Assessment of Material Supply Chain Management Practices in the Building Construction Industry; A case study in Jimma town

Abstract

Construction supply chain is a network of multiple organizations and relationships, which includes the flow of information, the flow of material services or products, and the flow of funds between client, designer, contractor and supplier (Xue, et al., 2007). MSCM is an important element in project management process. Researchers argued that the construction sector is one of the least integrated industries, in order to achieve economic and labor efficiency there needs to be a restructure of the building supply chain. Even though there are challenges to successfully uptake SCM in the construction industry, efficient SCM is still vital to avoid delays through material delivery, wastage and contract time. Ethiopian building contractors currently are suffering from time delays, quality problems and cost overrun in relation to the lack of or very little awareness and poor handling of the MSCP. The research assessed the current MSCM systems practiced in Ethiopian focused on building construction projects i Jimma Town. A questionnaire survey was used to realize the specific objectives. Fifty questionnaires were distributed to the contracting firms of first, second and third Grade. Thirty three questionnaires were received back and only thirty were found valuable and were analyzed using relative importance index and ranking method. The study showed that MSC consists of six phases and activities under each phase are viewed as only a series of individual activities, most of the contractors do not have procurement division and a well-organized material purchasing flow structure, contractor/supplier relationship is based on project by project basis without forming long term agreement with competitive pricing as the mostly used criteria for selection. Also different level of buffer stocks and time were advocated to mitigate the uncertainties inherent in the construction setting, the problems that may hinder the smooth application of the MSCP through project phases were identified and most factors that might contribute in integrating the project phases of the MSCP were presented. Finally integrated view towards separate activities of MSC process, establishment of partnership agreement with suppliers, internal coordination between parties involved and development of web based information technology system were recommended.