Abstract
The subcontracting procurement process is one of the most important issues impacting the costs of engineering projects and construction projects, in particular. Traditional procedures of subcontracting procurement tend to limit the opportunities for price negotiation and cooperative relationships between contractors and neglect potential issues such as engineering interface, construction risk, and waste. Based on case studies of construction projects, we propose a “lean” subcontracting procurement process (LSPP) drawing from lean construction theory. The process consists of a novel Seven-Arrangement operation plan and four types of standard operating flows. Not only does the proposed LSPP help sub-contractors eliminate various types of waste in construction projects, it also establishes a common information platform and cooperative environment that help participating contractors understand the work emphasis of each operation and the whole operation in sequence. As a result, the relationships between participating contractors become cooperative, potential risks in construction projects can be discovered early, and profits are shared between contractors. Thus, this process allows contractors to obtain long-term benefits.
Highlights
The subcontracting procurement process is one of the most important issues impacting the costs of construction projects and the whole construction industry for several reasons
The traditional process of procuring subcontractors tends to be based on price negotiation and price competition, with the goals of lowering the costs associated with labor, machine, and material; maintaining quality; and meeting the requirements of both the main contractor and the business owner
We focus on case studies of construction projects and propose a lean subcontracting procurement process (LSPP) based on lean construction theory
Summary
The subcontracting procurement process is one of the most important issues impacting the costs of construction projects and the whole construction industry for several reasons. Incomplete planning and insufficient consolidation of information lead to underestimated procurement times and create massive problems for the project participants downstream in the value chain by requiring more time, resources, material, manpower, and money All of this occurs in the absence of improved product quality or increased productivity. The traditional process of procuring subcontractors tends to be based on price negotiation and price competition, with the goals of lowering the costs associated with labor, machine, and material; maintaining quality; and meeting the requirements of both the main contractor and the business owner. The Seven-Arrangement operation plan is designed to help subcontractors eliminate various types of waste in construction projects. With the full implementation of the lean subcontracting procurement process, the goals of eliminating waste, decreasing risk, establishing cooperative relationships, maximizing value, and other long-term benefits can be achieved. Producing products earlier than specified by customers or in greater amounts than required Improper steps or stages in the workflow Improper storage of raw material, WIP (Work-In- Process), or finished product and improper sequence of use Improper transportation of parts or finished goods in the process flow Unable to make proper use of personnel or machine to add value to work
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