Logistics in construction: decision-making methods, features and prospects development

Abstract

The article examines the peculiarities of logistics in the construction industry. The prospects for the development of industry logistics are associated with the use of outsourcing in the supply of construction companies. Decisions on managing supply chains for construction materials are systematized, and decisions made by logistics providers and construction industry organizations are identified. The possibility of reducing the amount of costs in the activities of construction companies is proposed through the analysis of processes based on classical concepts and their transformation into logistic concepts of organization. Additionally, according to the concepts of key competencies and business process reengineering, it is proposed that companies establish the best source of competitive advantage by making key processes as efficient and cost-effective as possible, while non-key processes can be outsourced to gain additional competitive advantage. Businesses are interested in reducing inventory holding costs, as analysts confirm the fact that inventory storage costs companies at least 25% of their book value per year. The practice of applying logistics proves its effectiveness. In a number of works, data on the effectiveness of logistics have been published. In one of them it is noted that, according to experts (expert assessment), the use of logistics allows to reduce the level of stocks by 30–50%; reduce product movement time by 25–45%; reduce repeat warehouse transportation by 1.5–2.0 times; reduce costs for road transportation by 7–20%, and for rail transportation by up to 12%. Logistics, developing at enterprises of various branches of the economy, acquires specific branch features. In construction, it has a number of features, among which the rather low level of logistics as a branch of the national economy of Ukraine stands out. To optimize costs in the supply chain, it is recommended to consider various decisions made by both the construction company being serviced and the logistics provider. Specifically, the construction company is required to specify logistic service requirements that are determined by plans and schedules for construction work, specifications dictated by construction technology, as well as cost, time, and quality characteristics of the expected service.