Understanding supply chain management from a main contractor's perspective

The emergence of supply chain management (SCM) in construction was predominantly driven by major clients that began to adopt procurement arrangements such as prime contracting, partnering, and framework agreements. These were major clients that had the power leverage to mobilise construction firms for projects that spanned a considerable timeframe. Despite such early efforts towards SCM adoption, it increasingly became apparent that numerous subcontractors and suppliers were not fully integrated into these supply chain driven collaborative approaches. This has remained a key shortcoming of such collaborative efforts in the construction sector (Kumaraswamy et al. 2010). This situation has now provided main contractors with the enormous responsibility of coordinating and managing multi-layered tiers of suppliers and subcontractors for production and value addition across multiple projects. Main contractors have taken an interest in SCM as an approach for coordinating upstream linkages with demand-side organisations, in addition to the downstream tiers of supply chain firms assembled to deliver projects. However, empirical evidence of SCM initiatives and practices that have been implemented by main contractors to manage the lower tiers of the supply chain remain scarce (Pala et al. 2014, Broft et al. 2016). In this chapter, the multi-layered nature of subcontracting in construction will be discussed, together with its ramifications, before reviewing literature on SCM principles and practices that can be adopted by main contractors. A case study of SCM practices implemented by a large UK main contractor is then used to provide some empirical evidence of SCM adoption from a main contractor’s perspective. This case study focuses on the ‘dyadic’ relationship between a Tier-1 main contractor and Tier-2 subcontractors