Table of Contents

Role of Supply chain in successful project delivery in
Indian Construction Industry
Krishnan Sampath, Research Scholar, Vinayaka Missions University
Dr. N.Panchanatham, Professor and Head, Department of Business Administration,
Annamalai University
ABSTRACT
Delays and disruptions have been the hallmark of
construction projects in many countries. The Construction
industry is large, volatile, and requires tremendous capital
outlays. Project delays have been a topic of concern in the
construction industry. They have become a universal
phenomenon and are almost always accompanied by cost
and time overruns. Journal articles reviewed in this paper
confirmed this theory. Indian construction industry has been
no exception to such delays. Supply chain management
plays a critical role in eliminating such delays. This paper
reviewed the role of supply chain in successful project
delivery in Indian construction industry.
Key words: Construction Projects, Delays, Project delivery,
Supply Chain.
INTRODUCTION
Until few years ago, construction was seen as the
most unorganized industrial sector. However, with opening
up of Indian economy, many international players were seen
investing in India with large projects in industrial,
infrastructural and housing developments. Contrary to
government projects, time value of project completion has
gained significance due to arrival of private players. Hence,
the project managers were forced to look for eliminating
delays and disruptions, addressing risk management more
effectively and improving the delivery process to enhance
the customer values. Since delays and disruptions cause
significant cost implications impacting the viability of
projects due to cost and time overruns, modern day supply
manager had to balance between best of costs and best of
time for a best of products which became critical for the
whole supply process, in time. Micro or internal challenges
and macro, external challenges were to be tackled at every
stage to post a successful story for every project after
project. This became complementary to the job profile for
the new age supply managers. Hence, it was felt to
understand and analyze the importance of role of supply
chain in this industry.
REVIEW OF LITERATURE
The Construction industry which was large and
second only to agricultural industry required tremendous
capital outlays. The construction industry was a vital
component of the Indian economy (Choudhury and Khilathi,
2007) which was developing quickly and consistently yearon-year
with a growth rate of 96.7% since the beginning of
the decade. Project delays were a topic of concern in the
construction industry. They became a universal
phenomenon and were almost always accompanied by cost
and time overruns. Uncertainty in production schedules onsite
was a common occurrence in construction. This
uncertainty was a major driver of project costs. In
construction, delays could be defined as the time overrun
either beyond completion date specified in a contract, or
beyond the date that the parties agreed upon for delivery of
a project. Completing projects on time was an indicator of
efficiency (Assaf and Hejji, 2006).
In recent times, the theory of purchasing and
supply operations was being widely studied under a variety
of labels and for a number of reasons (Akintoye et al, 2000).
However, he found that research on construction SCM was
relatively scarce. Vollman et al. (1997) held that
construction SCM was increasingly seen as a set of practices
aimed at managing and coordinating the entire chain from
raw material suppliers to end customers. Bontekoe (1989)
developed a list of bottlenecks that hamper the application
of logistics in construction which also had application for
SCM. O'Brien (1999) noted that the existing manufacturing
research in SCM, while useful, did not readily translate to a
construction environment; given the transient nature of
production in construction projects. It was recognized that
SCM promises an engineering basis with which to design,
plan, and manage construction projects in a collaborative
manner.
Although effective SCM was a key element in
reducing construction costs (Atkin et al., 1995), Agapiou et
al. (1998) noted that no studies did define what SCM was
within the construction process. Understanding the
complexity of the supply processes in the construction
industry required application of deep-probing methodology
(A. Dubois, L.-E. Gadde, 2000).
In developing commercial projects in India, designs
tend to change during construction to attract more tenants
(Choudhury and Khilathi, 2007). There was a link between
facility design and supply-chain performance. In many
cases, these design changes could cause significant delays in
supply of materials and inadequate inventory management
thereby affecting the project procurement schedule. The lack
of attention to quality by the design consultants was costly
in time and money to all parties in the supply chain (Dubois
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