construction
and further neglected the responses with
professionals are giving consideration in
inconsistent answers which is against the
integration with sub-contracters/suppliers but
theories and practicality established thus 56
lagging behind in consideration of
valid responses collected from the targeted
involvement for the cost and risk information.
sample of professions who are actively
Further analysis into the first section of the
engaging with subcontractors/suppliers in
questionnaire, following result was generated.
lower tiers from various construction project
types.
Very Rarely Rarely Neutral Often Very Often

Respondent Details 35
54%
30 48% 48%
The targeted professions have 45%
25 39%
cooperated successfully and resulted in 34% 34% 32%
20 30%
25% 27%
following factions on profession wise and 15 20%
23% 23% 21%
over 90% of the respondents over 2 years of 10 14%
7% 5%
experience. 5 2% 4%
0%
0
Director/ General
Manager/ Asis.
1
6 General Manager

44 4
Project Manager /
9 Deputy Project
Manager

Figure 4 Status of Integration

The respondents stand mostly on a

neutral ground on this part of the survey
Figure 2 Responded Professionals
which presented basic procedures which
should have been followed on a construction
site on employing subcontractors/suppliers for
16% 10% Less than 2 year the works are in use. The consideration given
2 - 5 Years to the pre qualification stands on a neutral
41% 5 - 10 Years ground and basic provisions given likes of
33%
Over 10 Years finalized drawings/specifications and
incorporating the inputs stands on a neutral
results which convey the idea of professions
undersatands that these are required on
successful commencement of works, but the
Figure 3 Respondent Experience

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results are moving towards the rare side of the
scale on cost and risk related information.
Thus coveying of the idea that the contractors
are keen on sharing these information as it
may lead to reduction of profits established by
the literature review facts.
The study into the status of integration
followed by the negative impacts these
professionals have faced during their
experience in order to determine that this
distance of integration, literature has
established has affected the industry and
following results were received.
mentioned factors on employing for the works
likes of pre qualifications thus lead to the
misalignments and quality, payment issues
which affects the delivery of the project and
rate of misalignment can be interpreted as
having communication issues present within
the parties. Thus the collected data represent
though there is professionals are known the
importancy of the integration, it is hindered by
the behaviors of profit conscious mind set and
project delivery is largely affected by lack of
sharing proper information such as work
scheduled, manpower schedules dow the
stream.

Very Often Often Neutral Rarely Very Rarely Barriers of implementing integrated supply
chain
13%
Quality issues and 39% Following up to the findings on pilot
45%
mislignment with 4% survey carried out, second section of survey
specification 0%
focusses on identifying what affects on
Lack of 50%
manpower/material due 30% successful implementation of integrated
7%
to not providing 9% systems in these lower tiers and to achieve
programmes and… 4%
more focused results, already identified
5%
46% barriers were presented to the sample and
38%
Payment issues due to no 11% following results received on the basis of
involvement at early stage 0%
general character of construction industry also
2% on focusing to the perspective of contractor.
Delays of work/Non- 59%
30%
compliances due to not 7%
providing drawings 2% Foremost the identified barriers with
regards to the construction industry was
0 10 20 30 40
presented and questions can be reviewed on
Figure 5Negative Impacts Experienced the annexure. From received responses, over
It can be identified that almost 50% or 85% of all agreed with the identified barriers
more of the total is facing the negative are impacting on the industry in negative ways
impacts often and significantly the lack of in SCM(supply chain management) and more
manpower/material when in need is having the significantly highlighted the unique product
80% for the often scale is alarming as it shows delivery that requires different skills on each
the importancy of integration on project separately thus vast number of
deciding/scheduling the works for the connecting supply chains
continuity to achieve the targets. And these (manpower/material) puts more weight on
lacking of manpower/material from already implementing integration.
established parties lead to on search for
alternatives thus disregarding the previously

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an integrated environment on level of

Least Impacting Less Impacting
somewhat to most and majority leaning
Somewhat Impacting More Impacting
towards the more to most impacting measures.
Most Impacting
The responses are biased to the lesser side on
35 59%
55% 57% points of not being involve to the decision
52%
30 making, not providing schedules etc, and for
43%
25 39% costing works implies that industry
36%
20 29% professionals are leaning towards the
25% 23% 23%
15 21% traditional approach as these points are more
18%
10 13% 14% inclined towards the profitability and leads to
9% 11% 9%
5 the identified fact that the opportunistic
0
character and leaning towards the lowest
prices affects in implementing a successful
integrated environment and though
respondants ideas were neutral on earlier
points, they agree with these behaviors hinders
the relationships as almost 80% of
respondents have answered these points
affects more and most. The response on lack
of effective communication is alarming
Figure 6 Characteristics of Industry Affecting Integrated indicates most of the projects are suffering on
SCM passing the information down the stream.
The questions presented were inter-
Least Impacting Less Impacting
related to each other and results received are
coralating to the effects of each other. Due to Somewhat Impacting More Impacting

the above unique nature and vast trades Most Impacting

involved, it leads to a rapidly changing 35

environment and temporarily involvements. 30
Thus making a fragmented nature of the 25
industry that 91% of respondents have agreed 20
as impacting for integrated SCM. The data 15
concretes the established fact that due to the 10
nature of the construction industry it poses a 5

heavy impact on implementation of these 0

management concepts unlike other industries

of motor vehicle, apparel etc.

Secondly focus brought onto the

charateristics of the contractor that has been
identified to hinder the relationship with lower
tier supply chain. Please refer the annexure for
the presented facts in the survey. Over 70% of
Figure 7 Main Contractor Behavior Affecting Integrated SCM
the respondents on all points have stated that
the listed characteristics affects negatively for

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Further the comments received also

emphasizes the industry characteristic of
Least Impacting Less Impacting
sluggishness in adopting the new management
Somewhat Impacting More Impacting
movements and technologies and a project
Most Impacting
manager states that the main contracter’s
45 75%
leaning towards the lowest cost hinders the 66% 70%
40 61%
partnership. Overall the results of responses 35
50%
55%
30 46%
proves on the pilot survey facts of industry is 25 36%32%
slow to move into a integrated environment 20 30%
30% 27%27%
15 21%25% 25%
and these responses can be interpreted into 13% 16%
10
that though professionals are facing the 5
0
negatives, reluctant to move towards the
suggested as the nature of the industry and the
exreme competitiveness has created this very
barrier where clients also seeking the lowest
cost to some extent rather the quality and
sustainability.

Recommendation on key improvements

Figure 8 Reccomendation on Improvement

Following to the literature, there has The recommendation presented as to

been numerous studies carried out and
management models have been introduced.
But it can be still seen that the industry is
failing to adopt or lagging behind on
implementation. This study focussed on the
perspective of main contractor, the
professionals have presented with the
identified key factors that would be valuable
on focus as recommendations for improving
the integration, and following responses are
received.
Followed up by the previously
established fact that communication is lacking
is downstream when information is passing
towards the lower tier
subcontractors/suppliers, 84% of total agrees
on improvement of communication is helping
on achieving the integrated environment and
this is supported by the agreement showed on
defining the client needs and wishes down the
stream in order to deliver quality product is of
priority too.
share the cost information with
subcontractors/supliers and to work
cooperation for the defense of margins shows
low interest. This correlates with the
previously identified barriers as the main
contractor’s opportunistic behaviour and fact
that identified by pilot survey which uses
subcontractors as the buffer for the loss/risk of
the main contractor is implied by the less
interest shown on sharing the cost
information. Collectively over 65% or more
agrees on leaning towards long term
partnering, involvement for the
design/specification, risk identification and
sharing and to contractor’s to actively engage
with lower tier subcontractors/suppliers helps
in implementing an integrated supply chain
where the identified problem exists. Moreover
the individual comments received
emphasizing the lack of communication for
passing on the information and a project
manager has commented as “more the
collaboration, less the problems”. But again

B.B.Chathuranga Fernando – 18137028 ~ 12 ~

Honours Research Project
comments were received on negative side that
backing up from sharing the cost data and
risks to keep the market which essentially
means on maximizing the profit.
From the data collected, it can be
recognised that there is high interest from the
professionals for the subject matter and most
of them are showed familiarity with the
importance and need of intergrated
environment for the success of industry but
along with the acknowledging the practical
problems affecting too. The data collected
from the first section can be translated into the
fact that prfessionals/companies are in trying
to implement partnering initiatives and
attempts of addressing the gap that is being
identified which exists in the lower tiers.
Correlating first section with the second of
survey, professionals have identified that they
are facing losses due to the failure in
integrated supply chain management in lower
tiers. From these it can be concluded that
though initiatives are taken there is lack of
success and this study tried to cover these
barriers on character of the industry and
contractor. From the data collected, it can be
observed that though there is will to
cooperation but reluctant on cost/profit
perspectives. This translates in to the distrust,
uncertainity and forced opportunistic character
that is due to the nature of the construction
industry leads to the need of new reformation
on how industry works. Current contracts can
be understand as more driven focus to the
juridical aspects and many examples and court
cases can be observed by the general
professional in the industry. As discussed
above, the characteristic of construction
industry that one reason influence the other
conclude that this integration is an interrelated
network approach. This validates the network
suggested by Pryke (2012) for an effective and
B.B.Chathuranga Fernando – 18137028
Research Paper
successful supply chain management. (Pryke,
2012)
C O NC L U S I ON & R E C OM M E ND AT I ON
Effective supply chain management
initiatives can support in addressing the
traditional ineffective relationships existing
within the construction industry and deliver
increased value to clients as expressed by the
literature. As the study data represents and
documented advantages and increased value
stated in the literature is achieved thorough the
implementation of collaborative working
environment, information and knowledge
transfer on all directions of chains and leaning
towards establishing long term effective
partnerships within the stakeholders.
This research was carried out in focus
of the failure in collaboration in the lower
tiers, particularly concerns of the failure in
collaboration between the main contractors
and sub-contractors/suppliers in construction
supply chain within the main contractor’s
professional’s perspective and as objectives of
finding out most impacting barriers for SCM
implementation in these lower tiers. All
participants demonstrated an expectation of
improving the integration by sharing and
providing support aiming to achieve
performance improvements and collaborative
advantages for an increased product delivery.
Majority is facing the negatives of lacking this
integration and correlatively the results can be
lead to a conclusion that despite the
knowledge on supply chain management
initiatives, there is willingness to create an
integrated environment for a successful SCM.
The literature of this study describes and
results have concluded that characteristics of
the construction industry is challenging the
implementation of integrated environment
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Honours Research Project
where all stakeholders taken in and shared for
collaborative advantage. More significantly
the unique nature of the industry and high
market competitiveness has driven the main
contractors to act more individually for their
advanatage thus very reluctant on sharing the
details of costs and risk factors. Thus the
character of industry itself being negatively
impacting to the aim of SCM, irrevocably it
penetrates in to the character of main
contractors too. It is being brught into the light
by the literature and concluded by the majority
of respondants that the listed characteristic of
contractor impacts negatively in SCM
implementations. Taken the consideration of
practical scenario, all are in business to make
profits thus when industry itself not
supporting, it is inevitable that contractors
seeks to make most out of what it can be
achieved.
On to development of
recommendations, the respondents have
positively responded to the listed options of
the survey and concludes the need of
implementation of integrated management
system in lower tiers for the more efficient
and increased value in delivery despite the
barriers that is presented. One of key
managing concepts that can be employed was
published by the (Holti, et al., 2000) The
Handbook of Supply Chain Management
describes seven principles that need to be
employed for successful SCM. And the use of
technology need to be increased for improved
communication and world is adopting the
cloud based platforms, BIM etc. but Sri
Lankan context is lagging in these
departments.
Overall the objectives of this study
was achieved which concludes that the though
the industry/professionals acknowledges the
need of integrated model in lower tiers and
B.B.Chathuranga Fernando – 18137028
Research Paper
facing the negative impacts because of the
lacking of this integration, the ststus of the
integration is not at optimal level. The
findings also leads to the concluding the
industry is facing more impacting barriers
than enablers for implementation and
stuggling due to the nature of the industry and
its attribution to the contractors itself for
negative behaviors. The professionals are in
align with the key aspects that need to be
improved as of recommendations to
implementation of successful integrated
environment.
Research Limitations
It needs to be noted this study findings
have limitations that is incorporated into the
selected research methodology of
questionnaire survey and valid sample size is
only of 56 nos of only main contractor’s
professions from 15 randomly selected
projects in Colombo, Sri Lanka and only the
opinion was gathered from the main
contractor. A study of supply chain are having
many more variables and hard to define in a
structure thus this study would benefit more in
order to cover broader perspectives from other
research methods like interviews of the same
incorporating more professionals.
Further Research
The further research can be carried out
to gather the data from the perspective of
subcontractors/suppliers in lower tier as a
extension of this study and developing of
SCM framework model based on published
SCM concepts eg: (Holti, et al., 2000) Seven
Principles of SCM in Organisations in order to
establish best practices in Sri Lankan context
for better and improved growth of
construction companies.
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Honours Research Project
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ANNEXURE 01 – SAMPLE QUESTIONAIRE SURVEY

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ANNEXURE 02 – EMAIL CONVERSATION

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ANNEXURE 03 – SUPERVISOR MANUAL

B.B.Chathuranga Fernando – 18137028

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