Development of SCM competencies in construction: lessons learned from New Zealand

The construction industry, which contributes around 5 percent to gross domestic product, is a vitally important industry in New Zealand. With over 50,000 businesses, the construction industry is the third largest industry by business count in New Zealand’s economy (Statistics New Zealand 2009). Although it is widely accepted that productivity can be improved by adoption effective supply chain management (SCM), no studies have investigated this in the New Zealand context. The purpose of this paper is to understand the nature and extent of current practice of Construction Supply Chain Management (CSCM) in NZ construction. Consequently to examine whether current SCM practice exemplified in NZ could be considered to be international ‘Best Practice’. A case study approach is used for probing SCM practice on a NZ$75m commercial project located in Auckland Central Business District (CBD. The supply chain network of the principal ground works and superstructure construction stages was studied. The key findings of the case study suggest that the flow of materials remains the main focus of CSCM practice. It was found that essential skills training for CSCM was extremely limited and largely ill-defined in terms of its nature and content. Finally it was identified that as the NZ construction industry moves towards a significantly more collaborative framework, the efficacy of CSCM operations is expected to substantially improve. However this last point did not negate the requirement to expand and improve skills training in CSCM. This indicates that there is room for improving CSCM to reduce construction project costs and increase productivity