Construction Logistics Survey

[Insert WRAP programme area / Final or interim report here]

Efficient Construction Logistics

This report identifies the range of current methods and techniques of construction logistics being used, both traditional and alternative, and the role they can play in reducing material waste. It shows what is driving their use and what the barriers are to their increased uptake. The report will inform WRAP’s work in this sector to ensure efforts are focused on the logistics methods where immediate and long-term gains can be made.

Project code: WAS004-001 ISBN: [Add reference]

Research date: September 2006 – January 2007 Date: DRAFT 23rd January 2007

Front cover photograph: <This is an agency photo. Does WRAP have anything else suitable?>

[Insert appropriate disclaimer here]

Published by

Waste & Resources The Old Academy Tel: 01295 819 900 Helpline freephone

Action Programme 21 Horse Fair Fax: 01295 819 911 0808 100 2040

Banbury, Oxon E-mail: [email protected]

OX16 0AH

Efficient Construction Logistics 1

Executive summary

This report identifies the range of current methods and techniques of construction logistics being used, both

traditional and alternative, and the role they can play in reducing material waste. It shows what is driving their

use and what the barriers are to their increased uptake. The report will inform WRAP’s work in this sector to

ensure efforts are focused on the logistics methods where immediate and long-term gains can be made.

The context is WRAP’s 2006 – 2008 business plan, which is to:

� Divert 1.7m tonnes of construction waste from landfill or avoided primary extraction

� Influence the procurement of £10bn value of projects so that requirements are set for waste minimisation, recycling or recycled content

� Assist the construction sector to realise £50m savings by minimising site waste and recycling more.

The research included a desk study, logistics conference, interviews and workshops with logistics suppliers,

constructors and manufacturers, an online industry survey and a survey of CO2 generated by various logistics

methods.

Waste and logistics

There is compelling evidence that on a typical construction project about 15% of the material supplied to the site

(by value) is not incorporated in the construction and is therefore wasted. The interviews, workshops and online

survey show that there is wide agreement that better logistics would have a substantial effect on minimising

waste before it arises from the construction process.

The reasons found for waste arising in construction are:

Reasons Estimated impact by percentage of value of materials received

Over-ordering 5-10%

Damage 3-25%

Off-cuts 5-20%

Packaging (both

inappropriate and poor)

1-5%

Design Change 1-5%

Programming and Planning 1-10%

The drivers for improving construction logistics are the traditional drivers of time and cost, but a new driver has

emerged – the environment.

Methods and techniques of logistics

There are four basic methods of logistics used in the construction industry:

Method Which is Used by

Traditional

Method 1: The business goes to the supplier to pick up materials About 10% of the industry

Method 2: The business has materials delivered to site About 50% of the industry

Method 3: The business uses portfolio analysis to segment ordering

processes and call off arrangements

About 35% of the industry

Alternative

Method 4: The business co-ordinates a start-to-end process and tags

information, people and materials flows.

About 5% of the industry

An assessment of the potential impact on waste arisings and CO2 emissions shows that the greatest potential

benefits lie in moving the large constructors using method 3 to method 4.


In the alternative method there are seven main techniques:

Logistics planning across

full supply chain

Constructors have professionally trained logisticians who can plan across the

ranging, procurement, storage, distribution and back loading activities

Consolidation centre A distribution facility for materials that receives materials, equipment and plant

and delivers to the sites in consolidated loads

Just-in-time delivery to

work place

A service of frequent deliveries in work packs, 'pulled' just in time for the trade to

perform the next task

4th party logistics (4PL) A service to co-ordinate other logistics providers where there is more than one

supply chain

Logistics specialist on site A service to receive deliveries and distribute materials, equipment and plant - just

in time - so that operatives handle materials only when assembling or installing

Demand smoothing A service to enable the peaks and troughs in demand to be evened out over a

period of time

Integrated ICT system

across full supply chain

An interoperable information system that tags and tracks materials through take

off, manufacture, distribution, assembly and installation.

Conclusions and recommendations emerge from analysing the potential impact and timeframes of the techniques

and assessing the potential for change in various sectors and segments of the construction industry.

Recommendations The prime objective should be to influence procurement so that the tonnage diverted from landfill and money

savings can be achieved.

As a general rule, civil engineering is less wasteful than building because it already practices JIT (concrete,

aggregates, cabling, etc) and it has become adept at recycling waste either within the project or elsewhere.

Therefore the recommendations refer mainly to building.

The over-arching principles are:

� Make the business case for minimising waste

� Make logistics planning the norm

� Set up start-to-end information systems that include tag and track

� Understand the construction process and apply ‘lean’ principles.

Actions to see results within a year

The business case and logistics planning are the guiding principles for short-term gains.

In order to influence at least £10bn of procurement, WRAP should focus on new-build and refurbishment projects

in the following sectors and segments:

� Public – housing, schools, health, and central government and agencies including defence, prisons and police

� Private – housing and retail.

WRAP should focus on reducing the waste arising from over-ordering, damage, design change, and planning and

programming by encouraging take up of these alternative logistics techniques:

� Logistics planning across the full supply chain

� Consolidation centres

� Logistics specialist on site

� JIT delivery to the workplace.

Of these, logistics planning is the top priority because the need for consolidation and logistics specialist on site

will emerge from this action. JIT will follow as a consequence but this must be specified in the logistics plans.

Constructing Excellence is preparing a template for logistics planning and aims to have this ready for consultation

by the end of March 2007.

A two-pronged approach is needed to:

� Convince clients about the business case and to demand change from their main contractors

� Educate the main contractors (and their supply chain) about the business case and techniques that will deliver.


The risk of delay is a big driver to over-ordering. Therefore part of the solution is to ease penalties on trade

contractors (which some informed developers are already doing).

Unlike existing contracts with hauliers, contracts with logistics contractors need to reflect their involvement in the

risks of delivering the whole project.

Actions to see longer-term results

WRAP’s second strand of actions should focus on the long term. It should commence immediately and run

concurrently with the short term programme. Integrated ICT systems and lean processes are the guiding

principles for long-term gains. The work should also roll out gains pioneered in the short-term campaign.

The extra alternative techniques that should be encouraged in the medium/long term are:

� Integrated ICT.

� Demand smoothing

� 4th Party Logistics

� Off-site construction. Integrated ICT and off-site construction will alleviate the remaining reason for waste – off cuts – as well as over-

ordering, damage, design change, and planning and programming.

The recommended actions are all aimed at minimising waste. None of these actions (except perhaps

consolidation and onsite logistics team) will have any appreciable effect on the level of packaging. Evidence from

the workshops shows that the level of packaging is already finely balanced between the minimum needed to

ensure safe delivery and what is needed to survive the abuse suffered on site. Hence, although there have been

some advances in making packaging reusable (such as stillages for delivering windows), minimising packaging

waste will be difficult. Therefore WRAP needs to influence regulations and incentives that will encourage

suppliers to take responsibility for reusing and recycling packaging.


Contents

1.0 Introduction .......................................................................................................................... 5 1.1 Brief...................................................................................................................................5 1.2 The project.........................................................................................................................6

2.0 Methods of logistics............................................................................................................... 7 3.0 Logistics providers............................................................................................................... 11 4.0 Analysis ............................................................................................................................... 13

4.1 Methods by sector and segment .........................................................................................13 4.2 Potential to reduce waste and carbon dioxide emissions .......................................................15 4.3 Potential impacts of techniques and time frames..................................................................16

5.0 Conclusions ......................................................................................................................... 17 5.1 Focus on industry sectors and segments .............................................................................17 5.2 Focus on logistics methods and alternative techniques..........................................................20 5.3 Focus on stakeholders .......................................................................................................22

6.0 Recommendations ............................................................................................................... 25 Appendix 1: Research activities and outcomes................................................................................ 28 Appendix 2: CO2 survey ................................................................................................................... 60 Appendix 3: Logistics providers....................................................................................................... 65


1.0 Introduction

1.1 Brief WRAP’s Tender Invitation dated July 2006 outlines the scope of work as follows:

The aim of this work is to identify the range of current methods of construction logistics being used, both

traditional and alternative, and the role they can play in reducing material wastage. The project should identify

what is driving their use and what the barriers are to their increased uptake. The project deliverable will be used

to inform WRAP’s work in this sector to ensure efforts are focused on the logistic methods where the largest

gains can be made.

The project will also be used to start building a sound evidence base, which can be used to advocate the use of

these techniques to reduce construction material wastage. The project will, as a minimum, provide the

information outlined below:

� Overview of the traditional and alternate methods of construction logistics market to include the level of usage, the situations when these services are most appropriate, who is providing the service, which

construction sectors are utilising these techniques, the benefits of and drivers for use and the barriers to greater uptake.

� Identify the key grouping of stakeholders in construction logistics, representing industry bodies, manufacturers, contractors, logistic providers and provide key contact details.

� Identify and categorise the various logistic options which are currently used in the UK construction industry and provide a description of each and examples from typical sectors.

� For each of the logistic categories identified above define:

• the current level of usage as a proportion of the overall market share

• the construction sectors they are used in (for example housing, leisure, retail, health etc.), with the

relevant market share of this sector

• the providers of these services including contact details

• the specific benefits of and drivers for their use

• the specific barriers to further uptake

• indicative effect on material wastage levels (for bench marking against traditional practices), and how

this varies from sector to sector

• the potential to apply to other construction sectors where not currently used

• whether it is likely to have an increased or reduced level of impact on CO2 impact due to transport

mileage.

� Identify logistics methods which could be used as exemplars of the benefits of their use in minimising material wastage.

� Analyses of the collated data and recommendations for the key areas where WRAP should target to deliver a decrease in material wastage in the construction sector through the use of alternate logistics methods.

WRAP’s business objectives

In its 2006 – 2008 business plan, WRAP intends to:

� Divert 1.7m tonnes of construction waste from landfill or avoided primary extraction

� Influence the procurement of £10bn value of projects so that requirements are set for waste minimisation, recycling or recycled content

� Assist the construction sector to realise £50m savings by minimising site waste and recycling more.


1.2 The project The following research activities and outcomes are summarised in Appendix 1:

� Desk study

� Logistics conference

� Workshops

� Industry survey

� CO2 survey.


2.0 Methods of logistics

Constructing Excellence established, through interviews and workshops, that constructors use four basic methods of logistics:

Table 1: Methods of logistics

Traditional

Method 1: The business goes to the supplier to pick up materials

Method 2: The business has materials delivered to site

Method 3: The business uses portfolio analysis to segment ordering processes and call off arrangements

Alternative

Method 4: The business co-ordinates a start-to-end process and tags information, people and materials

flows.

Method 1:

This is used by a business that takes orders on a jobbing basis and will then visits trade outlets to procure

materials piecemeal.

Method 2:

This is used by a business that has materials delivered to the site, typically larger projects with a bulk delivery

requirement supplied by trade outlets.

Method 3:

This is used by a larger business with a multi-project programme that can procure materials on a company basis.

Companies may have consolidated accounts or supply bases to improve/reduce administration costs and/or

materials costs through preferential volume discount. Materials will be delivered to site, however the

differentiator between methods 2 and 3 is that waste is reduced by improved processes.

Method 4:

This is used by a business that co-ordinates a start-to-end process and tags information, people and material

flows. Logistics for this type of organisation will include bills of materials produced by software linked to design

and they will most likely provide multiparty procurement deals for projects and apply volume discounts to total

project/programme turnover. Software is in place to share information and co-ordinate activities such as

ordering, warehousing, deliveries and invoicing.

Methods 1-3 are deemed traditional and method 4 is an alternative arrangement not commonly seen. Typically

methods 1-3 will use hauliers to provide transport between each step. Method four will use a logistics contractor

that will aid the application of timely resources.

Many companies, large and small, will use several of these methods on a project. From the main contractor’s

point of view, looking along the tiers in the supply chain the methods revert to lower order models. The caveat is

that the supply chain is a diamond and the levels of sophistication can rise again near the primary industry.

The drivers and barriers to a constructor adopting these methods are:

Table 2: Methods - drivers and barriers

Method Drivers Barriers

Method 1: The business

goes to the supplier to pick

up materials

Simple and flexible

Requires minimal planning

No barriers – this is the entry level


has materials delivered to

site

Minimise own fleet and save time

Suits larger organisation

Potential use or return service

Inability or reluctance to plan ahead

Lack of critical mass


uses portfolio analysis to

segment ordering

processes and call off

arrangements

Potential to save money by strategic

buying and simplified administration

Inability or reluctance to plan ahead

Lack of critical mass



co-ordinates a start-to-end

process and tags

information, people and

materials flows.

Understand process and hidden costs in

traditional methods

Increasing environmental constraints

Clients’ expectations

Potential saving in materials (up to

15%)

Set-up costs

Unaware of business case

Relationships that do not encourage

shared risk, open book, etc.

Alternative techniques

Constructing Excellence established, through interviews and workshops, that there are seven techniques which

characterise the alternative method 4:

Table 3: Alternative logistics techniques

Logistics planning across

full supply chain

Constructors have professionally trained logisticians who can plan across the

ranging, procurement, storage, distribution and back loading activities

Consolidation centre A distribution facility for materials that receives materials, equipment and plant

and delivers to the sites in consolidated loads


work place

A service of frequent deliveries in work packs, 'pulled' just in time for the trade to

perform the next task

4th party logistics (4PL) A service to co-ordinate other logistics providers where there is more than one

supply chain

Logistics specialist on site A service to receive deliveries and distribute materials, equipment and plant - just

in time - so that operatives handle materials only when assembling or installing

Demand smoothing A service to enable the peaks and troughs in demand to be evened out over a

period of time



An interoperable1 information system that tags and tracks materials through take

off, manufacture, distribution, assembly and installation.

The logistics providers and manufacturers often used these terms but with significant differences and maturity

compared to the constructors:

Table 4: Different views on the alternative techniques

Techniques Constructors Logistics contractor Manufacturers

Logistics planning

across full supply

chain

The site team will plan all

infrastructure process

needed to deliver projects

Uses ICT and modelling to

integrate resources

Uses ICT and modelling to

integrate resources

Consolidation centre The use of a space to

deliver today the materials

for tomorrow. The centre

is also used a buffer

between variable process

steps.

The use of regional and

national distribution

centres to store goods for

final distribution

The use of warehousing to

manage inventory until it

can be delivered


work place

A contractor using

methods 1-3 would say JIT

means a planned delivery

turns up on time. A

contractor using method 4

would connect the delivery

time to the immediate

need for the material.

Synchronised information

and materials flows in

process steps

Using haulers or logistics

providers to deliver material

via networks to wholesalers

(60%) or direct to site

(40%)

4th party logistics Managing logistics agent to

pull together logistics

operations.

The logistics contractor

manages activity from

procurement to delivery

and backhauling. The

contractor will have the

skills to manage the

process steps

N/A

1 ICT systems that operate on different platforms and enable seamless communication


Logistics specialist on

site

The logistics contractor on

site provides services to

co-ordinate deliveries with

trade contractors and to

distribute to work places.

These contractors may also

supply security and health

and safety services.

N/A Materials suppliers only

focus on delivery to site.

There are many cases

where a supplier will install

and commission plant and

equipment.

Demand smoothing Views peaks in demand

and seeks opportunities to

reduce resource by

flattening process peaks.

This applies to

programmes of work and

sequences of processes or

trade contractor interfaces

Views peaks in demand

and seeks opportunities to

reduce resource by


Views peaks in demand and

seeks opportunities to

reduce resource by



across full supply

chain

Integrated ICT systems to

provide take off design and

procurement, etc. Many

systems exist in the

industry but very little use

of a full start-to-end use.

The logistics sector has

many similarities to

construction but uses

systems to co-ordinate

activities across many

steps. These systems

reduce handling of goods

to the absolute minimum

The use of MRP II systems

to plan factory time and out

put. Typically order

systems are not connected

to MRP systems

The drivers for improving construction logistics are the traditional drivers of time and cost, but a new driver has

emerged – the environment. The drivers and barriers to a constructor adopting these techniques are:

Table 5: Alternative techniques - drivers and barriers

Techniques Drivers Barriers

Logistics planning across full supply chain

Public pressure

Regulators

Clients

Inertia

Fire-fighting culture

Fragmented industry

Consolidation centre Congestion

Potential to improve productivity

Need to engage suppliers in new way of

working

Perceived cost

Uncertainty about business case


work place Better productivity

Need for synchronisation of supply and

demand along the whole supply chain

Fear that system will not deliver and

consequence for contractual obligations

and penalties

Need to challenge supply chain to

improve

4th party logistics Need for co-ordination of complex,

multi-strand supply chains

Belief that constructor can handle it in-

house

Introducing a new concept


site Congestion

Productivity

Specialist can also manage security,

welfare and some health and safety

duties

Potential reduction in whole-site head

count

Perceived cost

Trade contractors do not understand the

value of this shared service

Demand smoothing Larger procurement programmes

Potential to reduce mobilisation costs

and benefit from long-term purchasing

agreements

Too many single concurrent projects

overloading industry’s ability to deliver

Unable to analyse or appreciate the

benefits



across full supply chain Belief that ICT/integration is key to

improvement

Desire to minimise material and people

resources by maximising information

Lack of exemplars in construction

Big investment and long lead time

Perceived risk of failure

Worry that systems will not work

together

Perception that cost control is removed

and losing the ability to manage risks

and profits.

Some exemplars of the alternative techniques exist in the construction industry. Exemplars are also offered from

other industries.

Table 6: Exemplars of alternative techniques

Techniques Exemplars in

construction

Construction sector &

segment

Exemplars in other

industries

Logistics planning

across full supply chain Heathrow T5 Private/airports & ports Toyota, Honda, Asda

Walmart, Tesco, etc.

Consolidation centre London Construction

Consolidation Centre

Heathrow Consolidation

Centre

GlaxoSmithKlein

Manchester City Council

Impress Store

United House

Private/commercial

Private/airports & ports

Private/industrial

Public/housing

Public/housing refurb

Wolseley

Just-in-time delivery to work place

Mid City Place

Heathrow Terminals 1-4

Private/commercial


Automotive

4th party logistics T5

Central London


Private/commercial

TBA


site Mid City Place and various

other Stanhope

developments in central

London

Private/commercial

Demand smoothing Framework agreements

such as RSLs, Kelly

Construction Group

Public sector Toyota


across full supply chain BIW, Asite Retail and automotive


3.0 Logistics providers Constructing Excellence identified 31 logistics providers with a declared interest in the construction industry. These are listed in Appendix 3. Having established the scope of alternative methods of logistics, Constructing Excellence surveyed those logistics

contractors with a declared interest in construction to see which companies offered these techniques. The results

are in Table 7. Gaps indicate no response. In this table,

Logistics means "we plan, co-ordinate and operate the complete logistics service"

Haulier means "we are mainly involved in moving goods. Others do the planning and co-ordination"

1 means “we do this in construction”

2 means “we do this in another industry but not yet in construction”

3 means “we do not offer this service”.

It is important to recognise that some of the companies claiming to offer certain alternative techniques may not

have grasped the full implications of this claim (for example, a small company that claims to offer an integrated

ICT system across the full supply chain). Also, large companies that claim to offer these services in other

industries may be a valuable resource for transferring tried and proven techniques to construction. However, the

learning curve for such transfers may be steep; what works in say retailing may not be readily transferable to

construction due to either different processes or ingrained resistance to change.

<it is proposed to reduce this list after one more request for details>

Table 7: Logistics providers and services they offer

Company Service Logistic

planning

Consolidation JIT 4PL Onsite

logistics

Demand

smoothing

Integrated

ICT

Ranked in the top 100 logistics contractors:

DHL Logistics

Wincanton

Full

logistics

1 2 1 1 2 1 2

Kuehne & Nagel

Full

logistics

2 2 2 2 2 2 2

TNT

Logistics UK

Gist

NYK Logistics (UK)

Eddie

Stobart

WH

Malcolm

ANC Group

Innovate Logistics

Lloyd Fraser

Logistics

Full

logistics

2 2 2 2 2 2 2

Stiller

Group

Full

logistics

1 1 1 1 1 1 1

Canute

Haulage Group

Full

logistics

1 2 2 3 3 2 3

Hanbury

Davies

Currie European Transport

Sutton & Son

Comment [A1]: In the final version of the report we will eliminate all companies that are hauliers only, but we will retain this classification until the returns are practically complete.


Company Service Logistic

planning

Consolidation JIT 4PL Onsite

logistics

Demand

smoothing

Integrated

ICT

CM

Downton

TM

Logistics

Rhys Davies

Seafield

Logistics

Maxi

Haulage

Aspray

Transport

Erith

Haulage Co

Not ranked in top 100 but known to be active in construction:

CSB

Logistics

Full

logistics

1 1 1 1 1 1 1

Christian

Salvesen

CAT

Logistics

Wilson

James

Full

logistics

1 1 1 1 1 1 3

Clipfine

Elliot

Thomas

Full

logistics

1 3 1 1 1 1 1

Wyse

Logistics

Full

logistics

1 1 1 1 1 1 3

ASITE

BIW

Comment [A1]: In the final version of the report we will eliminate all companies that are hauliers only, but we will retain this classification until the returns are practically complete.


4.0 Analysis 4.1 Methods by sector and segment Constructing Excellence used the sector analysis from the desk study to create a matrix that shows the distribution of the four methods of logistics across the sectors and segments. The segments are sub-divided into new-build,

refurbishment, and repair and maintenance. The workshops considered initial estimates of the distribution of the methods shown in Table 8. Delegates

questioned and challenged the assumptions. Their most significant criticism was that the incidence of Method 1

was underestimated. This observation reveals that, in even the most sophisticated projects, there is a significant

proportion of small trade contractors still using this entry-level method of logistics when a higher level method is

not (or cannot be) imposed on them by the main contractor.

The estimated use of logistics methods is by proportion. For example the estimated use of method 1 in new-

build public housing is 25% (0.25). The values of construction in each segment are taken from Construction

Industry Segmentation and Analysis, AMA Research Ltd, 2006. The value of construction in each segment is the

product of the proportion by method and the value of the segment. For example the value of method 1 new-

build public housing is £2.6bn x 0.25 = £0.65bn. Constructing Excellence estimated the levels of waste shown

thus “x” and where the survey (Q16) suggested a different level this is shown thus “(x)”.

Table 8: Use of logistics methods by sector and segment

Sector Segment Estimated use of

logistics methods

Values of construction Waste

New Refurb RMI New Refurb RMI Total

<

15%

~

15%

>

15%

Public Housing 2.6 1.2 7.1 11 (x) x

Method 1 0.25 0.25 0.5 0.65 0.3 3.55 4.5

Method 2 0.5 0.5 0.5 1.3 0.6 3.55 5.45

Method 3 0.25 0.25 0.65 0.3 0 0.95

Method 4 0 0 0 0

Public Schools 3.5 2.3 2.8 8.6 x

Method 1 0.25 0 0 0.7 0.7

Method 2 0.75 0.75 0.75 2.625 1.725 2.1 6.45

Method 3 0.25 0.25 0.875 0.575 0 1.45

Method 4 0 0 0 0

Public Universities 0.8 0.6 0.7 2.1 (x) x

Method 1 0 0 0 0

Method 2 0.25 0.75 0.5 0.2 0.45 0.35 1

Method 3 0.75 0.25 0.5 0.6 0.15 0.35 1.1

Method 4 0 0 0 0

Public Health 2.6 0.8 1.5 4.9 x

Method 1 0 0 0 0

Method 2 0.5 0.5 0.75 1.3 0.4 1.125 2.825

Method 3 0.5 0.5 0.25 1.3 0.4 0.375 2.075

Method 4 0 0 0 0

Public Roads 0.8 1.4 0.9 3.1 x

Method 1 0.05 0.05 0.05 0.04 0.07 0.045 0.155

Method 2 0.5 0.5 0.1 0.4 0.7 0.09 1.19

Method 3 0.3 0.3 0.6 0.24 0.42 0.54 1.2

Method 4 0.15 0.15 0.25 0.12 0.21 0.225 0.555

Public Railways 0.4 0.8 1.3 2.5 x

Method 1 0 0 0 0

Method 2 0.25 0.25 0.1 0.2 0 0.3

Method 3 0.5 0.75 0.75 0.2 0.6 0.975 1.775

Method 4 0.25 0 0.25 0.1 0 0.325 0.425


Public Central Government

and Agencies including defence,

prisons and police

0.8 0.5 0.7 2

(x) x

Method 1 0 0 0 0

Method 2 0.5 0.5 0.75 0.4 0.25 0.525 1.175

Method 3 0.5 0.5 0.25 0.4 0.25 0.175 0.825

Method 4 0 0 0 0

Private Housing 16.8 0.4 15.2 31.7 x

Method 1 0.15 0.15 0.1 2.52 0.06 1.52 4.1

Method 2 0.6 0.65 0.4 10.08 0.26 6.08 16.42

Method 3 0.25 0.25 0.4 4.2 0.1 6.08 10.38

Method 4 0.05 0.05 0.1 0.84 0.02 1.52 2.38

Private Commercial 4.5 1.6 3 9.1 x

Method 1 0.25 0.1 1.125 0.16 0 1.285

Method 2 0.5 0.2 0.75 2.25 0.32 2.25 4.82

Method 3 0.2 0.5 0.25 0.9 0.8 0.75 2.45

Method 4 0.05 0.2 0.225 0.32 0 0.545

Private Retail 2.6 1.9 3.5 8 x (x)

Method 1 0 0 0 0

Method 2 0.25 0.25 0.5 0.65 0.475 1.75 2.875

Method 3 0.75 0.75 0.5 1.95 1.425 1.75 5.125

Method 4 0 0 0 0

Private Leisure 1 2.1 2 5.1 x

Method 1 0 0 0 0

Method 2 0.5 0.5 0.5 0.5 1.05 1 2.55

Method 3 0.5 0.5 0.5 0.5 1.05 1 2.55

Method 4 0 0 0 0

Private Utilities 0.8 1.2 1.5 3.5 x

Method 1 0 0 0 0

Method 2 0.25 0.25 0.5 0.2 0.3 0.75 1.25

Method 3 0.75 0.75 0.5 0.6 0.9 0.75 2.25

Method 4 0 0 0 0

Private Airports and

ports

0.9 0.1 0.3 1.3 x (x)

Method 1 0.1 0.1 0.09 0.01 0 0.1

Method 2 0.4 0.4 0.36 0.04 0 0.4

Method 3 0.4 0.4 0.5 0.36 0.04 0.15 0.55

Method 4 0.1 0.1 0.5 0.09 0.01 0.15 0.25

Private Industrial 3.7 0.2 0.7 4.6 x

Method 1 0.1 0.1 0.37 0.02 0 0.39

Method 2 0.5 0.5 1.85 0.1 0 1.95

Method 3 0.3 0.3 0.75 1.11 0.06 0.525 1.695

Method 4 0.1 0.1 0.25 0.37 0.02 0.175 0.565

VALUES

Method 1 11.23

Method 2 48.655

Method 3 34.375

Method 4 4.72

Total 98.98


4.2 Potential to reduce waste and carbon dioxide emissions Constructing Excellence assessed the impact on CO2 and waste reduction to compare the potential gains from migrating to a higher method of logistics. Assumptions: CO2 level is derived from the CO2 survey, see Appendix 2. Waste indices are anecdotal as no

reliable measurements exist.

Table 9: Potential CO2 and waste gains by migrating logistics methods

Method How they do logistics CO2 level Encourage Waste Encourage

1

Business that goes to

wholesaler to pick up

materials

1

1

2 Business that has materials

delivered to site 0.66 1

3

Business that uses

portfolio analysis to

segment ordering

processes and has call off

arrangements

0.66

0.9

4

Businesses that co-

ordinate a start-to-end

process and tag, people,

information and materials

flows

0.33 0.5

In terms of both CO2 reduction and waste reduction, moving from method 3 to 4 offers the best overall result.

In terms of CO2 reduction, there is no advantage in moving from method 2 to 3. And the potential to reduce

waste is small.

In terms of waste reduction, there is no advantage in moving from method 1 to 2. This therefore eliminates the

small contractors (a difficult group to influence) from the change focus.

In summary, this analysis indicates the focus should be on moving the major projects and contractors from

logistics method 3 to method 4. This is also the smallest and easiest group to influence.


4.3 Potential impacts of techniques and time frames Constructing Excellence assessed the potential impact of the various alternative techniques in method 4 and the timeframes needed to see results. By the third workshop, the list of alternatives was fixed and delegates were asked their views on the potential

impacts and timescales. There were no significant criticisms of the assessment offered by the researchers.

In this table, the potential impact on waste is assessed as high, medium or low. Timescales are assessed as

short (< 1 year), medium (< 3 years> and long (> 3 years).

Although not a logistics technique, off-site construction is included in this table because it was frequently

mentioned in the workshops and the survey, and because it would demand a change in logistics.

The techniques in this table are ranked starting with the greater potential impact and shorter timescales.

Table 10: Alternative techniques - potential impact on waste and timescales

Alternative technique Potential Timescale

Logistics planning across full supply

chain

High Short

Consolidation centre High Short

Logistics specialist on site Medium Short

Just-in-time delivery to work place High Medium

Demand smoothing High Medium

4th party logistics Medium Medium

Off-site construction Medium Medium

Integrated ICT system across full

supply chain

High Long


5.0 Conclusions

5.1 Focus on industry sectors and segments Applying selection criteria to the analysis of sectors and segments (see 4.1) indicates which industry sectors and segments offer the most potential for minimising construction waste.

The selection criteria used in this analysis are:

� Segments with a significant value of construction using method 3 logistics

� Segments that produce ~15% or more waste

� Segments where there is a relatively small number of major constructors that could (as a group) be more easily influenced than segments with a large number of smaller constructors (this will exclude repair and

maintenance work).

Table 11 shows the results. For example the potential value of procurement that could be influenced in public

housing is £0.65bn (new build) + £0.3bn (refurb) = £0.95bn annually.

Table 11: Selecting sectors and segments

Sector Segment Values of construction £bn Waste

New Refurb RMI Total

<

15%

~

15%

>

15%

Potential value of

selected segments

£bn

Public Housing 2.6 1.2 7.1 11 (x) x

Method 1 0.65 0.3 3.55 4.5

Method 2 1.3 0.6 3.55 5.45

Method 3 0.65 0.3 0 0.95 0.95

Method 4 0 0 0 0

Public Schools 3.5 2.3 2.8 8.6 x

Method 1 0 0 0.7 0.7

Method 2 2.625 1.725 2.1 6.45

Method 3 0.875 0.575 0 1.45 1.45

Method 4 0 0 0 0

Public Universities 0.8 0.6 0.7 2.1 (x) x

Method 1 0 0 0 0

Method 2 0.2 0.45 0.35 1

Method 3 0.6 0.15 0.35 1.1

Method 4 0 0 0 0

Public Health 2.6 0.8 1.5 4.9 x

Method 1 0 0 0 0

Method 2 1.3 0.4 1.125 2.825

Method 3 1.3 0.4 0.375 2.075 1.70

Method 4 0 0 0 0

Public Roads 0.8 1.4 0.9 3.1 x

Method 1 0.04 0.07 0.045 0.155

Method 2 0.4 0.7 0.09 1.19

Method 3 0.24 0.42 0.54 1.2

Method 4 0.12 0.21 0.225 0.555

Public Railways 0.4 0.8 1.3 2.5 x

Method 1 0 0 0 0

Method 2 0.1 0.2 0 0.3

Method 3 0.2 0.6 0.975 1.775

Method 4 0.1 0 0.325 0.425


Public Central Government

and Agencies including defence,

prisons and police

0.8 0.5 0.7 2

(x) x

Method 1 0 0 0 0

Method 2 0.4 0.25 0.525 1.175

Method 3 0.4 0.25 0.175 0.825 0.65

Method 4 0 0 0 0

Private Housing 16.8 0.4 15.2 31.7 x

Method 1 2.52 0.06 1.52 4.1

Method 2 10.08 0.26 6.08 16.42

Method 3 4.2 0.1 6.08 10.38 4.30

Method 4 0.84 0.02 1.52 2.38

Private Commercial 4.5 1.6 3 9.1 x

Method 1 1.125 0.16 0 1.285

Method 2 2.25 0.32 2.25 4.82

Method 3 0.9 0.8 0.75 2.45

Method 4 0.225 0.32 0 0.545

Private Retail 2.6 1.9 3.5 8 x (x)

Method 1 0 0 0 0

Method 2 0.65 0.475 1.75 2.875

Method 3 1.95 1.425 1.75 5.125 3.37

Method 4 0 0 0 0

Private Leisure 1 2.1 2 5.1 x

Method 1 0 0 0 0

Method 2 0.5 1.05 1 2.55

Method 3 0.5 1.05 1 2.55

Method 4 0 0 0 0

Private Utilities 0.8 1.2 1.5 3.5 x

Method 1 0 0 0 0

Method 2 0.2 0.3 0.75 1.25

Method 3 0.6 0.9 0.75 2.25

Method 4 0 0 0 0

Private Airports and

ports

0.9 0.1 0.3 1.3 x (x)

Method 1 0.09 0.01 0 0.1

Method 2 0.36 0.04 0 0.4

Method 3 0.36 0.04 0.15 0.55

Method 4 0.09 0.01 0.15 0.25

Private Industrial 3.7 0.2 0.7 4.6 x

Method 1 0.37 0.02 0 0.39

Method 2 1.85 0.1 0 1.95

Method 3 1.11 0.06 0.525 1.695

Method 4 0.37 0.02 0.175 0.565

VALUES

Method 1 11.23

Method 2 48.655

Method 3 34.375

Method 4 4.72

Total 98.98


In summary, the sectors and segments to target are:

Table 12: Target sectors and segments

Sector Segment Value £bn

Public Housing 0.95

Schools 1.45

Health 1.70

Central Government and

Agencies including defence,

prisons and police

0.65

Private Housing 4.30

Retail 3.37

Total 12.42

This would assist WRAP to influence £10bn of construction. The table offers figures for selecting further

segments if WRAP needs a wider campaign.


5.2 Focus on logistics methods and alternative techniques Having concluded that moving from method 3 to method 4 offers the greatest impact on both waste arisings and CO2 emissions (see 4.2), the focus moves to deciding which alternative techniques offer the best potential gains, with particular emphasis on the short timescale.

Table 13 shows the six reasons why materials are wasted in construction, from Appendix 1.

Table 13: Reasons waste arises on construction

Reasons Estimated impact by percentage of value of materials received

Over-ordering 5-10%

Damage 3-25%

Off-cuts 5-20%

Packaging (both


1-5%

Design Change 1-5%

Programming and Planning 1-10%

Table 14 shows the potential impact that the alternative logistics techniques could have on the reasons for waste.

Table 14: Impact of techniques on reasons for waste

Alternative technique Over-

ordering

Damage Off

cuts

Packaging Design

change

Programming and

planning

Logistics planning


High High Low Low High High

Consolidation centre High High Low Medium Low High


site

Medium High Medium Medium Low High


work place

High High Low Low High High

Demand smoothing High Low Low Low Medium High

4th party logistics High High Low Medium Low High

Off-site construction Medium High High Low Medium High



High Medium High Medium High High

Note that the impact of logistics methods to minimise waste from packaging is generally low because the balance

between the minimum needed for delivery and survival on site is already finely balanced. The manufacturers are

already subject to the Packaging and Waste Regulations. However, the ‘disconnection’ seems to be what

happens after delivery. It would therefore be better to focus on reuse and recycling of packaging.

Actions that should achieve results within a year

From table 10, consider:

Logistics planning across full supply

chain

High impact Short timeframe

Consolidation centre High impact Short timeframe

Logistics specialist on site Medium impact Short timeframe

Just-in-time delivery to work place High impact Medium timeframe

It is universally accepted that the more effort put into planning, the better the outcomes. Logistics is based on

rigorous assessment of the need for materials, co-ordinating the manufacture and distribution. In essence,

logistics planning is the number one solution, as borne out in the workshops and industry survey. However, it is

not an easy discipline to impose in an industry that excels in fire fighting today’s problems.

When rigorously applied, JIT logistics is the most effective technique because, by definition, it permits delivery of

only those materials that are immediately required for construction. This simultaneously attacks four of the


reasons: over-ordering, damage, design change and programming and planning. But if considered in its own

right, there is a lack of tools and incentives to make it happen. That is why (on its own) it is assessed as a

medium timescale.

Case studies of Heathrow and Mid City Place show that the use of consolidation or logistics team on site has a

significant impact on JIT delivery. And when used together (such as at Stanhope’s central London sites that are

served by the London Construction Consolidation Centre (LCCC) they have a compounding effect on JIT and

therefore on waste. This is because consolidation and the onsite logistics team both employ Kanban systems to

‘pull’ materials when required and therefore enforce discipline and planning on a somewhat chaotic process.

The working exemplars that exist in the industry now offer springboards to implementing these techniques more

widely within a year.

Actions for longer term results

From table 10, consider:

Demand smoothing High impact Medium timeframe

4th party logistics Medium impact Medium timeframe

Off-site construction Medium impact Medium timeframe

Integrated ICT system across full

supply chain

High impact Long timeframe

These techniques all offer significant benefits and their practical implications will arise from a well executed

logistics plan. But none is likely to achieve results within a year.


5.3 Focus on stakeholders Following the conference, Constructing Excellence concluded that the main streams of activity needed to increase the impact of logistics on waste are:

� Making the business case for minimising waste

� Making logistics planning the norm

� Setting up start-to-end information systems that include tag and track

� Understanding the construction process and applying ‘lean’ principles.

Of these presenting the business case is essential to encourage greater take up of logistics planning. The

information and lean processes, although part of the business case and planning, will need a longer term to yield

results.

The construction industry is realising the benefits of integration because the change in thinking, as promoted in

the seminal reports Constructing the Team (Latham) and Rethinking Construction (Egan), have taken root. Many

key players have changed mindsets and are ready to ‘rethink’ logistics.

The business case is that up to 15% of the cost of materials could be saved if constructors could stop these

materials entering the value chain. The corollary is that of the 275 million tonnes of materials entering into built

environment per annum, the potentials saving in resources would be up to 40 million tonnes.

With better use of planning for logistics at the front end of the construction process and the associated

information flows and systems, waste could be minimised. This is because more accurate information regarding

quantities would indeed stop materials coming to site needlessly. To achieve this dividend the industry needs a

tipping point, led by the clients, to do the following:

� Produce a project logistics plan before any key appointment and ensure it reflects the client’s strategy and how information, materials and people will flow through processes. The plan will embrace alternative logistics

techniques that will respond to the client’s requirements and benefit the businesses in the supply chain and

the project.

� Move constructors from method 3 logistics (currently about 35% of industry) to method 4.

� Embrace the industry as an integrated supply chain.

� Measure the value in processes.

� Publicise and promote exemplars of alternative logistics.

� Use open book, target costs and risk and reward strategies in procurement. Extend to tier 1 and 2 suppliers and manufacturers to achieve the transparency needed to reward innovation and best practice.

The use of alternative logistics in the construction industry and its configuration will depend on client types and

project.

The unnecessary-cost drivers in the construction process could also be valued and reduce further the costs of

delivery. The unnecessary-cost drivers found in this research are the result of broken processes or lack of

evidenced-based management decisions. These are summarised below, together with the main causes of waste

and solutions discovered:

Table 15: Unnecessary-cost drivers, causes of waste and solutions

Affecting Unnecessary-cost

drivers

Root causes Solutions

People “Someone else’s problem”

Lack of duty of care

Lack of Motivation

Attitudes/Culture

Lack of team working and

integration

Lack of trust

Focus on task

Poor Management

Skills mix

Site management gulf

between tradesperson

and material costs

Theft and damage

Poor skills regarding cost

management

Fear of shortages

Lack of understanding

and fitting instructions

Awareness training

Higher performance

Logistics to instil

confidence

Toolbox talks on waste


Process Strategic planning

Balancing of materials

supply

Contractual relationships

Tendering, take and Sales

push

Variance in performance

between process steps

Not understanding

upstream and down

stream processes and

interfaces

Volume discounts

Understanding true cost

of the process

Programmes that are not

kept

Service levels poorly

measured

Adversarial contracts and

risk pushed down the

supply chain

Over-ordering from other

internal processes

Not enough recycling

companies

Technical and material

properties need over-

ordering

Cumulative effect of

allowances made in each

process step.

Sales push

Design processes enhance

waste

Materials on site payment

clauses

Variations

Lack of

design/dimensional co-

ordination

Poor information and

management processes

Poor bills of quantities

Poor handling equipment

Site management

processes

Inappropriate specs

Lean processes

Quality management and

control

Careful information and

procurement processes

Consolidation and JIT

processes

Rigidly control materials

to site

Better design and take off

processes

Offsite construction

Organisational structure Procurement

Recycling advice and it’s

cheaper to process waste

than stop it occurring

Fragmentation

Little understanding of

integration

Supplier not gear to

deliver logistics

Focus is always on site

priorities

Forecasting

No optimisation of supply

chain

Not gear to working on

true costs

Communication and

information flows

Technology an issue.

Supply chain weakness

Damage by other trades

Bills of quantities

Inappropriate risk

No QA processes

Contractual arrangements

Organise for

standardisation

Integration

Evidence based

management/KPIs

Logistics plans

Collaboration

Holistic approach to

recycling

Active planning for reuse

Organise for site

production

Designers to fully

understand costs

Logistics processes are

high energy users, use

this information to help

reduce waste

Backhauling

Table 16 is a matrix of the alternative logistics techniques (as well as off-site construction) ranked by potential

impact and showing which stakeholders need to be engaged in take up.

Table 16: Stakeholders and alternative techniques

Alternative techniques, diminishing impact �� Stakeholders

Logistics

planning

JIT

delivery

ICT Consolidation Demand

smoothing

Logistics

specialist

on site

4th party

logistics

Off-site

construction

Community x x

Regulators x x x x x

Project

planners x x x x x x x x

Designers

x x


Estimating &

procurement x x x x x x x x

Manufacturing x x x x x x x x

Delivery x x x x x x x x

Installation x x x x x x x x

Specialists x x x x x x

Disposal x


6.0 Recommendations

Given the short timescale of WRAP’s 2006-2008 business plan, Constructing Excellence recommends a clear focus on those actions that will achieve short-term results and those that will take longer to payback. The prime objective should be to influence procurement to reduce over-ordering so that the tonnage diverted from landfill and money savings can be achieved.

As a general rule, civil engineering is less wasteful than building because it already practices JIT (concrete,

aggregates, cabling, etc) and it has become adept at recycling waste either within the project or elsewhere.

Therefore the recommendations refer mainly to building.

The over-arching principles are:

� Make the business case for minimising waste

� Make logistics planning the norm

� Set up start-to-end information systems that include tag and track

� Understand the construction process and apply ‘lean’ principles.

Actions to see results within a year

The business case and logistics planning are the guiding principles for short-term gains.

In order to influence at least £10bn of procurement, WRAP should focus on new-build and refurbishment projects

in the following sectors and segments (see 5.1: Focus on industry sectors and segments):

� Public – housing, schools, health, and central government and agencies including defence, prisons and police

� Private – housing and retail.

WRAP should focus on reducing the waste arising from over-ordering, damage, design change, and planning and

programming by encouraging take up of these alternative logistics techniques (see 5.2: Focus on logistics

methods and alternative techniques):

� Logistics planning across the full supply chain

� Consolidation centres


� JIT delivery to the workplace.

Of these, logistics planning is the top priority because the need for consolidation and logistics specialist on site

will emerge from this action. JIT will follow as a consequence but this must be specified in the logistics plans.

Constructing Excellence is preparing a template for logistics planning and aims to have this ready for consultation

by the end of March 2007.

Section 5.3: Focus on stakeholders shows who must be engaged in this process. A two-pronged approach is

needed to:

� Convince clients about the business case and to demand change from their main contractors

� Educate the main contractors (and their supply chain) about the business case and techniques that will deliver.

In most cases, the recommended entry channel is via the major main constructors who are working in the target

sectors and segments. This is because they are relatively few in number compared to the other stakeholder

groups and they lead established supply chains. The top players are listed in AMA’s report Construction Industry

Segmentation and Analysis. Once contact is made with these major players and they are convinced of the

business case, the next channel is via their clients.

Dialogue with clients and main contractors must include contractual terms offered to trade and logistics

contractors. The research revealed:

� Contracts that penalise trade contractors for delays are probably the biggest single cause of over-ordering because the risk of having insufficient materials weighs heavily on trade contractors who build it into tenders.

� Contracts with hauliers usually bear no relation to project risks. When stepping up from hauliers to logistics contractors, the terms of contract should reflect their vital role in delivering projects.


Housing

Entry to housing will be easier in the public sector than the private sector (which is three times as large) because

the public sector is already adopting change en masse via the Housing Corporation and the Housing Forum,

which is part of Constructing Excellence. Once a start is made in public housing, it will be a matter of transferring

the improvements to the private sector where there is a much larger potential gain.

Schools, health and central government

These segments are increasingly managed under framework agreements which have led to some consolidation

and integration of supply chains. These agreements are usually governed by key performance indicators that are

periodically changed to accommodate emerging business drivers (such as minimising waste).

Retail

This segment is dominated by a relatively small number of clients who have already caused big changes in their

supply chains, mainly driven by retail thinking. This is the only segment where the entry channel should be via

the clients. Again, the top players are listed in AMA’s report. But be aware that some of these commercial

relationships will make it difficult to realise the potential of waste minimisation, for example sharing the

dividends.

Logistics providers

There appears to be logistics providers ready to offer alternative logistics techniques (see 3.0: Logistics

providers). While the number with hands-on construction experience is limited there is an abundance of

expertise already providing similar services in other industries. These companies are well organised to manage

logistics planning, warehousing and distribution. But these cannot be relied upon in the short term because they

will have a learning curve to adapt to construction. So in the meantime it will be necessary to nurture the

emerging construction logistics specialists listed as ‘not ranked’ in the top 100 logistics companies.

Other agencies

The key agencies that WRAP should work with include:

� Transport for London (TfL)

� Greater London Authority (GLA)

� Chartered Institute of Logistics and Transport (CILT)

� Chartered Institute of Builders (CIOB)

� Construction Products Association

� Housing Corporation

� Constructing Excellence.

Actions to see longer-term results

WRAP’s second strand of actions should focus on the long term. It should commence immediately and run

concurrently with the short term programme. Integrated ICT systems and lean processes are the guiding

principles for long-term gains. The work should also roll out gains pioneered in the short-term campaign.

The extra alternative techniques that should be encouraged in the medium/long term (see 5.2: Focus on logistics

methods and alternative techniques) are:

� Integrated ICT.


� 4th Party Logistics

� Off-site construction.

Integrated ICT and off-site construction will alleviate the remaining reason for waste – off cuts – as well as over-

ordering, damage, design change, and planning and programming.

Integrated ICT

Of these, the most important is Integrated ICT because it has the power to open communication along and

between supply chains. Experience in the retail and automotive industries show the importance of ICT in supply

chain integration, JIT delivery and traceability of components from design through manufacture, distribution,

assembly, installation, commissioning, operation, refurbishment and eventual demolition. This research has not

discovered any full systems in construction but there are partial systems operated by manufacturers and

constructors in isolation from each other. Therefore Constructing Excellence recommends that the entry channel

should be via those logistics suppliers who claim to offer such systems.


Demand smoothing

The construction industry is notorious for its irregular demand cycles. Demand smoothing (including forecasting)

is widely practised in the retail and automotive industries, but the patterns of demand are different. Hence,

Constructing Excellence recommends WRAP would derive the most benefit from demand smoothing via the

framework agreements that are consolidating demand in the public and private sectors. Funding cycles in public

sector procurement will also be important.

4th Party Logistics

4PL is a niche specialist logistics service that co-ordinates various supply chains for one customer (or main

contractor). In principle, it is transferable to any major construction project and the need should be apparent in

the logistic plan. WRAP should look to the logistics specialists with the know-how and technology needed to run

a 4PL service.

Off-site construction

Also known as pre-assembly and off-site assembly, this is not rated in the short-term actions because the

decision to construct offsite must start with outline planning and it takes some time to percolate down the supply

chain. Nevertheless, results should be expected in large procurements within a couple of years. This is a rapidly

emerging ‘sub’ industry and the recommended entry channel is via BuildOffSite, which is managed by CIRIA.

Packaging

None of the actions mentioned so far (except perhaps consolidation and onsite logistics team) will have any

appreciable effect on the level of packaging. Evidence from the workshops shows that the level of packaging is

already finely balanced between the minimum needed to ensure safe delivery and what is needed to survive the

abuse suffered on site. Hence, although there have been some advances in making packaging reusable (such as

stillages for delivering windows), minimising this waste will be difficult. Therefore WRAP needs to influence

regulations and incentives that will encourage suppliers to take responsibility for reusing and recycling packaging.


Appendix 1: Research activities and

outcomes

The research was done in five stages:

Desk study

Logistics conference Workshops Industry survey

CO2 survey

Desk study – Summary

This desk study is the first stage in the “Efficient Construction Logistics” study commissioned by WRAP.

Subsequent stages are Industry Survey (including CO2), Interviews and Workshops, Logistics Conference and

Technical Report.

The purpose of this report is to:

� assemble the knowledge that Constructing Excellence has obtained by desk study of the current state of

‘logistics’ and ‘waste minimisation’ in the construction industry

� suggest how better deployment of logistics could further reduce the amount of material waste in construction

and increase the proportion of residual waste that can be reused or recycled

� identify next steps in the study.

This report includes primary (factual) research as well as some secondary (interpretative) research based on

tangible and anecdotal evidence. Unless stated otherwise, statistics refer to the whole of the United Kingdom.

The waste investigated in this report is solid waste.

Scope and size of the construction industry

The annual value of the UK construction industry is about £107 million, which is about 9% of GDP.

There is a large proportion of small enterprises which increases the difficulty of implementing change.

The ‘Pearce’ report is the best available summary of how the industry behaves.

The ‘AMA’ report is probably the most up-to-date and extensive collection of industry statistics available.

Next steps:

� Use the extensive ranked lists in the ‘AMA’ report to identify organisations and then find key individuals (from the Constructing Excellence database) to include in surveys, interviews and workshops.

� Use this analysis of sectors and segments to select sites for visits to investigate the relationship between logistics and waste minimisation.

Scope and amount of waste produced in construction

It is apparent from a note provided by WRAP that there is conflicting data on the amounts of waste and the uses

to which it is put.

Although the amounts of waste quoted in the ‘Viridis’ report are probably low, it has been possible to extrapolate

equivalent data from the OPDM report. The conclusions in this section are the best guide available for the

amounts of waste created, recycled and ‘disposed of’.

The industry could work towards a two-stage objective to first eliminate waste sent to landfill then eliminate

waste sent to exempted sites.

Next steps:

� WRAP should review the analysis in this section for errors and omissions.

� Determine the scope of ‘exempted’ sites to see whether there is any valid use for this waste before using this figure in any waste elimination target.

Size and scope of the logistics sector serving construction

The value of distribution only is about £2bn in the construction industry. This does not include modern logistics

services that could reduce the amount of waste produced and increase recycling.


Compared with the retail and manufacturing industries (where logistics has already been fine-tuned), the

potential benefits of applying modern logistics in construction remain largely untapped. The biggest single barrier

to changing this is the inappropriate ownership of the logistics processes by the suppliers.

Next steps:

� Investigate the distribution of the four models of who ‘does logistics’.

� Investigate what main and trade contractors mean by logistics and how much they believe they are paying for that service.

Distribution channels

Distribution channels in construction are numerous.

The potential for both process and material waste is high.

Responsibility for logistics is fragmented.

Logistics methods used in construction

The methods of logistics vary according to the sophistication of the constructor and the technology used.

Eight principles of logistics, when applied to construction, show a large gap between best practice in construction

and manufacturing or retailing.

Consolidation is an ‘easy win’ which can impose logistical discipline on a chaotic industry.

Although this study focuses on material waste, the broader definition of waste includes energy as well as money

and human resources wasted through inefficient processes.

The Japanese automotive industry has led the way in defining waste (in terms of process and materials) and

designing production systems and managing the whole supply chain to achieve better results more efficiently.

These ideas are now widespread in the UK manufacturing industry. Through this rigorous management of the

supply chain, manufacturing has been transformed into an industry that is much less wasteful.

The construction industry needs to embrace these ideas in order to progress from dealing with the effects of

waste to eliminating the causes.

Next steps:

� Investigate the distribution of the four logistics methods and any other methods.

� Investigate how the methods of logistics vary according to sector and supply-tier arrangements.

� Investigate the take up of modern logistics methods using the eight principles of logistics as a guide.

� Investigate the existence and scope of reverse logistics processes in the construction industry.

Stakeholders in construction logistics

There is a wealth of data on trade associations and institutes with an interest in construction logistics. Following

the 80:20 rule, the approach will be to focus attention on those who are best placed to influence change and

those with the know-how (possibly gained in other industries) to make it happen.

Next steps:

� Obtain contacts from Construction Products Association for the directors responsible for packaging and waste minimisation (may be different people) in the top product manufacturers and distributors. Use this list to

investigate existing methods of logistics and potential to improve logistics processes and offer reverse

logistics.

� Involve members of CILT’s Construction Industry Supply Chain Forum in the surveys, interviews and workshops.

� Use the lists mentioned above to identify persons to represent clients, consultants and contractors in interviews and workshops. The agenda will be to investigate sector and supply tier arrangements, existing

methods of logistics, potential to improve logistics processes and offer reverse logistics.

Market share

The market share is unclear because the extent of logistics services supplied to the construction industry is

largely invisible in accounts and many companies have declined to give this information.

The UK’s top logistics contractors are already providing modern logistics services to the retail and manufacturing

industries. Hence they have much to offer in transferring these best practices to construction. But more work is

needed to establish contacts in the key logistics contractors who have so far “declined to comment”.

Next steps:

� Obtain introductions to those logistics contractors whose construction interests are listed as “unknown” or “declined to comment”. This might be best achieved via CILT.

� Interview the business development directors of logistics contractors mentioned above to determine what opportunities they see in construction and what value they can bring to improve logistics. Explore options to

offer and/or improve reverse logistics services.


Studies in logistics and waste minimisation

This work is incomplete.

Next steps:

� Obtain and draw conclusions from those selected references highlighted in Appendix 2 to inform the preparation of surveys, interviews and workshops. In particular, look examples of best practice in logistics

services provided for construction and other industries, and for evidence of successful logistics and reverse

logistics systems that may be transferable to construction.

Demonstration projects

This desk study reviews 25 demonstration projects with themes logistics and/or waste minimisation. This section

lists the benefits and lessons learned. The activities demonstrated were:

� using a specialist logistics contract on site

� using a Consolidation Centre for distribution

� dealing with contaminated soil

� using tag technologies

� logistics problems on congested sites

� recycling generally

� applying logistical solutions

� ideas from manufacturing

� demolition generally

� recycling plasterboard

� recycling aggregates

� analysing waste

� substituting materials

� co-ordinating projects.

Waste minimisation schemes

This desk study has identified potential actions to minimise waste and which stakeholder(s) is responsible. The

actions can be divided into three types:

� Reduce the amount of waste created in the chain of construction processes

� Increase the amount of waste that is recycled.

� Increase the amount of recycled materials and products that are used in new projects.

There is plenty of activity in various networks, approaches and schemes. What seems to be missing is a single

strategy for joining all these initiatives together.

WIN is a portal for accessing those decisionmakers dealing with waste in local authorities. An important caveat is

that most will be primarily involved in municipal waste.

Next steps:

In a survey of construction professionals, determine:

� the extent of use of these schemes and services

� other schemes and services being used to minimise waste.

With permission of WIN, include these decisionmakers in a survey to identify:

� those with an interest in construction waste

� local waste minimisation schemes that address or could be extended to address construction waste.

Impact of logistics on waste levels

Waste arises from five sources: over-ordering, packaging, damage, off cuts and demolition.

Modern logistics can be applied to every source to reduce its volume and/or increase recycling.

Current industry advice is mainly limited to dealing with waste (by recycling).

The industry has a chronic problem of over-ordering. Tackling this problem alone would reduce the volume of

waste enough to achieve the first objective of eliminating waste sent to landfill.

Tools exist (mainly in manufacturing and retailing) to make a radical impact on process and material waste.

Reducing process waste offers the best financial incentives to the stakeholders because it will have an immediate

impact on profits.

Once a culture is established to reduce process waste, the accompanying reduction in material waste will achieve

WRAP’s objectives.


Logistics conference

"The Art of Applying Timely Resources"

London, 21st November 2006

Constructing excellence arranged this conference to support three concurrent projects all with a logistics theme:

� London Construction Consolidation Centre - a two-year trial of Consolidation to serve sites in central London, sponsored by Transport for London

� Logistics plan for the construction industry, sponsored by the Department of Trade & Industry

� Efficient construction logistics, sponsored by WRAP.

There were some 50 delegates representing most of the stakeholders in construction logistics.

Welcome: Don Ward, Chief Operating Officer, Constructing Excellence

Chair: Steve Agg, Chief Executive, Chartered Institute of Logistics and Transport

Agg mentioned his background in retail logistics where cost and service have been the big issues. Now, a third

issue is challenging logistics - environment.

Presentation 1: New Drivers for Construction Logistics

Adrian Boughtflower, Freight Co-ordinator, Transport for London (TfL)

This presentation looks at the challenge of how to sustain the growth of London without clogging up the

transportation network. Boughtflower explains the success of the London Construction Consolidation Centre

which is consolidating deliveries to several inner-London sites at a warehouse outside the congestion zone. The

centre is showing substantial reductions in the environmental effects that road transport has on the capital.

Figure A1: London’s transport dilemma:

TfL’s key statistics for logisticians:

� By 2026 London’s population will grow by 1.2 million.

� By 2016 there will be 310,000 new homes and office space will increase by 7-9million m2.

� This work alone represents £10 billion of construction projects.

� TfL is planning for demand for goods and services to rise by 12% -15%, freight movements to increase by 15% as well as increased passenger movements.

� At the same time, road and rail capacity will fall by 10%.

Discussion 1: Drivers, barriers and stakeholders

Drivers: Cost, Quality, Environmental and Delivery for to utilise a holistic logistics approach or not. In other

words what will the drivers need to be to get you embrace logistics from your part of the industry?

Barriers; what is stopping people addressing logistics in their part of the supply chain, are they the relationships

in the in the industry, preventing you from embracing logistics, they have not thought about it, what knowledge

is required for you part of the industry to embrace logistics?

Who are the stakeholders and what do they need to do to drive logistics forward?

SUMMARY

Drivers (in no particular order):

2006 2016 2026 -15% 0 +15%

Rising demand

Falling capacity


• concern for the environment

• increased regulation

• how to make construction a sustainable industry

• concern about loss of materials

• concern about security

• logistics can improve KPIs: programme certainty, productivity, cost

• contractor demand for more efficient processes, for example JIT

• need to move deliveries away from peak times to avoid congestion

• potential to use existing fleets for 'reverse' logistics

• site constraints

• limited potential to recycle or reuse waste.

Barriers (in no particular order):

• invisible costs and no way to extract savings from improved methods

• lack of understanding of the problem

• fragmentation of the industry

• lack of leadership and champions

• business case not yet demonstrated

• disconnection between investment and benefit

• disconnection between designers and the supply chain

• ineffective ICT systems

• an immature collaborative culture.

Stakeholders:

• the community - understand the issues and demand change

• regulators - a joined-up regulatory framework that is enforced, monitored and reviewed

• project planners - more work on logistics plans and accounting for waste

• designers - understand the problem and facilitate change via the design and specification

• estimating and procurement - understand the waste component of cost

• manufacturing - innovation and collaboration

• delivery - adapt/adopt successful supply chain management systems from other industries

• installation - demand transparency of cost of supply and delivery

• disposal - maximise reuse and recycling and optimise use of vehicles

• specialists - educate the community and communicate to all stakeholders.

Presentation 2: Logistics centres and construction logistics in the urban environment

Gary Sullivan, Managing Director, and Ian Lister, General Manager, Wilson James

Following on Adrian Boughtflower's explanation of the benefits of consolidation, this impressive video

presentation shows how a consolidation centre works and the impact it has on both the environment and the

efficiency of construction. The video (192MB) can be obtained from Adrian Blumenthal.

Presentation 3: Logistics within BAA, from a tools and people point of view

Tim Brent, Integrated Logistics Leader, BAA

Brent shows how BAA's proposed redevelopment of Heathrow Airport will capture the many lessons learned in

the successful construction of Terminal 5. BAA is in no doubt that logistics has a key role to play and logistics

plans are already well advanced.

Presentation 4: Advanced supply chain optimisation

David Hills, UK Country Manager, Inform

Hills presents what was potentially a 'heavy' technical session in a lively and interesting manner. He

demonstrates how his company uses mathematical optimisation to set up the most effective delivery schedule,

using computer-aided scheduling. He gives examples of the hardware and tools needed and also how to strike

the right balance between customer service and cost efficiency.


Presentation 5: National distribution systems and how to save 18% of the cost of materials supply

using logistics

Matt Nicholls, Business Development Director, Wolseley

Nicholls explains how Wolseley embarked on a £100m investment programme three years ago to create a 'world-

class supply chain'. He describes their nationwide distribution system, together with a logistics flow chart along

the whole supply chain. The investment has yielded simultaneous service improvement AND cost reductions.

There is substantial use of consolidation in the supply process. He demonstrates environment benefits and

knock-on improvements in project efficiency.

Discussion 2

In the context of the stakeholders, what is important in relation to logistics?

What is the key Logistics input into the process steps that needs to be considered/developed for this stakeholder

group?

What is the key output into the next stage of the process?

What do you think the unnecessary-cost drivers are?

How can we improve flow between each step of the process?

SUMMARY

The groups, each representing a stakeholder, discussed what their inputs might be to a logistics plan and what

outputs they should expect from the plan.

Table A1: Stakeholders in logistics planning

Inputs Outputs Unnecessary-cost drivers

Community

regulation by town planners, local

authorities, police, highways, etc.

consultation with developers

restrictions on working hours,

access routes and parking

construction methods (for example

off-site assembly) that impose less

strain on the community's quality of

life - noise, safety, fumes, vibration

and traffic

job opportunities

Regulators (central government,

local government and clients)

consistent message - evidence that

regulations are 'joined up'

early involvement in projects

clear guidance and support

economical and practical logistics

plans

measurement of end results not

just the parts

collaborative supply chains

less waste for disposal

Designers

appropriate whole-life brief

collaboration with manufacturers

communication and education

specify most appropriate materials

two-way information flow

risks understood and transferred to

the right stakeholders

Project planners

drivers: cost, quality and time

regulations

procurement route

programme

JIT demand fulfilment

access routes and hours

suitable vehicles and plant

off-site assembly

security

industrial relations

community relations and local

employment

continuous improvement

nice to haves

diverting from agreed plan

uncontrolled changes

logistics consultants(!)

imposed trade contractors

unnecessary process steps

Estimating/procurement

clear objectives with a long-term

view

clear scope

innovation

reward

early inclusion in projects

assembly plan

movement, storage and damage

shortage of skilled labour

waste of materials

lack of planning

Comment [A2]: AB to populate this column where conference did not report


Inputs Outputs Unnecessary-cost drivers

components of costs

identification of waste

risks

programme unpredictability

Manufacturers

manufacturing time v. customer's

order/call-off

demand forecast

quality of forecasts

involvement of customers

flow improvement

communication and trust

production and delivery on time and

in full

Constructors

upstream logistics (by

manufacturer)

visibility of demand

joined up approach by other

stakeholders

expertise

expectations and trust

practicability

certainty of cost and programme

undamaged goods at the delivery

point

right place and right time

managed risks

Presentation 6: Uses of logistics in the UK construction industry and waste minimisation

Phil Wilson, Construction Project Manager, WRAP and Adrian Blumenthal, Special Projects Director, Constructing

Excellence

Wilson explains WRAP's remit in the construction industry and outlines their ambitions to reduce the waste arising

from construction as well as increased recycling. The current two-year business plan has specific measurable

objectives for its sustainability goals. The headline figures show that, on average, 15% of material supplied to

construction sites is wasted; up to 45% for some materials. Blumenthal outlines the results of a desk study

Constructing Excellence has done. He summarises the key reasons for waste arising: over-ordering, packaging,

damage, off cuts and demolition. This presentation sets the scene for the final discussion about how the industry

can prevent waste arising in the first place.

Discussion 3

How can waste can be minimised and prevented to coming onto site in the first place?

What are the broken processes that need to be fixed?

What does each stakeholder in the construction process need to address to fix the processes or stop waste

happening?

What are the key learning points from the day?

SUMMARY

Since this conference, Constructing Excellence has assessed the potential for each idea to minimise waste and the

time frame needed to implement the idea, shown in Table A2.

Short time frame means results within a year, medium time frame means results within three years and long time

frame means results will take more than three years.

Table A2: Ideas for minimising waste – potentials and timeframes

Idea Potential Timeframe

design for manufacture and

assembly

High Medium

off-site assembly Medium Medium

use of recycled components Low Short

better use of off cuts High Short

CAD-CAM See design for manufacture and assembly

order what's needed High Short

minimise storage High Short

tag and track materials High Medium

tax empty containers Low Short

packaging fit for purpose Low Short

logistics 'how-to-do-it' guide Medium Short

Comment [A2]: AB to populate this column where conference did not report


business case High Short

ICT systems High Long

logistics plan with KPIs High Short

rewards for adherence and delivery High Short

understand cost of waste High Short

education and training High Medium

optimise fit, form and function High Medium

stillages and reusable packaging High Short

The table on the next page summarises the ideas and suggests which stakeholders could act.

Notice how ICT systems will impact on nearly all stakeholders.

Following the conference, Constructing Excellence concluded that the main streams of activity needed to increase

the impact of logistics on waste are:

� Business case

� Planning

� Information (incl. tag and track)

� Process.

Key learning points (in no particular order):

• Industry needs to think through logistics from start-to-end of supply chains

• Industry needs a strong financial driver for change

• Rewards needed to encourage participation

• Regulation and cost (NOT collective ‘will’) will drive change will create the tipping point

• Need to develop and publicise new approach to logistics

• Need for robust ICT systems that enable communication along the supply chain

• Cost of disposal needs to rise further

• Need to invest in education in order to increase awareness of the problem in order to be able to

understand and improve

• Large number of small traders will be a particular issue in educating for change

• Many answers may already be 'out there', especially in best practice transferring from other

industries.

Table A3 shows a matrix of ideas for minimising waste and who would be involved.


Table A3: Ideas for minimising waste – who would be involved

IDEAS community regulators project

planners designers

estimating and

procurement manufacturing delivery installation specialists disposal

design for manufacture and

assembly x x x x

off-site assembly x x x x x x

use of recycled components x x x

better use of off cuts x x

CAD-CAM x x x

order what's needed x x x

minimise storage x x x

tag and track materials x x x x

tax empty containers x x x

packaging fit for purpose x x x x

logistics 'how-to-do-it' guide x x

business case x x x

ICT systems x x x x x x x

logistics plan with KPIs x x x x x x

rewards for adherence and

delivery x x x x

understand cost of waste x

education and training x x

optimise fit, form and function x

stillages and reusable packaging x x


Workshops

Constructing Excellence held three workshops each attended by four to six members of these stakeholder groups:

� logistics contractors and consultants

� construction contractors

� construction product manufacturers.

Separate workshops we held for each stakeholder group in order to gain a clear stakeholder response by reduce

the potential for friction between stakeholders.

Table A4: Agenda for workshops

Welcome and introductions

Background of the research so far

Logistics processes – key stages, activities and tools

The generic construction process

Overlay logistics on the generic construction process

flows of information, people and materials

Methods of logistics – traditional and alternative methods, distribution across industry

Methods of logistics

confirm range of traditional and alternative methods

assess where methods are used

benefits, driver and barriers

exemplars

What is material waste – where, how and why it occurs

Causes

the reasons it occurs

the underlying root causes

Break

Solutions

prioritise the root causes

propose solutions

Results of previous workshops

Prioritise actions

identify the common threads of actions

the priorities – why, what, how and when

Summarise and close

Lunch

Tour of the Consolidation Centre

Logistics, construction and manufacturing processes

Table A5 shows the steps in the processes determined in each workshop. After the workshops, Constructing

Excellence correlated the three processes.

Table A5: Processes correlated across logistics, construction and manufacturing

Logistics process Construction process Manufacturing process

Ranging – marketing, forecasting

and specifying

Regulatory planning

Design Design

Take off quantities Take off quantities

Project planning and programming Lead time planning

Procure logistics resources Procure work packages Procure materials

Planning distribution

Manufacture Manufacture

Storage

Distribution Deliver Deliver

Assemble and install

Backload Waste management Waste management


It was apparent from the workshops that, while communication was reasonably effective vertically, it was the

horizontal communication and alignment of the process that raised doubts.

Methods of logistics

Constructing Excellence proposed four basic methods of logistics. None of the delegates offered any significant

changes.

Traditional

Method 1 Business that goes to the supplier to pick up materials

Method 2 Business that has materials delivered to site

Method 3 Business that uses portfolio analysis to segment ordering processes and call off arrangements

Alternative

Method 4 Business that co-ordinates a start-to-end process and tags information, people and materials flows.

During the workshops the delegates described various techniques that they would expect in the alternative

method 4:

• Just-in-time delivery to workplace

• Logistics specialist on site

• Consolidation

• Integrated electronic information systems for take-off, manufacture, delivery, installation

• Off-site assembly (is this logistics?)

• Lean processes

• Inter-modal transport

• Synchronised supply chain

• Regional distribution centres

• Empowerment of logistics personnel to intervene in deliveries, common user plant, on-site storage,

wasteful activities

• Managing logistics agent to pull together all logistics operations (4th Party Logistics)

• Detailed logistics plan

• Demand smoothing

• Contracts that engage logistics supplier on project risks and rewards.

Constructing Excellence later divided these into cause and effects and concluded that the delegates had identified

seven alternative techniques:

� Logistics planning across full supply chain

� Consolidation centre

� Just-in-time delivery to work place

� 4th party logistics



� Integrated ICT system across full supply chain.

Reasons waste arises

Before the workshops, Constructing Excellence had identified four reasons. Delegates added two more, making

six main reasons why waste arises in construction. There was considerable debate about the percentage

contributions of all the reasons. Although some of the logistics specialists from other industries were quite

surprised by the average 15% waste figure offered by WRAP, none of the construction delegates disputed this

figure.

Over-ordering (5-10%)

Damage (3-25%)

Off-cuts (5-20%)

Packaging (both


(1-5%)

Design Change (1-5%)

Programming and Planning (1-10%)


Underlying causes

Although the delegates offered many causes for each of the reasons, common threads emerge in Table 6.

Table: A6: Underlying causes of each reason that waste arises

Reasons for waste Underlying causes

Logistics specialists Constructors Manufacturers

Over-ordering Over specification

Shrinkage

Lack of trust in suppliers

Lack of historical

knowledge

Inaccurate take off

Fear of failure

Unreliable information

Poor take off done in a

hurry

“allow 10%” mentality

compounded through

purchasing process

Compensate for expected

losses

Bulk-buy deals

Standard pack sizes

A safety net

Trade contractors use

over-ordering to mitigate

the risk of not meeting

the contractual obligations

Poor process the takeoff

and estimating

Habit

Damage Lack of care

Congestion

Poor housekeeping

Over-ordering

Inappropriate packaging

Unsuitable pack sizes

Too much or inefficient

handling

Unsuitable storage

Poor sequential working

Overzealous construction

manager(!) moving trades

along

Poor labelling

Too much material on site

Multiple handling

Inappropriate equipment

and handlers

Lack of training

Bulk deliveries

Poor handling

Multiple handling

Off-cuts Pack size

Shrinkage

Inadequate instructions

Cheaper to throw away

than reuse

At the standardisation in

the design

Over-ordering leads to

lack of interest in using

off cuts

Design is not considering

standard size is

Design

Manufacturing restrictions

Packaging (both


Packaging that is only

suitable for transportation

and not beyond

Packaging is insufficiently

robust for reuse

Need to protect against

the damage expected on

site

Multiple movement

Suitability beyond the

point of delivery is not a

high priority for

manufacturers

Design Change Late client decisions

Impractical design

Value engineering leading

to savings, despite waste

Programming and

Planning

Barriers to change:

Lack of true and logistics people in the construction industry

The percentage fee mentality is a disincentive

there is a reluctance to share knowledge

contracts for the inputs do not yet reflect the risk and rewards in construction.

Solutions:

There was general agreement among delegates that the by level methods of logistics were more likely to have

lower levels of waste. As the alternative techniques emerged there was general agreement that these would be

effective in minimising waste. In the last workshop (with the manufacturers) Constructing Excellence offered

Table 7 showing potential impact and timescales. There was no significant disagreement about this assessment.

Note that although off-site assembly is offered as a solution, it is not driven by logistics but would have a

significant knock-on affect on logistics.


Table A7: Techniques – potentials and timescales

Alternative logistics techniques Potential impact Timescale to achieve results

Logistics plan High Short

Consolidation centre High/medium Short

Just-in-time delivery to the

workplace

High Medium

Fourth party logistics agent High/medium Medium

Demand smoothing High Medium

Logistics specialist on site Medium Short

Integrated ICT and tagging etc High Long

Off-site assembly High/medium Medium

The workshops also offered some specific solutions that may or may not have a logistics impact:

Table A8: Solutions

Over-ordering Education - the good news (opportunities) and bad news about waste

The level of waste is affected by decisions made in the early procurement

process

The solution will require more integrated-team thinking

There could be a milestone in the call-off process for the final order to

include in a carefully evaluation of remaining need.

Damage The key is better handling - who, equipment, how, training

Off cuts Design is a two-stage process. The principle of standardisation is

important that the concept stage and the minimisation and reuse of off

cuts is important that the detail stage.

Packaging The amount and method of packaging is already very finely balanced by

the manufacturers. The scope for a big impact here is low.

Other observations from the workshops:

The two logistics professionals who do not work in construction said they were shocked by the apparent degree

of inefficiency and level of waste.

The manufacturers noted unplanned orders typically 2-5% but they expected this to be much higher for

distributors.

There was frequent mention of the need for sites ‘pull’ only the materials needed, rather than permit the supply

chain to 'push' more materials are now needed.

There is a move towards buying clubs and fewer supply chains, which may have a beneficial effect on the level of

waste.

There is a need for logistics personnel on-site to be empowered to:

• control what comes to site

• co-ordinate on-site storage and common user plant

• intervene in wasteful activities.

Contracts need to be redrafted so that logistics suppliers engaged in project risks.

Logistics plan is needed very early in a project. This should become more detailed as it cascades down the

supply chain.

Manufacturers mentioned Materials Resources Planning (MRP) as a technique for forecasting and creating long-

term plans.

To manufacturers confirmed that they are now having conversations with customers about waste, and that this

had only started happening in the last 12 months. The driver for this is apparently the need to know how much

waste is likely to arise so that the trade contractor knows how much disposal will cost. This has led to some

manufacturers offering waste management service. This might be free (such as pallet removal and recycling) or

paid (such as recycling off cuts).

One manufacturer reported that they are investigating switching to plastic pallets with RFID tags to enable

tracking, recovery and reuse. It would require up to two years to get this going and a £1 million investment.

Half the manufacturers were involved in off-site assembly. Although this was a small sample, it was interesting

to note there level of waste was generally less than 5% and about 70% of that is recycled.

The manufacturers offered three issues for dialogue with the construction industry:

• Expose the cost of waste


• Those creating the waste must be responsible forgetting would have (although there is some

ambiguity about who is ‘creating’ it

• Designers must take more responsibility the minimising waste.

Consolidation centres could benefit manufacturers by:

• Quicker and easier deliveries

• The delivery time is no longer critical

• Handling after delivery is by ‘experts’, hence fewer disputes about damage

• The selection of vehicles for delivery is less critical.


Industry survey

The purpose of the survey was to test various ideas the project team had about waste and also to obtain ‘grass

roots’ opinions about the causes and solutions. The survey was conducted online by broadcasting an invitation to

the Constructing Excellence database of industry contacts. There were 190 valid responses.

Questions and responses Analysis

1. What is your organisation’s role in construction?

Industry role

0%10%20%30%

40%50%60%

Arc

hite

cts

Building

serv

ices

Clie

nts - p

rivat

e

Clie

nts - p

ublic

Con

tractor

s

Cou

ncils

Eng

inee

rs civil

Series1

50% were contractors (assumed to

be ‘constructors’) and 20% public

sector clients.

2. Which construction sector is the main demand for your

services?

Construction sector that is main demand for your serivces?

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

14.0%

1

Commercial

Retail

Leisure

Utilities

Airports and ports

Industrial

Other

The largest segments represented

were public housing and private

commercial buildings.

Although the value of private housing

is three times public housing, the

Constructing Excellence database is

biased towards public housing

because it includes the Housing

Forum which more public sector

members than private sector.

Construction sector that is main demand for your services?

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

1

Public Housing

Private Housing

Schools

Universities

Health

Roads

Railway

Central Government incl. defence, prisons and police


3. Which construction activity is the main demand for your

services?

Which construction activity is the main demand for

your services?

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%

New Build Major refurbishment Repair and maintenance

More than 60% are engaged in new

build.

4. What is the typical value of construction projects that you

deal with?

What is the typical value of construction projects

that you deal with?

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

1. Less than

£1 million

2. £1 million

to less than

£10 million

3. £10 million

to less than

£50 million

4. More than

£50 million

Series1

25% are engaged in projects less

than £1m in value and 70% in

projects less than £10m.

5. To what extent do you think the quality of the logistics

service affects the amount of waste arising from construction?

To what extent do you think the quality of the

logistics service effects the amount of waste

arising from construction?

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%

1. Quite a lot 2. A little 3. Not at all 4. Not sure

63% say logistics affects the amount

of waste “quite a lot”

90% say “quite a lot” or “a little”.


6. How much do you think logistics costs the construction

industry? These are percentages of the total cost of

construction.

How much do you think logisitics costs the

construction industry?

0

10

20

30

40

50

60

70

80

1. <5% 2. 5% to <

10%

3. 10% to <

20%

4. >20% 5. Don't know% o

f to

tal

co

st

of

co

nstr

ucti

on

<This chart is incorrect. AY to

investigate.>

7. Do you think the logistics services used in the construction

industry are fit-for-purpose in terms of ''the timely positioning

of construction materials''?

Do you think the logistics services used in the

construction industry are fit-for-purpost in terms

of "the timely positioning of construction

materials

0.0%

10.0%

20.0%

30.0%

40.0%

1. Quite a lot 2. A little 3. Not at all 4. Not sure

45% say logistics is either fit for

purpose ‘a little’ or not at all.

More than 20% don’t know.

8. If you answered Question 7 ''A little'' or ''Not at all', tell us

why.

Key messages from the responses:

� Delivery systems are cost driven, thus in bulk with full loads preferred, but don’t arrive when promised and are constrained by

vehicle use.

� Waste occurs because of lack of planning and co-ordination by all parties concerned.

� There is not enough use of JIT.

� Logistics services aren’t sufficiently geared to the variability of demand for materials (in terms of timing and quantity).

� A lot of construction processes are on a critical path and, if delays occur and co-ordination is lost, sub-contractors start missing their

window.

� There is little co-operation or culture of planning since suppliers just want to sell their goods and don’t have any incentive to programme

and plan for timely positioning of construction materials.

� Deliveries are outsourced to the cheapest man with a van or UPS or DHL who have no commitment to the project or the user.

� Many bread and butter materials are brought on site too early, laid down and have to be manually transferred, leading to damage, bad

Key words and phrases:

Arriving in bulk, too early

Not when promised

Lack of planning

Trade contractors driven by

programme but logistics cannot be

relied upon to keep up

Not JIT

Does not respond to variable demand

No incentive for suppliers to plan

timely delivery

Outsourced to the cheapest supplier

Not enough pre-assembly

Risks on trade contractors.


housekeeping and health and safety problems.

� Pre-fabricated items are not used enough.

� Contractors’ management want to transfer all risk in materials onto subcontractors, to make life easier.

9. Here are some perceptions of logistics issues in the

construction industry. Do you agree?

The service levels that customers expect are

poorly understood

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%

Strongly agree Agree Disagree Not sure

There are too many suppliers managed under

adversarial contracts rather than service level

agreements

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

Strongly

agree

Agree Disagree Not sure

Construction is not yet investing enough in

technologies which enable the sharing of

information between customers and

suppliers

0.0%10.0%20.0%30.0%40.0%50.0%60.0%70.0%

Strongly

agree


Capture and management of data does not

generally extend beyond purchasing

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

Strongly

agree


70% agree service levels not

understood

75% agree too many suppliers under

adversarial contracts

90% agree not enough ICT

65% agree data is unknown beyond

purchasing


There is little visibility of good in the supply

chain. Standard technologies in other industries,

such as bar coding, have made little impact.

Hence it is difficult to reduce material waste

because it cannot be tracked.

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

Strongly

agree


The way goods are sourced and distributed

is largely driven by suppliers. It leads to a

confusing system of distribution which

conceals waste

0.0%10.0%20.0%30.0%40.0%50.0%60.0%70.0%

Strongly

agree


Material wast is taken for granted and built

into the cost plan. Waste of any

description is not widely monitored and

few targets for improvements are set

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

Strongly

agree


More complete information is needed from

designers to enable better estimating of

quantities

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

Strongly

agree


Buyers tend to over order because of

bulk ordering contracts and percieved

risks of uncertain estimates and losses

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

Strongly

agree


75% agree not enough tracking of

materials

75% agree distribution system

conceals waste

80% agree waste is taken for

granted and built in to the cost plan

85% agree better design information

is needed for estimating quantities

70% agree buyers tend to over-order


Estimates of quantities are often

inaccurate and include allowances for

the unknown

0.0%

10.0%20.0%30.0%40.0%50.0%

60.0%70.0%

Strongly

agree


80% agree estimates of quantities

are inaccurate with allowances for

the unknown.

10. In the types of projects you are currently involved in, which

of these models best fits how logistics is managed?

In the types of projects you are currently involved in,

which of these models best fits how logistics is managed.

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

1

1. Contractor goes to wholesaler to

pick up materials then drives to site.

2. Contractor has materialsdelivered to the site.

3. Contractor carefully analyses

material requirements, segments the

ordering processes and has call-offarrangements.4. Contractor coordinates start to

end process and tags people,

information and material flows.

5. Not sure

85% use the traditional methods 2 or

3

<10% use the alternative method 4,

but see conflicting evidence in Q12

11. Looking at the input and output sides of your role, tell us

which of these methods of logistics applies, and then which

method you think should apply.

Logistics on your INPUT side

0.0%5.0%

10.0%15.0%20.0%25.0%30.0%35.0%40.0%45.0%50.0%

Buyer contracts out

logistics to third

party

Buyer manages

logistics in-house

Seller contracts out

logistics to third

party

Seller manages

logistics in-house

Actually happens

Should happen

Logistics on your OUTPUT side

0.0%5.0%

10.0%15.0%20.0%25.0%30.0%35.0%40.0%45.0%50.0%

Buyer contracts out

logistics to third

party

Buyer manages

logistics in-house

Seller contracts out

logistics to third

party

Seller manages

logistics in-house

Actually happens

Should happen

The purpose was to see whether the

industry thinks the buyer or the seller

should be responsible for logistics.

Given the high proportion of lorries

either owned by manufacturers or

contracted to manufacturers, it is

surprising to see that respondents

claim about 60% of logistics is

managed by the buyers.

The same pattern exists for input and

output transactions.

Asked who should manage logistics,

the respondents would prefer to see

a move towards in-house

management. This probably reflects

a disenchantment with hauliers who

merely pick up and deliver.


12. Here as some 'alternative' methods that affect logistics.

Please choose any that your organisation uses in the sector you

identified in question 2.

Alternative methods that affect logistics that your

organisation uses

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

35.0%

40.0%

45.0%

50.0%

1

Just-in-time delivery to the

workplace

On-site logistics gang

Consolidation (logistics) centre

Off-site assembly

Synchronised supply chain

Inter-modal transport

Electronic ordering AND tracking

Are there any others?

'In Plenty of Time' delivery Strategic partnering Managed warehousing Supply & store on site prior to use Purchasing club

A surprisingly high proportion claim

to be using JIT deliveries. It

emerged in the workshops that some

constructors interpret JIT as meeting

a delivery schedule that is governed

by site constraints rather than

demand for materials at the

workplace.

Although only 10% say they are

using method 4 (see Q10), a

surprisingly high proportion claim to

be using some of the alternative

techniques in this method. This

difference may reflect how

respondents interpreted the

meanings.

Purchasing clubs are an emerging

trend and may support initiatives to

minimise waste.

13. When you buy materials do you know how much the

delivery costs?

When you buy materials do you know how much the

delivery costs?

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

Generally, we do not

know what the delivery

costs. It is included in

the price.

We know the delivery

cost of MOST things we

buy.

We know the delivery

costs of SOME things

we buy

>50% don’t know the cost of delivery

<30% know the cost of delivery of

most things

14. When you buy materials do you know where they come

from and how far they travel?

When you buy materials do youknow where they

come from and how far they travel?

0.0%5.0%

10.0%15.0%20.0%25.0%30.0%35.0%40.0%

Generally, we do not

know the origin of things

we buy.

We know the origin of

MOST things we buy.

We know the origin of

SOME things we buy.

>25% do not know the origins of

supplies

<35% know the origins of most

things


15. On average, 15% of the materials supplied to construction

sites in the UK are not actually used in the project and becomes

waste. Why do you think this happens?


� Buyers over-order, rounding up ‘just in case’ and trying to avoid minimum delivery charges rather than avoiding waste.

� Damage occurs due to bad handling, poor site management, theft and the culture of people who are motivated only to get the job

done.

� The need for speed and the frequency of client changes make it cheaper to use new materials rather than take time to seek discarded

ones, especially since the 15% is covered in the costs at tender

stage.

� Design teams don’t work with architectural dimensions to reduce off cuts. Most waste is from floor, ceiling and wall finishes.

� The lack of proper communication in the supply chain means the construction process is fragmented and there is a history of

inaccurate estimating so sites become a mass of waste and surplus

material, supposed to be very ‘active’ but actually unsafe and messy.


Over-ordering ‘just in case’

Avoid minimum delivery charges

Damage due to site environmental

factors

Cheaper to use new than off cuts

Design dimensions induce waste

Lack of communication in a

fragmented industry

Inaccurate estimating.

16. If the industry's average waste is 15%, what is your

estimate of waste for the sector you indicted in question 2?

If the industry's agerage waste is 15%, what is your estimate of waste

for the sector you indicated in qu 2?

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

1. Less than 15% 2. 15% is about

right

3. More than 15% 4. Not sure

Correlating responses to Questions 2 and 16 gives an estimate of waste

in each sector:

Public

Housi

ng

Private

Housin

g

Schools

Univ

ers

itie

s

Health

1. Less than 15%

2. 15% is about right

3. More than 15%

4. Not sure

0

2

4

6

8

10

12

14

16

1. Less than 15%


3. More than 15%

4. Not sure

Industry Role comparison with Estimate of Waste within that sector

It was difficult to frame this question

without leading the respondent. The

purpose was to get an industry

response to the 15% headline figure

and compare the relative levels of

waste across the segments.

Nearly 60% say waste is about 15%

or more.

This generally confirms what was

expected.

Many segments report 15% or more

There is not enough data to form a

view about some segments


Roads

Railw

ay

Central G

overn

ment

Com

merc

ial

Reta

il

1. Less than 15%

3. More than 15%0

2

4

6

8

10

12

14

16


1. Less than 15%


3. More than 15%

4. Not sure

Leis

ure

Utilit

ies

Airports a

nd p

orts

Industria

l

Oth

er

1. Less than 15%2. 15% is about right

3. More than 15%4. Not sure

0

1

2

3

4

5

6


1. Less than 15%


3. More than 15%

4. Not sure

17. Here are some suggested reasons for this waste. Estimate

what PROPORTION OF THE VALUE of materials supplied to sites

is a result of:

Over-ordering

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

35.0%

1. Less than

3%

2. 3% to less

than 6%

3. 6% to less

than 10%

4. 10% to less

than 15%

5. More than

15%

6. Not sure

Inappropriate or excessive packaging

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

35.0%

1. Less than

3%

2. 3% to less

than 6%

3. 6% to less

than 10%

4. 10% to

less than

15%

5. More than

15%

6. Not sure

45% say over-ordering is > 6%

49% say over-ordering is <6%

63% say packaging waste >3%.

This is a surprisingly high value.


Damage

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

35.0%

40.0%

45.0%

1. Less

than 3%

2. 3% to

less than

6%

3. 6% to

less than

10%

4. 10% to

less than

15%

5. More

than 15%

6. Not sure

Loss or theft

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%

1. Less than

3%

2. 3% to less

than 6%

3. 6% to less

than 10%

4. 10% to less

than 15%

5. More than

15%

6. Not sure

Unsuitable or faulty materials

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

1. Less than

3%

2. 3% to less

than 6%

3. 6% to less

than 10%

4. 10% to less

than 15%

5. More than

15%

6. Not sure

Off cuts that cannot be used in the project

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

1. Less than

3%

2. 3% to less

than 6%

3. 6% to less

than 10%

4. 10% to less

than 15%

5. More than

15%

6. Not sure

67% say damage waste >3%

37% say loss and theft >3%

40% say waste from unsuitable or

faulty materials >3%

68% say waste from off cuts >3%

18. For each of these reasons, what do you think is the root

cause and how can the logistics service reduce the amount of

waste due to this reason?

Over-ordering - root cause


� Estimators over-order to provide a safety net against damage/theft because they don’t want to pay for non productive labour waiting for

materials or to run short. The cost of delay is enormous compared to

the cost of over-ordering.


Safety net

Enormous cost of delay if short of

materials

Inadequate information/co-ordination

Laziness


� Inadequate information or co-ordination, or just mere laziness at the planning stage makes for bad specifications.

� Tendering is a rushed process leading to inaccurate pricing and faulty figures which design teams rely on to their cost.

� Deliveries are not sufficiently well organised or reliable.

� More precision is needed in determining exact requirements of designer and client, plus material suitability – with more

understanding of the basics of lean, together with an assessment of

re-usability of materials.

Rushed, inaccurate tenders

Delivery perceived to be unreliable.

Over-ordering - logistics solution


� More training is needed at the planning and specification stage, using model-driven scheduling.

� The earlier involvement of the client, contractor and supplier and the sharing of more information are needed to ensure accurate

quantities.

� Planning teams should allow more time for the sub-contractors to have their input

� Call off contracts should be established through multi-project consolidation centres regionally sited and managed by logistic service

providers.

� The earlier logistics companies can be involved, the better, preferably at tender stage.

� There need to be more flexible stockholder and merchant systems allowing smaller quantities to be provided without cost penalty.


Training

Sharing information

More time for trade contractors to

estimate

Call offs from consolidation centres

Logistics company included from

tender onwards

Supply system to be more flexible.

Inappropriate or excessive packaging - root cause


� Manufacturers and suppliers are the villains here, being highly conservative. They think more packaging is better packaging and

that packs look nice with the company logo. They seek to avoid all

risk.

� Despite their crocodile tears multi-nationals don’t give a damn about the environment.

� There is poor care of materials on site and poor skill levels too. But manufacturers have no incentive to collect piles of unwanted or

reusable packing.

� The practice of over batching on site (for example in bags of repair material) often ruins the planning of materials required.

� Contractors have smaller yards, rely on merchants to deliver and their small batching generates more packaging. Health and safety

requirements to reduce manual handling also lead to smaller

packages.

Key words and phrases

Suppliers avoiding risks

Big business doesn’t care

No incentive to reuse packaging

Small contractors tend to use small

batches, more packagaing

Inappropriate or excessive packaging - logistics solution


� Suppliers/manufacturers need to take ownership of packaging as well as product, building in principles or re-usability, making package part

of purchase agreements and running better take-back schemes

� Handling technology needs improvement and rationalisation – for


Suppliers need to take ownership of

packaging; take back schemes

Consolidation centres


example availability of half size pallets, having a system of rigid

cradle and returnable banding and wrapping, and paying more thought to lifting problems on site.

� Regional or central pick up points or consolidation centres could benefit contractors and logistic teams could specify to the supply

chain the requirements for products for particular sites.

� Supply chains need consolidating so products are pulled rather than pushed to the supplier

� Non reusable packing should be taxed.

Pull only products needed

Taxes

Damage - root cause


� Careless handling by drivers, operatives, site management and untrained workers. There is a lack of ownership of materials

between delivery to site and installation resulting in poor storage,

poor handling and thus more damage.

� Bad site management with a lack of training and supervision, storage being poorly thought out, and items often not dry and having to be moved several times.

� Inappropriate or incorrect use of tools and equipment, for example items are often delivered on large vehicles with appropriate lifting

equipment, but to sites which may be restricted in size, so the

equipment is useless and materials are pushed or dragged around

with what’s available.

� Items are often delivered too soon and/or insecurely on transport and people start opening packing to see what’s inside.

� Poor access to the site and poor skill levels all round.


Careless handling

Unsuitable site arrangements

Wrong vehicles and tools

Delivered too soon and then meddled

with.

Damage - logistics solution


� Sites need to be far better planned and managed, creating defined areas for materials storage for each contractor, protected from

weather and with a hard surface.

� Management on site should be by a logistics company or specially designated persons.

� Increase use of JIT practices and ensure logistic teams are flexible enough to respond.

� More training is needed for handling and the industry needs to develop a culture which values materials properly.

� Tie payments to the reduction of damage or provide some financial incentive to site operators.


Better site planning

Logistics specialist on site

JIT

Training in handling and value of

materials

Incentives ton reduce damage.

Unsuitable or faulty materials - root cause


� In joint top placed are inadequate quality control measures in production and poor specifications. Materials are often not tested for

the purpose intended and there is a lack of dialogue between buyer

and suppliers.

� Poor communication between the varies parties.

� Changes in specifications or design by the client at later stages.

� Whoever is procuring not procuring the right thing according to


Poor specification

Lack of ‘fit for purpose’

Late changes

Cost cutting

Lowest price purchasing.


specifications or drawings – sometimes they may be trying to

cheapen the job or designers may be specifying the wrong thing in the first place.

� The lowest price culture of clients.

Unsuitable or faulty materials - logistics solution


� Improve quality control systems at the manufacturer stage and install quality control checks at point of reception on site.

� Ensure specifications are carried out to better standards for purpose required with bench marks standard and inspection systems to avoid

materials needing to be rejected on site.

� Provide better training in design specification logistics and procurement with corrective action reporting systems.

� Have better communications in the supply chain and greater transparency of project requirements.

� Learn lessons from the automotive industry.


Quality control at site gate

Specify materials fit for purpose

Corrective reporting systems

Transparency

Automotive industry can do it!

Off cuts that cannot be used in the project - root cause


� Poor design planning and scheduling.

� Mass production systems, though having cost benefits, mean limited sizes and material loss or wastage. Standard lengths may be ordered

when non-standards would be better suited. Stock sizes will never

suit all industry requirements.

� Poor tradesmen/operative workmanship and perception that ordering more is cheaper.

� Poor design and scheduling, relying on operatives to ‘sort it out’ on site, even though their culture is to think of ease and time rather

than waste and cost.

� Designers may need to design sizes of rooms to reduce the need for cutting and to show awareness, for example of ceramic tile size.

Present dimensions can often be arbitrary.


Poor planning and design around

stock sizes

Reluctance to negotiate non-standard

sizes

Cheaper to use new than off cuts

Trades left to ‘sort it out’.

Off cuts that cannot be used in the project - logistics solutions


� Develop closer co-operation between contractors and sub-contractors and involve them in the design process. This would lead to greater

accuracy and understanding and, with education, to enable them to eliminate many cut-offs.

� Use off-site assembly as much as possible.

� Recognise the problem and form organisations that collect unwanted materials for free and match them to demand from other customers

or building sites.

� Train procurement staff about material sizes and link up with designers to make them aware of the implications of waste when

standard sizes aren’t used.

� Designers should talk to manufacturers to ensure new standards meet their requirements.

� Plan a cascade of recycling on site with high-value reuse systems and


More contractor input to design

More offsite assembly

Services to exchange off cuts

Dialogue between designers and

manufacturers

More recycle/take back schemes.


start take-back schemes.


19. Are there any reasons we've missed? What are the root

causes and can you suggest logistics solutions?


Causes Solutions

The negative culture that waste

doesn’t matter, and in any case is

paid for by contingency

Management should be made

properly accountable for waste

generated. Site agents need to

be fired up and given incentives

to reduce waste. Builders could

franchise out waste control to

sub contractors running waste

depots or contractors could

employ specialised individuals

charged with helping save waste.

Buildings are fundamentally over

complex and materials come in

too many finishes and

specifications, added to which ,

materials in mixed packages of

wood, metal, plastic and

cardboard, require a great

amount of time and effort to

separate.

Simplification and standardisation

Complacency and laziness of

many operatives

Education to waste not want not

approach, more sense of

ownership and awareness of

cash, then improvement of site

storage conditions to help them

adopt waste minimisation policies

Changes by client due to bad

briefing at design stage

Better communication and pre-

planning, ideally involving

suppliers, plus more quality

control at the pre-production

stage.

Collaboration and integration

between people and systems in

the building trade is poor with

little appreciation of each others’

roles

More understanding of each

others roles and the constraints

worked under is needed – for

example designers need more

practical knowledge of material

use. A little less haste and better

briefing sessions are needed.


Managers held accountable for waste

Standardisation

Education about value of waste

Pre-planning and quality control

Less haste, better briefings

20. In the construction projects you are involved in, what

schemes, tools or services are used to minimise or manage the

material waste that arises?


� (Automated) waste segregation planning with designated skips for sorting on site and subsequent recycling

� Training to avoid waste from design through buying to construction stage

� BRE’s SMART START waste recovery tool


Segregation and recycling

Training

SmartStart

KPIs

‘Green team’ on site


� Closer monitored KPIs

� Environmental Planning and/or appointment of a ‘green team’ on site

� Kanban systems

� Materials accurately quantified by computer software

� Off-site manufacture and/or pre-designed modular components

� Reuse and sharing of resources between sites

� Pulling products to a consolidation centre.

Kanban

Accurate estimates with ICT

Off-site assembly

Sharing between sites

Consolidation centre.

21. Suggest at least one way that existing logistics services

could be 'reversed' to remove material construction waste so

that it can be reused or recycled economically


� Collection/return of packaging – for example pallets and plasterboard to encourage reuse

� Centralised waste collection sites with suppliers and manufacturers getting tax breaks to collect for recycling

� Give bonuses for removing more waste

� Seek new partnerships in recycling to take logistic services away from the market and into the hands of specialist contractors

� Provide increased training and awareness of problems and potential solutions

� Standardise packages

� Shorten product ranges so that unused products from one project are suitable for use with the next

� Use more prefabricated products

� Make waste recycling containers mandatory on sites and use the law to change what is defined as waste so that it can be more easily

reused

� Remove VAT from materials made with more than 30% recycled material

� Use empty lorries more efficiently once their cargoes have been delivered on site.


Collect and return

Tax incentives

Bonuses

Partnerships with specialists

Training

Standardisation.

22. What do you think would be the single most effective action

the construction industry could take to eliminate material waste

before it arises?


� Use more prefabricated products

� Disseminate good practice on waste management for small build projects as well as large schemes

� Get clients to understand the cost of going green so that short term thinking doesn’t prevent longer term involvement & get designers

and clients to agree fully on what are the goalposts at the outset

� Improve detail/precision of design so that waste is designed out and less has to be corrected on site


Off-site assembly

Publicise best practice

Expose cost of waste and benefits of

change

Design out waste

Managers made accountable

Taxes


� Make top level managers more accountable by publicising those who generate most waste

� Use taxes to penalise wasteful practice and/or make waste disposal statutory

� Give incentives to the work force, even have competitions to encourage them to suggest waste avoiding methods

� Ensure more time and commitment is afforded to tightening specifications and materials far ahead of starting on site

� Have localised storage sites to reduce transport costs and to allow trading of material between companies

� Have the building industry set up a waste recycling body

� Make less use of buying consortia that fragment effective long term supply chains and force them to use cheap low spec components.

Incentives

Allow time for planning

Localised distribution facipities.

23. Finally, thinking about your role that you told us in question

1, to what extent do you think you could influence waste

minimisation?

To what extent do you think you can influence

waste minimisation

0

20

40

60

80

100

Quite a lot A Little Not at all Not sure

<This chart is incorrect. AY to

investigate.>


CO2 survey

This work is summarised in Appendix 2.


Appendix 2: CO2 survey

The purpose of the CO2 survey was to determine the impact of moving to

alternative logistics techniques. This information is derived from separate work that Constructing Excellence has done at the London Construction Consolidation

Centre (LCCC) at Bermondsey.

WRAP CO2 Modelling Survey WRAP CO2 Modelling Survey

December 2006

Introduction

� Model description

� Data obtained

� Initial results for 2007

� Next steps


Location of 341 suppliers

Contractors sideManufacturing side

Supply production costs

Transportcost

Supply toDepot

Satellite war ehousing costs

Satellite to Main

Transportcost

Main to Main Inter-depot

Transportcost

Main Depot cos ts

Mai n Depot costs

Main to

Satellite Transportcost

Wholesalers

Demand side Transportcost

Depot toCustomer

Customers

Method One Contractor goes to wholesaler - capability




Transportcost

Supply toDepot

Satellite war ehousing costs

Satellite to Main

Transportcost


Transportcost

Main Depot cos ts

Mai n Depot costs

Main to


Wholesalers


Depot toCustomer

Customers

Method Two Contractor who gets materials delivered to site - capability



Transportcost

Supply toDepot

Satel lite warehousing costs

Satellite to Main

Transportcost


Transportcost

Main Depot cos ts

Mai n Depot costs

Main to


Wholesalers


Depot toCustomer

Customers

Method Three Contractor who segementsmaterials - capability




Transportcost

Supply toDepot

Satel lite warehousing costs

Satellite to Main

Transportcost


Transportcost

Main Depot cos ts

Consolidation Centre

Main to


Wholesalers


Depot toCustomer

Customers

Method Four Tagging information, people and material flow - capability

C02 Survey data

– Between November 2005 and July 2006

• Date. Supplier location, pallet equivalents, vehicle type

• 480 suppliers delivered in to Bermondsey CCC for Unilever, of which 341 had a recognisable address

• The 480 suppliers delivered 7673 pallets

• 341 suppliers used in model delivered 2928 pallets

• 97%delivery reliability

• 5-15% waste in centre at end of project.

• 79% reduction CO2 compared to type 2 and three


Method

� The C02 survey represented above seeks to look at logistics methods in the construction industry and the C02 implications for the various four types captured in our study. Based on the information gained at the LCCC the survey looks at the standard logistics network used in construction and has modelled each method based on loads. The results show that alternative logistics methods do not have a detrimental effect on C0s, as long as the utilisation of the vehicle is used and time delays are minimised. Typically placing a consolidation centre 4=8 miles from site will save 79% of the C02, based on the reduction of vehicles going to site and the reduction of Journey times.

� Method one comprises those contractors, typically jobbing or working in the RMI sectors, these contractors will journey to the local wholesaler using light van up to pick up materials for works lifting a maximum up to 1000KG, 1-3 pallets typically much less. The journey from the business to the wholesaler and site is 10-15 miles on average.

� Method two comprises the wholesaler delivering to a site using LGV vehicles up to 26 tonnes in weight, (average delivering in a multi drop process, this utilisation of trucks and loads is 34% better than method one. Typically 7-9 pallets min.

� Method three as above however 60% or materials delivered to centre direct from wholesaler and 40% from manufacturer, these vehicles travel to site and will spend approximately 1.5 hours weighting and unloading at the site entrance, Again load is 7-9 pallets. C02 as method two.

� Method four comprises tagged information and materials flows using just in time methods, from order, to delivery to centre and delivery to site using consolidated loads, Vehicles into to centre\(as would be delivered to method 2 and three) is 2500 vehicles compared to 730 vehicles out consolidated load, this model saved 79% of the C02 on Final 8 miles., hence .33 factor.

� Information on Inter modal shifts for the delivery of construction materials and its impacts on C02 are negligible and suited to major projects, where materials such as aggregated and steel are consumed at 1300 tones/ 600 tonnes respectively per week and that there is an adjacent rail head., the uses of inland waterway could be used, the loads to be carried on narrow boat is up to 150 tonnes and 350 tonnes.


Appendix 3: Logistics providers

This information was derived from a list of ‘top 100’ logistics contractors supplied by the Chartered Institute of Logistics and Transport as well as a search of other logistics contractors that work only in construction (see not ranked). Only those with a declared interest in construction are listed. Rank Company URL Contact Position Telephone E-mail

1 DHL Logistics www.dhl.com Mike Holley 01908

244000

[email protected]

2 Wincanton www.wincanton.co.uk Gareth

Smith

Business Development Manager 01249

710438

gareth.smith@wincanto

n.com 3 Kuehne &

Nagel

www.kuehne-nagel.com Tony Byrne General Manager Business

Development

07798

792406

tony.byrne@kuehne-

nagel.com 5 TNT Logistics

UK

http://www.cevalogistics.com/ Richard

Milne

National Facility Manager 07796

998131

richard.milne@tntlogisti

cs.co.uk 6 Gist www.gistworld.com Bryan

Jones

Commercial Director 01256

891111

bryan.jones@gistworld.

com 9 NYK Logistics

(UK)

http://www.ne.nyklogistics.com/ Brian

Davies


287300

[email protected]

gistics.com 18 Eddie Stobart http://www.eddiestobart.co.uk/ Daphne

Tweddle

Business Development and

marketing director

01228 822

500

tweddled@eddiestobart

.co.uk

20 WH Malcolm http://www.malcolmgroup.co.uk/ Jim Clarke Business Development Manager 01505 324 321

21 ANC Group http://www.anc.co.uk/index1.asp Mark Mitchelle

Business Development Director 0800 262123

[email protected]

24 Innovate Logistics

http://www.innovatelogistics.com/ Tim Bolan Business Development Director 01623 727 250

[email protected]

37 Lloyd Fraser Logistics

http://www.lloydfraser.com/ Mike Dennis


[email protected]

38 Stiller Group www.stiller.co.uk Larry

Boulton

Business Development Director 01642

607777

[email protected]

.uk 39 Canute

Haulage Group http://www.canutegroup.com/ Warren

Mark Business Development Director 01708

867001 [email protected]

43 Hanbury Davies

http://www.hanburydavies.co.uk/ Kevin Smith


[email protected]


49 Currie European

Transport

http://www.currie-european.com/currie_european_transport_ltd/in

dex.htm

David Ross Group Commercial Director 01387 267 333

[email protected]

54 Sutton & Son http://www.fsuttonandson.co.uk/ Marcus

Sutton

Manager 07785 257

866

marcis@fsuttonandson.

co.uk 61 CM Downton http://www.downton.co.uk/ Andrew

Downton

Managing Director 01452

720242

63 TM Logistics http://www.tmlogistics.com/ David Bratton


64 Rhys Davies http://www.rhysdavies.co.uk/ Mark

Heggarty

Director 029

20810587

mark.hegarty@rhysdav

ies.co.uk

76 Seafield

Logistics

http://www.seafield.co.uk/ Mike Hyde Business Development Manager 01909

475561

[email protected].

uk

79 Maxi Haulage http://www.maxihaulage.co.uk/ Richard

Atkinson


272531

richardatkinson@maxih

aulage.co.uk

84 Aspray

Transport

http://www.aspraytransport.co.uk/ David

Turpin

Sales Director 01902

638213

sales@aspraytransport.

co.uk

98 Erith Haulage

Co

http://www.erith-group.co.uk/ Mike Lynch Business Development Manager 0870-950

8800

[email protected]

Not ranked in top 100:

CSB Logistics www.csblogistics.co.uk Matt

Barker

Director 07733

103232

matt.barker@csblogisti

cs.co.uk

Christian

Salvesen

www.salvesen.co.uk Stephen

Hayward

Managing Director 01604

737402

stephen.hayward@salv

esen.com

CAT Logistics www.cat.com Andrew

Radley


825800

[email protected]

m

Wilson James www.wilsonjames.co.uk Gary

Sullivan

Managing Director Construction

and Aviation Services

01702

346222

gary.sullivan@wilsonja

mes.co.uk

Clipfine www.clipfine.com Chris

Massie

Business Development Director 08456

128811

[email protected]

m

Elliot Thomas www.elliot-thomas.co.uk John Self Managing Director 0870 6000

026

john.self@elliott-

thomas.co.uk

Wyse Logistics Neill

Jackson

Regional Director 020 8861

9312

NeillJackson@laboursit

e.com

ASITE www.asite.com Huw

Davies

020 7749

7880

[email protected]

BIW www.biwtech.com Steve

Cooper

Sales Director 01483

712620

steve.cooper@biwtech.

com

Written by: Adrian Blumenthal and Adrian Young

Published by

Waste & Resources The Old Academy Tel: 01295 819 900 Helpline freephone

Action Programme 21 Horse Fair Fax: 01295 819 911 0808 100 2040

Banbury, Oxon E-mail: [email protected]

OX16 0AH www.wrap.org.uk

Construction Logistics Survey

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