Supply chain cost model for prefabricated building material based on time-driven activity-based costing

Abstract

The effect of ‘supply chain management’ can be leveraged when benefits of collaboration within and beyond the capacities of individual organizations are witnessed. One of the primary tasks in reducing total supply chain costs is to understand where the costs occur in a supply chain and how each activity impacts the total supply chain costs. Most supply chains in construction usually involve multiple entities, each one in a different process. A rebar supply chain is one example where many entities are involved in different processes. The supply chain coordinator needs a supply chain cost model, which shows how each activity impacts all supply chain costs to reduce the total costs. The research suggests a supply chain cost model using time-driven activity-based costing. The proposed cost model was applied to a building construction project, followed by sensitivity analysis identifying critical activities. This method can be adapted to analyze other fragmented material supply chains in the construction industry.