Research on Uncertainty in Supply Chain Management of Construction Enterprises?

The following is the research content of supply chain management uncertainty of construction enterprises brought by Zhong Da Consulting for your reference.

As one of the national pillar industries, the construction industry has huge volume, fixed space, long production cycle and strong singularity, and the production process is greatly influenced by climatic conditions, which is one-time and uninterrupted. With China's entry into WTO and the integration of the world economy, the construction industry in China has developed rapidly. The previous "vertical integration" management model can no longer meet the increasingly fierce competition in the construction industry, so it is imperative to introduce supply chain management into the construction industry.

Significance of supply chain management in 1 construction enterprises

The so-called Supply Chain (SC) refers to the value chain that runs through the whole process of mass products from product design, raw material procurement, production planning, processing and manufacturing to submission to customers, and is composed of interrelated business processes and business partners. Supply Chain Manufacturing (SCM) refers to a management mode that connects suppliers, manufacturers, distributors, retailers and end users into a whole through feedforward information flow and feedback logistics and information flow. The idea of supply chain management originated from manufacturing industry, but it is not only a patent of manufacturing industry, but also applicable to construction enterprises. The supply chain of construction enterprises refers to a functional network chain structure mode that connects material suppliers, engineering subcontractors, labor subcontractors and equipment leasing enterprises into a whole by controlling the information flow, logistics and capital flow around the general contracting enterprise.

As can be seen from the figure, each supplier sends raw materials to the construction site in different ways, produces the final product (house) through complicated construction and production processes, and then sells the final product (house) to the buyer. Raw materials are transported, produced, re-transported, reproduced ... and finally delivered to customers. In addition, the inherent characteristics of the construction industry, such as long construction period, complex team and wide coverage, make the production process of building products uncertain. For the chain structure of supply chain, uncertainty may spread like a plague in the production network. For example, if the cement supply lags behind, the construction speed will slow down, the project will not be completed on schedule, and the original opening plan or related policies of the owner will be disrupted, which is a lesson from the past. In the next tender, the owner may tend to choose other construction enterprises that he thinks are reliable ... Obviously, the uncertainty in the supply chain may bring serious consequences, so it is necessary to make an in-depth analysis of the uncertainty in the supply chain management of construction enterprises. This paper will analyze the uncertainty in the supply chain management of construction enterprises and put forward the methods to reduce the uncertainty.

2 Uncertainty analysis in supply chain management of construction enterprises

The sources of uncertainty in supply chain management of construction enterprises mainly come from three aspects: material suppliers, construction production process and logistics distribution process, and deviation of upstream and downstream demand information.

2. 1 One of the uncertainties: material suppliers.

How the performance of material suppliers directly affects the performance of supply chain. There are many kinds and quantities of building materials used in construction projects, including bulk building materials such as concrete, steel, masonry, wood and various decorative materials. Therefore, material supply and procurement are the key links in supply chain management of construction enterprises. Due to some uncertain factors, not all material suppliers can provide materials on time during the warranty period. Many factors, such as machine failure, delayed supply by upstream suppliers and disputes between suppliers and buyers, may lead to delayed supply.

2.2 The second uncertainty: the construction process and the logistics distribution process.

On the one hand, abnormal weather conditions such as rainstorm, flood, typhoon, unpredictable natural disasters, and even occasional workers' disturbances will all constitute uncertain factors and have an impact on the whole supply chain. The reliability of the construction process is one of the decisive factors that determine the inventory required by the enterprise and the completion on time. However, the construction process will be temporarily interrupted due to quality accidents such as misplaced materials, unexpected adverse geological conditions and casualties caused by on-site operation accidents.

On the other hand, the logistics process controlled by time and space is the bottleneck of supply chain management. Logistics refers to the movement of materials within production enterprises and institutions and the import and export of materials. For construction enterprises, materials are mainly construction raw materials. Logistics distribution refers to the delivery of a specified number of goods to a specified place at the lowest cost within a specified time. The chain structure of supply chain is the essence of delay in logistics distribution and transportation. In the chain structure, the error will spread step by step and be superimposed and amplified, and the deviation and uncertainty will increase exponentially. Uncertainty will inevitably appear in the process of logistics distribution, and uncertainty will also spread in the process of logistics distribution. For example, accidents such as traffic accidents, traffic jams and traffic diversions caused by road maintenance will delay the delivery time, and the cumulative effect of delay will lead to the uncertainty of delivery time, which will directly affect the construction progress and delivery time, thus affecting customer satisfaction.

2.3 The third uncertainty: the deviation of upstream and downstream demand information.

Demand information is inevitably biased, and the uncertainty of demand information may bring inaccurate market forecast. Professor L.L.Hau, an American expert in supply chain management, pointed out that enterprises at each node in the supply chain only determine their own purchasing plans and inventories according to the demand information of enterprises at adjacent nodes, and the deviation of demand information will be enlarged step by step along the direction of information flow. Therefore, there is a great discrepancy between the demand information obtained by material suppliers at the source of supply chain and the market demand information. The overall deviation of demand information at both ends of the supply chain is much larger than that at two adjacent nodes [2]. Construction enterprises involve many fields, and the supply chain is relatively complex. Information spreads through the supply chain, and each link in the supply chain adds a systematic error to the information flow. Increasing errors lead to information distortion and uncertainty. In addition, the variability of downstream customers' preferences will lead to irregular purchasing tendency, and the uncertainty of their demand and the inaccurate market forecast of upstream suppliers will bring uncertainty to supply chain management.

3 Measures to reduce the impact of uncertainty on supply chain management of construction enterprises

The network chain structure of supply chain determines the existence of uncertainty. The following will study how to reduce or even eliminate the influence of uncertain factors in supply chain management according to the relative influence of various uncertain sources in the system.

3. 1 uncertainty measurement of material suppliers

(1) Maintain a certain inventory: Adequate inventory maintenance is an insurance measure against uncertainty. The spread of uncertainty in the supply chain is complex, and there is no method to accurately calculate the size of inventory in the production process, so at present, construction enterprises can only determine the inventory of materials according to traditional methods and experience. This is a feasible method for construction enterprises to deal with the unpredictable uncertainty in the supply chain. In addition, construction enterprises must correctly evaluate their current inventory management performance.

(2) Downstream customers of suppliers should track, collect and carefully analyze some data of supply delay of their upstream suppliers, such as the average delay and accurate performance of supply, to help determine the inventory.

(3) Establish a good and smooth information communication channel between suppliers and purchasers, so that material suppliers can enjoy the information of general contracting enterprises, thus improving the adaptability of suppliers and reducing the uncertainty caused by information distortion. As the link between the supplier and the production department, the procurement department should coordinate the relationship between supply and production, select professional procurement personnel as far as possible, and adopt a combination of centralized procurement and decentralized procurement to minimize uncertainty.

(4) Select suitable and reliable suppliers from a strategic perspective. Multi-head procurement is likely to increase the possibility of uncertainty, so using as few reliable suppliers as possible is conducive to establishing a stable and long-term cooperative relationship between the two sides and ensuring quality.

3.2 Measures taken against the uncertainties in the construction process and logistics distribution process

(1) Reduce uncertainty from a strategic point of view: Total Quality Management (TQC) is adopted in the construction process, and certain incentive or reward and punishment measures are taken to make the construction production process more reliable.

(2) Streamline and optimize the supply chain, eliminate redundant links, rationalize the process as much as possible, and strengthen the contact and cooperation between supply chain node enterprises.

(3) Optimize transportation routes and adopt convenient and reliable transportation tools and routes; Adopt third-party logistics, that is, outsource packaging and transportation services to professional logistics companies; Arrange sufficient lead time; Strengthen real-time tracking control and timely information feedback during transportation.

(4) Choose suppliers with suitable geographical location to reduce the possibility of uncertainty in the process of material transportation.

(5) Establish the internal and external information management system of the enterprise, track the supply chain uncertainty caused by various changes in time, and make plans and forecasts. By establishing a transparent and shared information system, accurate, fast and reliable information exchange can be maintained between various departments within the construction enterprise and between various processes in the construction process, so as to avoid the impact of uncertainty caused by information distortion.

3.3 Countermeasures for the uncertainty caused by the deviation of upstream and downstream demand information

(1) Establish electronic supply chain management, that is, introduce electronic information technology into supply chain management, so that raw material suppliers, logistics and transportation companies, construction enterprises, customers and related business partners in the supply chain can work together on the basis of information sharing. Through the sharing and rapid transmission of information, suppliers can obtain the original source of the next supplier's demand information, improve the prediction accuracy, enable them to quickly respond to changes in customer demand, ensure the reliability of decision-making, improve the operation efficiency of the supply chain, and avoid the information delay caused by the layer-by-layer transmission of demand information and the inventory waste caused by the cumulative effect of information deviation.

(2) Strengthen the construction of material and technical infrastructure as hardware guarantee. Integrate internal supply chain with external supply chain and users to form an integrated supply chain network. For example, the general contracting enterprise establishes a good strategic relationship with suppliers and subcontractors, and effectively organizes its own production in the fastest and most effective way to meet the production needs of its partners.

4 conclusion

Haul Lee, a professor of supply chain management at Stanford University, pointed out: "The competition in the market is no longer between individual enterprises, but between supply chains." With the improvement of scientific and technological content of construction enterprises, supply chain management will also be deepened in construction enterprises. To some extent, supply chain management is to prevent the negative impact of uncertainty on value-added flow, minimize the impact of uncertain factors in these processes, and ensure the normal flow of logistics in the supply chain. The increasingly fierce competition needs to strengthen the certainty and stability of supply chain management of construction enterprises and establish a reliable supply chain management system to improve the competitiveness of enterprises.

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