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Organizing construction logistics outsourcing: a logistics strategy perspective
Linköping University, Department of Science and Technology, Communications and Transport Systems. Linköping University, Faculty of Science & Engineering.ORCID iD: 0000-0002-3538-8346
Linköping University, Department of Science and Technology, Communications and Transport Systems. Linköping University, Faculty of Science & Engineering.ORCID iD: 0000-0003-0693-8537
2023 (English)In: Construction Innovation, ISSN 1471-4175, E-ISSN 1477-0857Article in journal (Refereed) Epub ahead of print
Abstract [en]

Purpose The construction industry shows an increased interest in how to manage logistics within construction projects. Often construction logistics is outsourced to a logistics service provider (LSP). However, construction logistics is normally approached either as a strategic decision or as an operational issue and rarely as a tactical concern. The purpose of this study is to explore how to organize the logistics outsourcing decision at strategic, tactical and operational levels.

Design/methodology/approach This study is performed as a single-case study within a construction corporation, containing (amongst others) a building contractor (BC) and a construction equipment rental company (CERC) offering logistics services.

Findings The study shows that to procure construction logistics service successfully, BCs need logistics capabilities at strategic and tactical levels to maintain an alignment between the use of logistics services and operational characteristics. Simultaneously, CERC’s need to design their service offerings to correspond to the needs of the BC.

Research limitations/implications This study builds on a single-case study of a Swedish construction corporation. Further research is needed to better understand current logistics outsourcing and development practices and how these can be improved to foster better logistics management at the project level.

Practical implications BCs find suggestions of different logistics organization structures and suitable outsourcing arrangements. CERCs and LSPs can use the findings to understand their customers’ needs and adapt service offerings.

Originality/value To the best of the authors’ knowledge, this study is one of the first studies of how two companies within a corporation can work together to develop construction logistics service offerings.

Place, publisher, year, edition, pages
EMERALD GROUP PUBLISHING LTD , 2023.
Keywords [en]
Construction logistics, Outsourcing, Building construction, Logistics services, Supply chain management, Construction management
National Category
Transport Systems and Logistics Construction Management
Identifiers
URN: urn:nbn:se:liu:diva-195841DOI: 10.1108/ci-01-2023-0017ISI: 001011839400001OAI: oai:DiVA.org:liu-195841DiVA, id: diva2:1775468
Funder
Svenska Byggbranschens Utvecklingsfond (SBUF), 13843The Lars Erik Lundberg Foundation for Research and Education
Note

Funding: Development Fund of the Swedish Construction Industry (SBUF) [13843]; Lars Erik Lundberg Foundation for Research and Education

Available from: 2023-06-27 Created: 2023-06-27 Last updated: 2024-03-21
In thesis
1. Logistics Organization Design for Building Contractors
Open this publication in new window or tab >>Logistics Organization Design for Building Contractors
2024 (English)Doctoral thesis, comprehensive summary (Other academic)
Abstract [en]

Construction logistics management is crucial for timely and cost-effective project delivery. While studies highlight improved project performance with a strategic and long-term approach to construction logistics management, there is a tendency to pursue project-centric logistics planning, hindering long-term, strategic approaches. Building contractors often prioritize dedicated solutions for specific projects, resulting in a lack of focus on company-wide efficiency. In the context of project-oriented building construction, where the logistics organization governs the planning, coordination, and control of resource flows, there is little known about how to tailor logistics strategies for the context of building contractors. While studies highlight the potential of strategic approach to logistics on project and supply chain performance, the adaptation of logistics strategies in the construction sector, especially considering influential contextual factors, remains largely unexplored.

Current logistics strategy literature predominantly draws from the repetitive manufacturing industries, often in the United States, failing to account for the distinct challenges posed by project-oriented construction. This thesis addresses how building contractors should strategically design their logistics organizations, accounting for building contractors’ specific contextual factors and subsequently proposing logistics organization design configurations that align with their unique characteristics.

The purpose is to investigate building contractors’ logistics strategy content and process with a focus on how to design the logistics organization. To fulfil the purpose, the following three research questions are formulated:

RQ1. What contextual factors influence the design of building contractors’ logistics organizations?

RQ2. How do the identified contextual factors influence the design of building contractors’ logistics organizations?

RQ3. How should building contractors design their logistics organizations in response to the contextual factors?

In response to RQ1, a combination of conceptual research, case studies, and a questionnaire study were undertaken to identify contextual factors influencing building contractors' logistics organizations, including the number of strategic business units (SBUs), product characteristics, and production process characteristics. These factors influence logistics organization design elements in terms of the degree of centralization, formalization, integration, and division of labour.

To answer RQ2, a mix of conceptual research, case studies, and a questionnaire study were undertaken to investigate how contextual factors influence the logistics organization design element. The findings indicate that while product and production process characteristics influence logistics organization design, the impact of company size remains inconclusive. The findings challenge conventional understanding regarding the influence of company size on logistics organization design, emphasizing the central role of product characteristics, production processes, and the number of SBUs among building contractors.

In response to RQ3, case studies were used to classify several logistics organization design configurations determined by the building contractors' product characteristics, production process characteristics, and the number of SBUs. These configurations outline responses to product characteristics, production process characteristics, and the number of SBUs. For instance, configurations reflecting single business unit contractors with high logistics predictability favour a centralized logistics organization, while those involving multiple SBUs lean towards divisional logistics function structures. Furthermore, the findings highlight the feasibility and preference for hybrid configurations in aligning logistics organization design with the unique characteristics of building contractors, contributing insights valuable for adapting organizational structures in diverse operational contexts.

This thesis contributes to logistics organization design literature by explaining how contextual factors shape building contractors' logistics organizations. The focus on construction-specific contextual factors, such as the degree of pre-engineering (product characteristics) and off-site fabrication (production process characteristics), broadens the scope beyond repetitive manufacturing contexts. The suggested logistics organization structures and configurations provide a foundation for understanding logistics strategy in construction and similar engineer-to-order industries. However, generalization to other engineer-to-order sectors requires additional research.

The thesis highlights a lack of formalized logistics strategies among building contractors. The identified logistics organization structures and design configurations offer practical insights for initiating a strategic logistics process, thus contributing to construction logistics practice. However, while the thesis advances logistics organization design understanding, the need for further research remains. Future research avenues include investigating the impact of company size, exploring misfit consequences, developing key performance indicators, and refining the implementation process. The methodological approach suggests the need for practice-oriented research designs to actively apply and evaluate the thesis' concepts in real-world scenarios.

Place, publisher, year, edition, pages
Linköping: Linköping University Electronic Press, 2024. p. 65
Series
Linköping Studies in Science and Technology. Dissertations, ISSN 0345-7524 ; 2374
National Category
Construction Management
Identifiers
urn:nbn:se:liu:diva-201783 (URN)10.3384/9789180755306 (DOI)9789180755290 (ISBN)9789180755306 (ISBN)
Public defence
2024-04-12, K3, Kåkenhus, Campus Norrköping, Norrköping, 09:15 (Swedish)
Opponent
Supervisors
Available from: 2024-03-21 Created: 2024-03-21 Last updated: 2024-03-21Bibliographically approved

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Haglund, PetterJanné, Mats

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