Small and Medium-Sized Enterprises’ Perspectives Towards Construction Supply Chain Management and E-Commerce

Abstract

Small to medium-sized enterprises (SMEs) constitute the majority of firms in the construction industry and are therefore of prime importance in the construction supply chain. Despite this fact, little attention has been paid to SMEs with respect to supply chain management (SCM). SMEs in Australia were surveyed, via a postal questionnaire, to identify business strategies, current SCM practices, the concerns and the barriers that SMEs encountered in developing an integrated supply chain. Following the surveys, face-to-face interviews with construction professionals were also conducted to obtain their views on these issues and to seek strategies to overcome such barriers/concerns. Amongst the research outcomes it was found that the SMEs’ business strategies are mainly focused on improving profit growth, providing a high quality product and lowering total deliver costs. It is also found that the SCM practice by the SMEs typically aims to reduce the delivery time of materials, and determine customers’ future needs. On the other hand, the research found that at the same time SMEs are concerned with the lack of interest among suppliers and customers, lack of sophisticated information systems and competition from other supply chains. It is also found that the price/contract/project-based relationship between the main contractor and subcontractors is the main barrier hinders supply chain integration and management. However, the research found that SMEs do not seem to be concerned with a lack of trust and cooperation among supply chain members as this is usually covered by contractual relationships. It is found that there is a need to improve project coordination and information sharing, as well as shortening time to respond to requests for information. Further to these, the research found that the level of e-commerce practice by the SMEs has improved in recent years and this provides a good platform for the integration of SMEs into the construction supply chain through e-commerce. Despite the above provisos the findings reflected that supply chain integration is an important issue for construction SMEs and the use of compatible information system will increase the supply chain integration and management and hence improve the performance of the entire construction supply chain.