How Can We Improve the Supply Chain Process?

Wednesday, July 15th, 2015
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It is clear to me that there are significant opportunities to improve supply chain efficiencies in our industry.

For those working within, from property to planning to design to construction to asset management, it is apparent that we can do things more effectively and efficiently, both in project delivery and the commercial environment.

By way of example, I recently used my credit card to purchase a train ticket online from SJ (a government-owned passenger train operator in Sweden.) A few minutes after this purchase, I happened to check my bank account on my laptop. I was quite surprised to see that the transaction I had just made on my credit card was already recorded as a future debit, mere moments after I had made the online transaction, and the ticket was immediately texted to my smart phone.

Yet in our built environment industry we are still having substantial, and often significant, delays in communication between components of our supply chain. For example, this is apparent on the asset management side of things, where we often fail to accurately record where and by whom operational or maintenance work has been carried out. Additionally, there is a lack of understanding of asset portfolio costs for transport infrastructure networks or for building and housing stock.

Our industry is progressively improving by comparing ourselves with best practice within the Australian context. However, I often feel we are missing out on significant learning opportunities by not tapping into the experiences of other industries and through international comparisons.

But we must first understand what it is that we are seeking.

Before we can develop the most appropriate skill sets to meet our needs, we first have to understand the requirements that will better integrate property, planning, design, construction and asset management in the supply chain. Which improvements are we seeking and how are we going to measure relative performance in those areas?

In the coming decades, Australia and other countries will be facing challenges as a result of rapid technological progress. It’s fair to say that globally there is a lack of ability to compare like-with-like across specific performance criteria in supply chain improvement. The European Union has also recently called for applied research around construction industry skills to integrate the digital supply chain.

The underlying message here is that we still have a long way to go. Improving our skill sets will allow us to achieve better productivity for the industry and make our industry more intellectually attractive to the next generation.

I would like to share an example I heard recently from Skanska, a world leading project development and construction group. Skanska’s CEO for Finland, Tuomas Särkilahti, recently delivered an impressive presentation at the eighth Nordic Conference on Construction Economics and Organization on Continuous Improvement of Operational Efficiency.

Skanska has a Five Zeros Vision:

  1. Zero loss-making projects
  2. Zero environmental incidents
  3. Zero accidents
  4. Zero ethical breaches
  5. Zero defects

Skanska’s construction analysts are focused on how they can improve productivity, recognising the impact of quality and safety. They track specific performance assessment indicators around safety, customer satisfaction, employee well-being and profitability. They also seek to identify the root cause of any issues. For example, when tracking the Lost Time Accident Rate, they identified that an organisational culture of personal responsibility and caring has a positive impact on lowering the number of workplace incidents and reflects positively on customer satisfaction and profitability.

What I took away from this presentation is that our industry needs to learn how to identify the root cause of issues that prevent us from improving productivity across the supply chain. We need to develop appropriate performance indicators, record and analyse data, and ensure there is follow-up for appropriate corrective action. Knowledge development, learning through partnerships, and measuring and continuous improvement are all part of the construction productivity picture.

I look forward to seeing Australia’s built environment continue its uptake of integrating digital technologies and appropriate performance measurement to improve supply chain efficiencies in our industry.

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