Executive Summary Report
‘The BAA Construction Logistics Consolidation
Centre operated by Wilson James and Mace is one
of the most progressive demonstrations of how
lessons learnt from other industries can improve
the performance of the construction industry...
I feel that the lessons learnt are of great
importance to the UK construction sector... This is
something that you can do and this operation can
be transferred to other project types.’
Nigel Griffiths MP Minister for Construction
This report is the culmination of a one-year Department of Trade
& Industry (DTI) sponsored research project under the ‘Partners
in Innovation’ scheme. The report provides an examination of
how Construction Logistics Consolidation Centres operate, the
benefits they bring, difficulties encountered and how they can
be adapted to suit a variety of construction projects.
A copy of the full report is available on request by emailing
Project website: www.consolidationcentre.com
“There should be greater focus
on supply chain management
and logistics to facilitate the
elimination of waste”.
Why Research this Subject?
Logistics Consolidation Centres are a new innovation to the
construction industry. Traditionally, supply chain management
and logistics skills in the construction industry fall some way
behind other industries, such as manufacturing and retail, and
there is opportunity to learn from their success. In these
industries improvements, in supply chain management and
logistics techniques have been adopted over a number of years
to improve efficiency and profitability.
In order to enhance the performance of the construction
industry it was recognised in “Accelerating Change” that…
“There should be greater focus on supply chain management
and logistics to facilitate the elimination of waste”.
So why is this important? Overall, the construction industry
contributes up to 10% of the UK’s annual GDP
(Source: “The Social and Economic Value of Construction”,
Pearce, 2003). Previous research has shown that up to 20% of
all construction costs are transport-related (Source:
“Construction Transport – The Next Big Thing”,
Building Research Establishment, 2003). If just a small
improvement were made in reducing the amount the industry
spends on transportation and distribution this would yield
massive cost savings.
In addition, the UK’s national and local road networks are
becoming more congested every year. This further decreases the
efficiency of all types of urban freight distribution. Whilst the
introduction of congestion charging in major cities addresses
part of the congestion problem, it will no doubt add to the cost
of construction in these locations. An ever-increasing emphasis
on environmental considerations, (congestion, pollution, noise)
not least from a legislative point of view, means that the
construction industry must address this challenge.
Construction goods, (excluding steel frames, ready-mix concrete,
etc.) are delivered into the Centre during the daytime in relative
bulk – prior to being ‘called off’ by trade contractors in the
quantities required for use in the immediate future in
workpacks, following a ‘just-in-time’ approach. Goods are
checked on arrival at the Centre for quantity and condition,
ensuring any problems are highlighted at an early stage.
The Centre does not store goods in the conventional sense (no
more than 7 days is the ideal). It distributes ‘just-in-time’ to
meet the daily needs of construction sites - demand pull - the
‘Holy Grail’ of supply chain management.
Goods are consolidated, which means that multiple part-loads
are combined into single shipments. This process maximises
the efficiency of distribution vehicles and leads to a substantial
reduction in overall vehicle numbers delivering into a
Radical solutions and innovative working practices are needed to
overcome these problems. This research focuses primarily on the
Heathrow Construction Consolidation Centre, which supports the
delivery of major capital construction projects at Heathrow
Airport, London. In addition, the research is supported by an
examination of the Stockholm Logistiks Consolidation Centre,
which serves the largest urban regeneration scheme in Sweden
and shares remarkable similarities with Heathrow.
The aim of this research was to show how the benefits
and lessons learned could be applied to the wider
What is the Heathrow Construction
Consolidation Centre and How Does it Work?
The Heathrow Construction Consolidation Centre operates as a
distribution centre for construction materials, plant and
equipment that are used on construction projects at Heathrow
Airport (Terminals 1 – 4). Aside from Terminal 5, BAA typically
spends £300 million per annum at Heathrow alone on a wide
variety of projects to update and improve the existing terminals
and infrastructure. This is a huge undertaking, given that the
airport typically handles 65 million passengers per annum and
airport operations and passenger service must continue
unhindered by construction activity. The main purpose of the
Consolidation Centre is to promote the efficient flow of
construction goods from supply chains to actual points of use
on projects. It is neither a ‘warehouse’ or ‘builder’s merchant’.
The key feature of the Centre is that goods are delivered not just
to the site entrance – but to specified locations as close as is
practicable to the workface, by material handling operatives.
They are specialists in their field and use an extensive range of
vehicles and mechanical handling equipment necessary to
complete distributions safely, efficiently and without damage.
Executive Summary Report
In addition they deal with all associated issues, such as overall
co-ordination of distributions, (to avoid clashes) ‘walking’
intended access routes, arranging road closures, lifting plans,
health and safety of site workers and the general public,
(erecting pedestrian barriers, etc.) ensuring that order is created
in the distribution process. Trade contractors are left free to
concentrate on their core tasks, without worrying about the
coordination and supply of goods to site, or the need for their
specialist trade operatives, (who are often working in short time
windows) to be diverted away from production to assist with
The Consolidation Centre is reliant upon the information it
receives from trade contractors. A series of simple processes and
systems have therefore been developed to facilitate the
operation of the Consolidation Centre. This includes a
comprehensive programme of KPI’s to measure the performance
of the Centre and its impact on the construction projects that it
serves. Ambitious performance targets have been set and
achieved – measuring, for example ‘right goods, right quantity,
right condition, right place and right time’ –
with the emphasis on continuous improvement.
● Net project construction costs can be reduced by 2%.
● Delivery costs can be reduced for material suppliers.
In particular, waiting times for off-loading deliveries can
be reduced by 53 minutes on average (Consolidation
Centre compared to Central London sites). Additionally,
92% of delivery drivers surveyed said that they allowed
an extra 30 to 60 minutes to their travel time to meet their
scheduled delivery slot on City Centre sites. Lastly, the impact
of any congestion charges can be mitigated.
● An improvement in plan reliability on projects by up to
5%, by increasing the certainty of material deliveries to
sites and using the Consolidation Centre as a ‘production buffer’.
● Improved productivity - skilled trades are able to spend more
time at the workface. This will become even more important
as the shortage of skilled trades is forecast to worsen.
● Better planning – by using the consolidation process
more disciplined planning by trade contractors is introduced
● Improved delivery certainty – 99% successful
● Reduced potential for theft of materials
● Collection of unused materials for use elsewhere
These processes and systems could easily be adapted for use on
other construction projects as required.
What are the Principal Findings
of the Research?
A comprehensive report has been completed which details:
The research process and methodology
What is a Consolidation Centre and how does it work?
Resources required including people, buildings,
vehicles and equipment
Processes and systems
What are the benefits?
Transferability to the wider construction industry
The principal findings of the report demonstrate how using a
Construction Logistics Consolidation Centre can enhance each of
the key tenets of sustainable construction (economic,
environmental and social) and how consolidation methodology
can be adapted for wider use in the construction industry.
Executive Summary Report
Reduced pollution - CO2 emissions for local delivery
journeys can be reduced by up to 40%.
Reduction of local vehicle movements – by up to
20,000kms in a 12 month period, decreasing traffic
congestion and noise.
Reduced congestion – suppliers and trade contractors
deliver to the fixed point of the Consolidation Centre,
rather than having to find ever-changing drop off points
for different sites. In addition the Consolidation Centre
distribution teams know exactly where to distribute
materials to and what the local constraints are at
Reduced waste – materials delivered to site ‘just-intime’
reduces on-site damage.
Recovery of re-usable materials, e.g. pallets, cable drums,
stillages, hoardings, etc. which are often disposed of
using traditional distribution methods.
Minimising the impact of construction work on the
Improved safety – reduced site storage mitigates
Improved security – using ‘known’ vehicles
All or part of the Consolidation Centre methodology can be applied
to other construction projects. This might include the use of a
dedicated distribution centre, vehicle marshalling/holding area,
goods taken to the workface by site-based or mobile distribution
teams or any combination of these. Each solution will be a hybrid
to suit the circumstances of the project(s) that it serves.
Most likely applications are:-
● Major city centre developments, with difficult traffic
and access constraints
● Urban regeneration schemes
● ‘Live’ operational sites with limited ‘possession
working’, e.g. underground railways, hospitals,
shopping centres, other airports
● Major capital projects – e.g. London Olympics 2012
● Security sensitive sites – e.g. military, prisons,
financial institutions, government facilities
● Multiple projects with common supply chains –
e.g. retail fit-out programmes
For further information about Construction Logistics
and Consolidation Centres, contact:
Wilson James Ltd. - Ian Lister, Tel. 01702 346222,
Mace Ltd. – John Brooks, Tel. 020 7554 8000,
BAA plc – Chris Ctori, Tel. 020 8745 2792,