Value Stream Analysis of Construction Supply Chains: Findings
(Excerpts from a research report.)
This research provides considerations for eliminating waste in order to reduce the total delivery lead time of pipe supports and thereby improve supply chain performance.
- Up to 96% of the time in the value stream is non-value added time
Construction supply chains are networks of interrelated processes designed to satisfy end-customer needs.
- The principle of "lean construction" advocates the systematic eradication of waste and the promotion of flow for value creation throughout "value streams."
This case study focuses on pipe supports used in power plants. The goal of the case study was to document value-added and non-value-added times in this supply chain as well as to identify possible causes of waste.
- The report details and analyzes the supply-chain configuration that is most commonly used to deliver pipe supports to power plant projects.
- This configuration reflects the engineering firm in charge of designing pipe supports, and the supplier in charge of detailing and fabricating pipe supports.
The report uses value stream analysis (VSA) as a tool to determine the amount of waste in the supply chain of pipe supports, and then identifies the most relevant causes of waste for this supply chain in particular.
- The study presents considerations for achieving performance improvement based on a flow perspective rather than an activity-based perspective.
Simply put, waste refers to all efforts that do not add value to the final product from the point of view of the client. Waste is reflected in:
- Product defects,
- Overproduction of goods
- Excess inventories,
- Unnecessary processing
- Unnecessary movement of people,
- Unnecessary transport of goods,
- Waiting time,
- Products that fail to meet the user's needs.
Research studies show that waste often occurs at the interface between processes, disciplines, or organizations. One particular contributor to wait time is decision-making time, which may be critical especially when several participants interact, playing different roles for different organizations.
Benefits of supply-chain lead time compression are:
- Faster delivery of the product or service to the customer,
- Reduced need to forecast future demand,
- Less disruption in the supply chain due to design changes,
- Greater possibility that participants will interact in a timely fashion with other supply chain participants,
- Easier synchronization of one supply chain with others,
- Less opportunity for products to become obsolete.
Conclusions:
This report identified several sources of waste located at different supply chain interfaces. It has demonstrated that mapping and value stream analysis are valuable tools when trying to improve supply chain performance. It is possible, through the application of VSA, to directly attack the most visible waste.
Practitioners in the construction industry may achieve improvements by applying these tools to their own supply chains.Trying to improve the performance of supply chains is not an easy task. Following are some considerations for different supply chain participants:
- Suppliers should be identified early and provide input into engineering design.
- Unambiguous communication is needed using standardized processes and a limited set of standardized products.
- Pulling resources from construction site installation upstream through the supply chain is advantageous.
- A new management and engineering position called the "Supply Chain Integrator" is emerging.
- Synchronization of merging supply chains at the site is crucial to performance improvement.
- Commoditization of engineering services is irrevocably taking place.
- Better-integrated computer tools are needed to automate the pipe support design process.
- Real-time transparency in the supply chain is beneficial.
Lean production requires that batch sizes be minimized and coordination and communication between participants in the supply chain improved in order to achieve a synchronized flow.
(Detailed report is available.)
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