The beginnings of the term supply chain management (SCM) can be found in the manufacturing industry. Its creation was born from the armoury practises that were around in the late 19th century and Henry Ford’s production methods during the 1920s. The system has remained much the same to this day with the main focus being on the production process used for good by controlling the flow of materials.
SCM overlaps and exists alongside a number of other management approaches and is one of the project management skills that project managers in construction may want to consider gaining.
What is meant by supply chain management?
- Supply is defined as the flow of any resources that are needed to satisfy demand, these might be labour, skills, information, or materials. It can also be used to mean competencies and also to represent numbers of resources
- Chain refers to the fact that there are links both within and between competencies and resources. There are also links between people and the companies they work for and even the processes that occur in a company.
- Management is the more formal authority that exists in any organisational setting, and it is directed towards objectives and aims as a result of the efforts of those individuals who are using procedures and systems.
SCM usually needs a more comprehensive approach, and it is important to look at the company as a vital part of the entire process. The ability to look beyond the company boundaries is required as is the ability to recognise the interdependence that should exist.
Why is SCM important in construction?
If you want to manage the supply chain then you need to understand the breakdown, and traceability, of any services, products, organisations, people, logistics, activities, and resources that can be utilised to change raw materials into the final product.
The field of construction, and buildings, is one that is becoming increasingly complex, more input on the design front is needed from specialist suppliers. There is also at the same time more industry fragmentation, and this is witnessed in the growth of many specialist contractors and suppliers, the increase of products and the way in which design has become fragmented.
The supply chain can be a fairly unstable thing and in an industry that is very much project-based the necessary start and end dates make this a tricky thing to deal with at times. It is really important to be able to find what you need, when you need it and in the quantities that you need. Any delays can have a huge impact on construction projects costing a significant amount of money and pushing timescales back. Because as anyone with project management qualifications will tell you these materials are often needed in order to progress to the next part of a project plan it is often not possible to continue with a different part of the project and simply wait for them to turn up.
Where it is possible, companies prefer to set up good relationships with suppliers who can offer them the type of continuity that will see them having better supply links to meet the demands of their project.
