Ehsan Asnaashari © 2010 All rights reserved

Construction Management Synopsis

Logistics and Logistics Management

Logistics has been recognized as a major factor in industrial organizations for many years.  Coming from the defence sector, logistics is the science of planning and carrying out the movement and maintenance of military forces. In management studies, there is a lack of a comprehensive definition for logistics that can reflect all aspects of this concept in all industries. Yet, a general definition for logistics management can be explained as follows:

'The efficient transfer of goods from the source of supply through the place of manufacture to the point of consumption in a cost-effective way whilst providing an acceptable service to the customer.' (Rushton et al., 2006, p. 6)

According to recent investigations, on average, 62 percent of total logistics costs of each country go to the transportation sector, 34 percent to warehousing and maintenance, and only four percent to logistics management (ILS, 2007). In fact, logistics management has the most affect on logistics cost saving, despite consuming the lowest proportion of logistics costs. Logistics management is a tool which ensures efficiency of logistics systems. Its first role is to evaluate all facilities and issues which may have any impact on logistics cost and make the product conform to the customer's requirements. As the second role, logistics management tries to minimize cost and provide a cost-effective system across the whole process of production from transportation and distribution of raw materials to the inventories, work in process and finished products (Simchi-levi et al., 2005). Generally, logistics management encompasses transportation of resources, controlling and inspection of raw materials, storage, handling methods, distribution and reverse flow of production, time efficiency, cost efficiency, flow of materials, and flow of information.

 

Construction Logistics Management

Logistics management has a vital role in construction projects. The most recent reliable report in the area of construction logistics has been published by the Strategic Forum for Construction (SFfC) in 2005. The report explains some basic issues about construction logistics management such as consequence of poor logistics in construction industry and the potential benefits from improving Logistics management. Fairs (2002) explained that construction firms can cut 15 percent off their materials and labour costs by making better use of basic logistics techniques. SFfC (2005) also believes that substantial savings are achievable by implementing an effective logistics management to the construction projects, and its range may vary from 10 to 30 percent. However, effective logistics management has rarely been applied in the construction sector. This is due to the specific nature of the construction industry. Its single and matchless products, one-off and short-time projects, indirect employment, inaccurate information based on estimation, failing to keep the commitments in the supply chain, and unique demand and supply characteristics makes implementation of this concept to this industry very hard.

In construction projects, logistics management includes mobilizing the various resources (man, material, and machine), ensuring that resources are in the right place in the right quantity and at the right time, and providing a condition that enhances quality, safety and efficiency in the project. Briefly, logistics functions in construction projects can be explicated as the following:

· Specifying supply resources

· Acquisition of resources

· Logistics planning and scheduling

· Site layout

· Transportation

· Warehousing

· Handling

· Monitoring and control

 

Rationale

The construction industry in Iran is a profitable sector. However, the process of construction is slow  in comparison with the UK. Several reasons can be explained for inefficiency in construction projects in Iran such as traditional method of construction, shortage in resources, unskilled managers, high level of bureaucracy, contractual maters, and not using modern project management concepts. In the recent years so much attention are paid to project management knowledge in construction projects by both academics and practitioners. Their aim is to bring efficiency to construction projects in Iran by utilizing different project management techniques and software. However, the success is yet to come because of misunderstanding of social science realm. Iranian construction practitioners usually encounter with three main questions to apply management knowledge in their projects:

1. How to obtain modern project management knowledge and which concepts have a priority to be implemented? (identifying and acquiring knowledge)

2. How identified concepts shall be applied in context of Iran?

3. Is there a guarantee that by implementing identified concepts in projects, the organization will achieve benefits in terms of time, cost and quality?

Most of managers are not able to identify helpful techniques to use in their projects because there is a lack of training about modern concepts of project management. Even if a minority of managers identify those techniques, they usually do not adopt the concept in such a way that complies with political, economical and sociological properties of Iran construction industry. In the other word, management concepts as a part of social sciences should be conceptualised in a specific environment. This is the point that usually is not considered by the Iranian construction managers when they try to apply management techniques in their projects. Third, even in western countries such as the UK, projects managers often complain about the deadlines that were not met, targets that are slipped, vague strategic direction and visions, and missions that are poorly communicated. The reason is that in contrast to Newtonian style of management, that believes prediction is possible by abstracting causal relations, the real world is not predictable. Project managers want to plan and control everything in detail while the future is only recognizable when it arrives. Hence, managers need to think about a new way to look at the future and the way that organization can be managed and controlled. Complexity science, as an alternative to Newtonian paradigm in management, has a potential to help project managers in today’s world with high rate of uncertainty to control their projects by getting a holistic view instead of reductionist view.

This research, in a three-year PhD study, aims to address two last questions that are stated earlier. In fact, the goal is to provide advice for practitioners in the construction industry in Iran to reduce the time and cost of construction projects by implementing a modern management concept that is Logistics Management.  It is believed that logistics is one of the concepts that has a great potential to help construction firms to bring efficiency to their projects. This is the reason that logistics management is chosen to be studied in this investigation to be implemented in construction projects in Iran. Based on previous research,  there is a lack of understanding about the concept of logistics management among Iranian construction practitioners. This causes many logistics problems in construction projects in the country. Despite of these problems few research has been conducted in the field of logistics management in the Iranian construction projects and none describes the logistics system. This is the gap in the knowledge that this research is going to fill. By focusing on social and technological aspect of logistics management, a guideline will be developed for practitioners to apply logistics management in their projects. The guideline also will be visualized in a form of a conceptual model that represents different aspect of logistics system.

 

Methodology

The qualitative research strategy is chosen to give the opportunity to the research to emphasize more on describing logistics system by getting help from practitioners' experiences. The author believes that management concepts should be studied in a specific context. To comply with this idea, the research has constructivist epistemology that sees reality as a social construct and knowledge as individual and context dependant. A grounded theory methodology will be utilized in this research to allow hidden aspect of construction logistics management be revealed based on their relevance to the topic. To explore these hidden aspects, 24 open-ended interviews were conducted with the Iranian practitioners. Interviewing had been continued up to the point that desired level of data saturation was achieved. Companies which are involved in construction of residential and commercial projects were the points of interest of this study. Then analysed data should be sorted to generate the guideline. Based on the guideline the conceptual model will be developed.

In paralell with qualitative study, a questioners is design to triangulate the result by using a quanititative method. Quantitative research generates numerical data and aims to employ statistical methods for describing natural phenomena. It is believed that statistical study will illustrate wider vision about the situation of construction logistics management in Iran. To gather data, a structured questionnaire will be design based on relevant literature and qualitative research. Questionnaires will be distributed among construction practitioners and their opinions towards qualitative research hypotheses will be collected. The number of questionnaires depends on population size and sampling consideration that would be decided later.

Contribution to Knowledge

This research will contribute to the knowledge in two ways. First, by illustrating the current situation of logistics management in construction projects in Iran and distinguishing problems that are caused by poor logistics management. This part will describe the current practise of logistics by getting help from carefully-selected practitioners who attended in interviews. Second, by developing a guideline that help construction practitioners apply modern logistics management in their projects. This will be done by reviewing the literature about best practice of logistics management in other countries and adapting those experiences to social, cultural and legislative attributes of  the Iranian construction industry.

 

References

• Iran Logistics Society (ILS), 2007. [online] Available at: www.ils.ir [Accessed July 2007]
• Fairs, M., 2002. Logistics, Builder Group PLC (London). Vol. 267, no. 25, pp. 40-8.  
• Guffond, J., Leconte, G., 1999. Developing construction logistics management: the French experience, Construction Management and Economics (2000) 18, 679–687.
• Rushton, A., Croucher, Ph., Baker, P., 2006. The hand book of logistics and distribution management. 3rd ed. London: Kogan Page Limited.
• Santa Fee Institute (SFI), 2008. [online] Available at: www.santafe.edu [Accessed January 2008]
• SIMCHI-LEVI, D., CHEN, X., and BRAMEL, J., 2005. The logic of Logistics, theory, algorithms and applications for logistics and supply chain management, 2nd ed., New York: Springer.   
• Strategic Forum for Construction (SFfC), 2005. Improving construction logistics. UK: SFfC.
• The Council of Supply Chain Management Professionals (CSCMP), 2007. [online] Available at: http://cscmp.org/Default.asp [Accessed July 2007]