Building materials supply chains: an evaluative study of the New Zealand residential construction
Concurrent with the development of interest in supply chain management in the broad manufacturing sector, there has been an increasing interest in supply chain management research in construction. The New Zealand construction supply chain comprises a network of project parties connected upstream and downstream to produce what the end consumer wants -much like in any production process. However there is little by way of aggregation or integration in the construction supply chain. Indeed historically disintegration has been its default state. Construction of buildings or structures incorporates a diversity of different materials/products that have to be properly selected, procured and utilised. Materials selection is vital as it influences the cost, durability, serviceability and aesthetic values of buildings or structures wherein these materials are embedded.
The study reported here investigates the nature of the materials supply chain in the New Zealand residential construction sector and suggests possible mechanisms that could improve current materials supply chain practices. The study investigated the subject matter from the perspectives of building materials suppliers, residential building contractors, architects, and homeowners. Firstly, the study conducted 30 semi-structured interviews across the supply chain in the Auckland region. Based on the results obtained, a New Zealand wide questionnaire survey was then administered to a wider population of similar stakeholders. Both the qualitative and quantitative information gathered were then synthesised and the research findings were verified using subject matter expert interviews.
The study found that the New Zealand construction industry mostly practices traditional procurement strategies and materials supply chain management processes are sub-optimal, leading to a plethora of knock-on effects on industry practice. Further, the New Zealand construction supply chain is fragmented and characterised by poor communication, resulting in a misalignment of needs among materials supply chain stakeholders. Moreover, the residential construction sector is characterised by high building materials prices, inferior products, very-customised houses, high transport costs, high labour costs, materials substitution (non-adherence to materials specified), and materials delivery issues.
The research proposes among others, increased standardisation of residential buildings, greater collaboration in the supply chain, a centralised web-based building materials information system, more competition in the supply chain, education of homeowners regarding materials, a government body to control materials suppliers payment problems, adoption of modern technology to perform better supply chain decisions, and consideration of performance warranties on building materials to improve the current materials supply chain in the New Zealand residential construction sector. On the whole, the study integrates the materials selection, purchasing and supply behaviours of all construction stakeholders, emphasising the benefits of collaboration in the supply chain. It is anticipated this will improve the current materials supply chain in the New Zealand residential sector. Finally, the study provides new insights on the building materials supply chain in New Zealand from the perspectives of supply chain stakeholders in the housing sector. Overall the study reported here adds significantly to the understanding of contemporary perceptions on supply chain dynamics in the New Zealand construction industry.