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A supply chain is a system which organizes the glow of goods, people, information, between the supplier and customer. Supply chain management is the way the supply chain and its participants are organised. Since it was first used at the Toyota car factory in the 1980’s, supply chain management has appeared an essential piece of modern logistics. Traditionally, the organisation of marketing, distribution, planning and manufacturing operated independently. However, supply chain management integrated all these aspects into one strategy. It makes the whole supply chain system more flexible, reliable, and efficient.
Supply chain concepts have only recently been introduced into the construction industry. Construction supply chains are specific because they are temporary, do not have a specific product at the end of a supply line, and include many different project members. That is why they suffer from fragmentation, opportunism and lack of continuity. Supply chain management has had a crucial role in developing the construction industry. However, it is still in its initial stages.
Supply chain management in construction needs to deal with spatial aspects (location of materials, products and distribution centres), transport, stockholding systems (warehouses, stock etc.), material handling systems and equipment, interactions between different parts of the supply chain (for example transport and material handling), and finally the interaction between supply chain members.
Supply chain management in the construction industry can have multiple roles, depending on what it is focused on. It can be centred on the construction site, on the reduction of expenses, logistics, time and inventory costs in the supply chain, on the pre-construction site stages, or on management and production. McCaffer and Root have established a model for applying supply chain management in the construction industry. They broke down the process into procurement and construction, which are integrated and controlled through the supply chain management.