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  • Supply chain management waste minimisation toolkit 2013

    1

    Supply Chain Management Waste Minimisation Toolkit

    VERSION 2013.01

    ORIGINAL AUTHORS:

    RMIT University Research Team Professor Kerry London Associate Professor Tayyab Maqsood Dr Malik Khalfan Mr Peng Zhang Mrs Jessica Siva Mr Rob Anderson

    DOCUMENT CONTROLLER

    SIGN OFF AUTHORITY

    DATE DUE FOR UPDATE: JANUARY 2015

    UPDATED BY

  • Supply chain management waste minimisation toolkit 2013

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    Executive Summary

    This tool kit has been developed as part of a research project undertaken by RMIT entitled

    A Supply Chain Management Self-Assessment Framework for Waste Minimisation for the

    Residential Sector which was funded by the Beyond Waste Fund and managed by

    Sustainability Victoria. The project had four objectives including; describe and analyse

    barriers and enablers to waste minimisation practices through a literature review and an

    audit of the two large house building organisations; develop the Self-Assessment

    Framework; Validate the Framework and develop guidelines; and finally disseminate the

    project outcomes. The aim of this Guideline document is to explain the context of waste

    minimisation, principles of supply chain management practices and the steps involved in

    using the self-assessment Framework. This document is divided into three sections.

    Part A provides a summary of the literature review on construction waste minimisation. The

    review summary presents key enablers and barriers derived from the literature from

    research conducted internationally. The key enablers identified include; development of

    strategic procurement to recruit supply chain partners; improving organisational

    communication across units to facilitate change; knowledge of the problems related to waste

    minimisation and willing to take actions; and increasing senior management support to drive

    the change. The key barriers highlighted during the interviews include poor organisational

    communication across units to facilitate change; perception that direct costs was more

    important than the whole of life costs; lack of cooperation/maturity from suppliers to minimise

    waste; and lack of strategic procurement efforts to engage supply chain to reduce waste.

    Part B describes an Implementation Plan with recommendations on governance,

    timeframes, personnel; monitoring and review and examples of where the Framework could

    be embedded in existing organisational initiatives and/or processes. Three exemplar

    Frameworks are then presented for Organisation A and Organisation B, large volume

    residential construction organisations. Examples presented in this part including a Profile

    showing average level of maturity in the Self-Assessment Framework and Action Plans

    providing details on how to move from Level 1 to 2 through to 3 and then 4.

    Part C describes the process that an organisation can undertake to develop self-assessment

    frameworks using an action research methodology. Ten generic steps are highlighted for

    framework development, validation and implementation. An Action Plan to develop the

    Frameworks is also presented which is divided into five generic phases. This part ends by

    providing lessons learnt and recommendations such as ensuring senior management

    support and having waste minimisation policy. A Communication and Engagement Plan and

    stage organisational wide events are essential to disseminate progress on the project and to

    have continuous buy-in from all staff.

  • Supply chain management waste minimisation toolkit 2013

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    Table of Contents Supply Chain Management Waste Minimisation Toolkit ........................................................ 1

    Executive Summary .............................................................................................................. 2

    Part A Introduction ................................................................................................................ 5

    A.1 Project Background ..................................................................................................... 5

    A.1.1 Development of Toolkit ......................................................................................... 5

    A.1.2 Intent of Guideline ................................................................................................. 5

    A.2 Context of waste minimisation ..................................................................................... 6

    A.2.1 The problem of construction waste ....................................................................... 6

    A.2.2 Benefits ................................................................................................................ 7

    A.2.3 Barriers and Enablers ........................................................................................... 7

    A.2.4 Supply chain management principles .................................................................... 9

    Part B Implementation ......................................................................................................... 12

    B.1 Instructions ................................................................................................................ 12

    B.1.2 Governance ........................................................................................................ 12

    B1.3 Timeframes .......................................................................................................... 12

    B1.4 Personnel ............................................................................................................ 13

    B1.5 Monitoring and Review ........................................................................................ 14

    B.1.2 Embedding the Self-assessment Framework in organisations ............................ 15

    B.2 Self-Assessment Framework ..................................................................................... 16

    B.3 Profiles ...................................................................................................................... 20

    B.4 Action Plans .............................................................................................................. 27

    Part C Evolution of Toolkit ................................................................................................... 30

    C.1 Procedure ................................................................................................................. 30

    C.2 Action Plan ................................................................................................................ 31

    Phase 1: Project Initiation and Governance Structure .................................................. 31

    Phase 2 Framework Development ............................................................................... 31

    Phase 3 Validation of Framework ................................................................................ 32

    Phase 4 Implementation of Framework ........................................................................ 32

    Phase 5 Review of Framework .................................................................................... 33

    C.3 Lessons learnt and recommendations ....................................................................... 33

    APPENDIX 1 ....................................................................................................................... 35

  • Supply chain management waste minimisation toolkit 2013

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    Table of Contents ................................................................................................................ 36

    1.0 Introduction ................................................................................................................... 37

    2.0 Waste in Construction ................................................................................................... 38

    2.1 Data and benchmarking ............................................................................................. 38

    2.2 Sources and causes .................................................................................................. 44

    2.4 Construction waste minimisation ............................................................................... 47

    2.5 Summary ................................................................................................................... 50

    3.0 Supply Chain Management an overview .................................................................... 50

    3.1 Definitions .................................................................................................................. 51

    3.2 Benefits and barriers ................................................................................................. 52

    3.3 Lean Manufacturing ................................................................................................... 54

    3.4 Supply Chain Management and the construction sector ............................................ 55

    3.5 SCM in Australia ........................................................................................................ 56

    3.6 SCM Internationally ................................................................................................... 58

    3.7 Current viewpoints and discussion............................................................................. 59

    3.8 Summary ................................................................................................................... 60

    4.0 SCM and waste minimisation in the residential sector ................................................... 62

    4.1 Integrated SCM ......................................................................................................... 63

    4.2 SCM & waste minimisation in the residential sector ................................................... 64

    5.0 Conclusion .................................................................................................................... 66

    6.0 References.................................................................................................................... 67

  • Supply chain management waste minimisation toolkit 2013

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    Part A Introduction

    A.1 Project Background

    A.1.1 Development of Toolkit

    This Toolkit has been developed as part of a research project entitled A Supply Chain

    Management Self Assessment Framework for Waste Minimisation for the Residential

    Sector, which was funded by the Environmental Protection Agency Waste Fund and

    managed by Sustainability Victoria.

    The Environmental Protection Authority Victoria publicised an Expression of Interest in late

    2010. Professor London initiated a submission in consultation with the Australian Housing

    Supply Chain Alliance and colleagues at RMIT, Associate Professor Tayyab Maqsood and

    Associate Professor Malik Khalfan to conduct an Action Research Project to develop a Self

    Assessment Supply Chain Management Waste Minimisation Framework for two

    organisations in the housing sector. RMIT University is the lead organisation for this project

    on behalf of the Australian Housing Supply Chain Alliance.

    The project was undertaken from 21 December 2012 to 28 February 2014.

    Two research assistants were employed on this project, including Mr Peng Zhang and Mrs

    Jessica Siva. Both of the research assistants were PhD candidates in the School of

    Property, Construction and Project Management, RMIT University. In addition, an Industry

    Research fellow, Mr Rob Anderson was employed on the project who is also the Chair of the

    Alliance.

    A research Ethics Application was submitted for the project to the Design and Social Context

    College Human Ethics Advisory Network (CHEAN), a sub-committee of the RMIT Human

    Research Ethics Committee (HREC) on 24 January 2013 in accordance with the Australian

    National Statement Code on Ethical Conduct in Human Research. The project was approved

    and was awarded the approval number of CHEAN B-2000783-01/13 on 28 February 2013.

    The project had four objectives and four phases including; describe and analyse barriers and

    enablers to waste minimisation practices through a literature review on international trends

    and an audit of the two large house building organisations; develop the Self-Assessment

    Framework; Validate the Framework and develop guidelines and finally disseminate the

    project outcomes. The core focus of the project was the development of the Framework

    using an Action Research Project Methodology involving rigorous data collection and

    analysis; followed by the development of guidelines in the form of this Toolkit.

    A.1.2 Intent of Guideline

    The aim of this Guideline is to explain the context of waste minimisation, principles of supply

    chain management practices and the steps involved in using the self-assessment

    Framework.

    This document tells you how to create benchmarking profiles of supply chain management

    practices within your organisation aimed at reducing physical construction waste. The

    Framework and Implementation Plan should and can be customised by other organisations.

  • Supply chain management waste minimisation toolkit 2013

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    Both specific advice on using the Framework and the philosophy and general design

    principles behind the Framework are covered. Background information on waste

    minimisation and supply chain management explain the ideas that have underpinned the

    development of the Framework.

    A.2 Context of waste minimisation

    This section provides you with statistics and information at an aggregate level across

    Australia and the states and helps to explain the significance of the problem. The practical

    steps to explain how to use the guideline are in Part B and you may decide not to read Part

    A, However, we would suggest that you read Part A because it helps to impress upon you

    the reason why waste minimisation is so important. Part A also explains the supply chain

    management approach taken and will help you to make more sense of Part B and what the

    senior executives in your organisation had in mind in relation to waste minimisation as a long

    term strategy when they designed the study with the RMIT Research team. The complete

    literature review has been provided in Appendix 1.

    A.2.1 The problem of construction waste

    The management of the problem of construction and demolition materials waste is often

    underpinned by an analysis of data including such measures as; volume of waste generated;

    volume of waste transported to landfill; volume of waste recycled; carbon dioxide equivalent

    and embodied energy; cost of transportation to landfill and landfill levy cost. This type of data

    can then provide baseline targets for action plans that can be monitored. The information

    can be provided at an industry level on a regional basis which is often aggregated or can be

    developed at site and organisational level. Aggregated data is more useful to consider when

    reporting or evaluating industry policy and sectoral level interventions. Site and organisation

    level data is more useful for companies to use when they are attempting to implement

    organizational benchmarking and developing and evaluating the impact of their action plans.

    Unfortunately this type of data is not readily available. It has been suggested that

    construction and demolition waste can account for approximately 30% of all solid waste

    streams and hence this has prompted national and/or regional policy development and

    implementation strategies in various countries in the past decade such as UK, Australia,

    Singapore, Hong Kong, United States of America and the Netherlands. In Appendix 1 a

    more comprehensive literature review presents data comparing various countries.

    Australia is one of the worst if not the worst performer in the world. Therefore it is not

    surprising that waste in construction has been identified as a significant problem to address.

    Waste being transported to landfill in Australia is also increasing.

    In Australia it has been estimated that the cost of disposal of waste generated during the

    construction of a residential house is between $2000 to $3000 per house. There has also a

    been suggestions made on the volume of waste generated in the construction of a volume

    builder house on a flat block to be 18 to 23 m3 of waste per house in Victoria (Hyder, 2011,

    p. 47).

  • Supply chain management waste minimisation toolkit 2013

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    A.2.2 Benefits

    Construction waste minimisation may involve many waste reduction activities which can lead

    to economic, social and environmental benefits. In terms of economic benefits, it is

    anticipated that significant savings can be made by construction organisations through

    reductions in material expense and waste disposal costs. With regards to social benefits, it is

    proposed that construction waste minimisation may improve design and construction

    integration skills, improve knowledge-based business processes and increase work safety.

    Finally, the most important benefits of waste minimisation is through environmental benefits

    through the effective reduction of excessive materials waste to landfill.

    A.2.3 Barriers and Enablers

    Despite the potential benefits of adopting waste minimisation practices substantial evidence

    (included in the literature review in the Appendix 1) has demonstrated that there is a gap

    between theory and actual implementation of the suggested practices for waste minimisation

    by construction organisations. Key barriers to effective implementation of waste minimisation

    practices include:

    Lack of economic incentives to reduce and avoid waste;

    Resistant to change;

    Unique nature of each project;

    Fragmented nature of the industry;

    Lack of awareness, interest or commitment to environmental issues;

    Perception that waste management is not cost-effective and is actually a costly and time consuming activity;

    Lack of training and tools to implement waste minimization strategies;

    Poor coordination and integration between various participants on projects; and

    Poor review and feedback loop mechanisms to provide information upstream.

    Various factors have been identified which can influence the successful implementation of a

    waste management plan by construction organisations including:

    Involvement of senior site staff;

    Commitment of top level management;

    Cooperation of sub-contractors and suppliers

    Support of on-site staff and workers, and other supply chain partners;

    Establishment of clear corporate policy, goals and objectives;

    Increasing workers environmental awareness;

    Support from government, clients; design consultants; and sponsors;

    Presence of clear and effective internal communication on waste management;

    Presence of waste management experience and experts; and

    Availability of recycling facilities.

  • Supply chain management waste minimisation toolkit 2013

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    Various studies in the UK, US, Singapore and Australia have examined the benefits of waste

    minimisation, barriers to waste minimisation efforts and enabling factors; and a more

    complete description is included in the Appendix 1.

    During the stage 2 of the action research project, the RMIT researchers identified the

    following barriers and enablers within the residential sector during the data collection with

    two house building organisations (Organisation A and Organisation B). Table 1 summaries

    the five most common barriers whereas Table 2 summarises the five most common and

    significant ideas/actions/strategies that would reduce physical materials waste onsite as

    perceived by the research participants within each of the organisations.

    Table 1: The key barriers

    Organisation A Organisation B

    Poor organisational communication

    across units to facilitate change

    Poor organisational communication across

    units to facilitate change

    Perception that Direct costs vs. Whole

    of life costs was more important

    Knowledge of problem vs. Lack of action

    Poor organisational communication of

    strategic objectives

    Perception that Direct costs vs. Whole of

    life costs was more important

    Lack of cooperation/maturity from

    suppliers to minimise waste

    Ordering error, over ordering, under

    ordering

    Lack of strategic procurement &

    Partnership

    Resistance to change (lack of incentives)

    Table 2: Enablers

    Organisation A Organisation B

    Develop strategic procurement &

    partnerships

    Develop strategic procurement &

    partnerships

    Knowledge of problem and take action Knowledge of problem and take action

    Initiate supplier development Initiate supplier development

    Improve organisational communication

    across units to facilitate change

    Change the perception of Direct costs vs.

    Whole of life costs by changing behaviours

    of senior management

    Increase senior management support to

    drive change

    Develop more off site manufacturing &

    prefabrication systems

  • Supply chain management waste minimisation toolkit 2013

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    Past work into construction waste minimisation, including the work done by EPA has

    suggested a number of key approaches for construction organisations that are seeking to

    reduce and avoid waste. This includes integrating waste management strategies into the

    design process; using offsite construction including prefabricated materials and products;

    conducting a waste minimisation assessment that examines opportunities for waste

    avoidance reduction, reuse and recycling; and incorporating waste minimisation targets and

    measures into organisations environmental management plans. One of the most common

    themes underpinning policy, research studies and public debate on waste minimisation is the

    need to focus on integration of the supply chain.

    The RMIT research project focussed on the introduction of supply chain management

    practice within construction organisations that may have the ability to influence waste

    minimisation across the housing sector. Since, upstream decisions and actions are just as

    important as site management actions therefore, the following brief discussion provides

    some background on supply chain management (SCM) principles.

    A.2.4 Supply chain management principles

    Supply Chain Management (SCM) has been proposed as a solution to the construction

    industry inefficiencies by many researchers (see more details in Appendices 1). It has been

    an approach on the national agenda for many countries for some time however; there is still

    a general lack of adoption in the industry.

    While originating from the manufacturing industries, improved efficiencies in the construction

    sector have been flagged for almost as long as construction has been around. It has been

    argued that the construction sector is one of the least integrated industries and in order to

    achieve economic and labour efficiencies in the construction sector there needs to be a

    restructure of the building supply chain. Many benefits can be achieved through SCM

    including; reduced costs; improved responsiveness and ability to changes; reduced

    uncertainty for project owners; increased service level; and facilitated decision making.

    The construction industry in general has been described as being resistant to change and

    failing to take a more holistic view of the industry and associated problems. Due to the

    temporary nature of projects and short-term nature of work, it is at times difficult within the

    construction industry to build up a reliable supply chain.

    Various details of studies in this area, both within Australian context and within other

    countries, have been included in Appendix 1. There are challenges to implementing SCM in

    the construction industry including short-term working arrangements, lack of trust/information

    sharing, limited customer focus, price-based selection and inefficient use of emerging and

    existing technologies. Issues such as lack of co-ordination and communication amongst

    supply chain actors has been said to be a limiting factor in the successful uptake of SCM in

    the construction industry.

  • Supply chain management waste minimisation toolkit 2013

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    The development of integrated supply delivery solutions have not been extensively recognised in

    the Australian residential sector. Ad hoc examples and applications by some major building

    companies have seen some limited success. However, this has not been diffused throughout the

    sector and thus has had little real impact on overall sector performance and individual company

    competitiveness. Whole-scale industry improvement requires a concerted effort to undertake a

    stepwise change. A key to the solution is to investigate successful examples of integrated supply

    chains which have resulted in productivity and/or innovation performance improvements

    (London and Siva, 2012).

    The concept of SCM has been implemented in the manufacturing sector since the 1940s.

    However, its transferability, adoption and diffusion in the construction industry especially in

    Australia has been slow. In summary there are three key reasons for this in relation to the

    house building sector:

    Low levels of managerial skills and knowledge

    Lack of implementation tools to support employees to develop SCM policies, processes and practices

    Lack of competitiveness in larger volume house build organisations and a subsequent lack of incentive for change and continuous improvement

    SCM has closely been linked to the lean approach. The objective of lean management is to

    achieve zero waste. A number of sources of waste have been identified including:

    overproduction, waiting, transportation, inappropriate processing, unnecessary inventory,

    unnecessary motion and defects. However, in brief, lean manufacturing principles have often

    been seen as difficult to implement in construction because of the same reasons it is difficult

    to implement supply chain management.

    One of the key challenges is that implementation tools are often borrowed from

    manufacturing but with little real understanding of the context of construction and thus little

    adaptation of the tools is undertaken. A Blueprint specifically targeting SCM for project and

    portfolio management in construction was developed by Professor London (2008). It

    attempts to identify portfolio and project based activities since there are many activities

    involved in SCM and these activities are implemented on projects as well as across the

    organization. The following Blueprint organises these activities according to four areas

    including:

    1. Developing supplier group strategy maps;

    2. Implementing strategic sourcing processes and practices;

    3. Streamlining supplier coordination systems; and

    4. Managing supplier performance for improved alignment

  • Supply chain management waste minimisation toolkit 2013

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    Figure 1: Blueprint Supply Chain Management project based industry (London, 2008)

    The approach taken in the action research project that underpins this guideline was that

    actions of the whole supply chain will ultimately reduce waste to landfill in the Australian

    housing sector. The action research project attempted to go further than simply documenting

    case studies of outcomes. This guidelines represents an attempt to move beyond the

    rhetoric of claiming that supply chain management is the answer to waste minimisation

    towards developing, piloting and validating a tool that could be embedded in organisations

    and that makes the concept of SCM more practical. The tool that was developed wereSelf

    Assessment Supply Chain Management Waste Minimisation Framework for two

    organisations. They were customised for the two organisations. These exemplars are

    presented in this guideline and used to explain the next step in implementation.

  • Supply chain management waste minimisation toolkit 2013

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    Part B Implementation

    B.1 Instructions

    After the Framework has been developed an Implementation Plan needs to be developed

    and put into action. This section provides guidance on an Implementation Plan in terms of

    governance, timeframes, personnel and monitoring and review after the Framework has

    been developed. This section also provides guidance by explaining an example of a

    Framework and the Profile that has been developed for an organisation. The steps to create

    the example Framework principles and the Profile are also described briefly in this Section

    and in a generic manner in Section C. A Framework can be developed for each of the

    subactivities described in the Blueprint in Section A. The scope of the Implementation Plan

    needs to be defined and then prioritising of the Supply Chain Management set of activities is

    required.

    B.1.2 Governance

    A Project Steering Committee should be created to develop an Implementation Plan. A

    member of the Senior Management Team should be appointed as Project Director. A Project

    Manager should be appointed and resourced with a team appropriate to the scope of the

    project.

    The Project Director is responsible for the success of the SCM Waste Minimisation Self-

    Assessment Framework Implementation Plan. Specifically the Project Director is responsible

    for monitoring and evaluating the Plan; reporting to Senior Management and for decision

    making regarding scope and scope changes during Implementation. The Project Director is

    responsible for approving the scope of the Implementation Plan. The Project Manager is

    responsible for defining the scope of the Plan. The Project Manager is responsible for

    carrying out the Implementation Plan.

    B1.3 Timeframes

    The Implementation Plan should be aligned to the timing of the organisations strategic

    planning processes. A review schedule should be developed that includes goal setting at the

    beginning of the year, mid-year review and annual year reporting.

    The goal setting should include identification of the Principle(s) that the Project Manager and

    the team shall execute during the year. It should also include an Action Plan specific to the

    Principle that is being addressed and steps to move the Profile from one level to the next

    and address the gaps in performance.

    The Project Steering Committee should meet at least 3 times per year. The Project Manager

    and team may meet with the Project Director in subsequent meetings to achieve outcomes.

    The main tasks of the Implementation Team will involve communication and engagement of

    the Framework to staff; meeting and working with key departments and staff related to the

    specific goals for the year; setting strategies and specific actions that will result in

    improvements of the profile and then collecting and analysing data to establish the new

    profile at the end of the year.

  • Supply chain management waste minimisation toolkit 2013

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    Implementation Timeframe

    J F M A M J J A S O N D

    Review Principles

    Design Action Plans

    Communicate Action Plans

    Engage staff

    Implement actions

    Mid year Review

    Revise actions and/or continue

    Collect data

    Develop new Profiles

    Report

    End year Review

    B1.4 Personnel

    The personnel required to develop a Framework, develop an Implementation Plan and then

    carry out the Plan are recommended below. This assumes that only one Framework is

    developed for an organisation. The development of one Framework would take

    approximately 6 months with the following personnel.

    Phase: Framework Development and Validation

    Role Brief Project Description Time Commitments

    Project Director Senior manager Knowledge of supply chain management

    2 days

    Project Champions Champions are typically department managers Time commitment approx..

    2 days

    Project Manager Knowledge of supply chain management Knowledge of waste minimisation Leadership skills in action research projects and action research methodologies (ARM) High level analytical skills Good stakeholder management capabilities

    12 days

    Senior Investigator Knowledge and skills in ARMHigh level analytical skills Waste management knowledge Good report writing skills

    8 days

    Research Officer Qualitative data collection and analysis skills Quantitative data collection and analysis skills Good organisational skills

    48 days

  • Supply chain management waste minimisation toolkit 2013

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    Implementation is for 12 months.

    Phase: Framework Implementation

    Role Brief Project Description Time Commitment

    Project Director Senior executive Knowledge of either waste management or SCM

    3 days

    Project Steering Committee

    2-5 staff (depending upon size and scope) Provide feedback and input

    3 days

    Project Manager Knowledge of supply chain management Knowledge of waste minimisation Leadership skills in action research project methodology High level analytical skills Good stakeholder management capabilities

    8days

    Senior Investigator Knowledge and skills in ARM High level analytical skills Waste management knowledge Good report writing skills

    4 days

    Research Officer Qualitative data collection and analysis skills Quantitative data collection and analysis skills

    16 days

    B1.5 Monitoring and Review

    The Assessment Framework is the tool to be used by the organisation to monitor progress

    on how well SCM Waste Minimisation Principles are being understood and implemented.

    The Framework(s) can be completed individually or within a group or unit. If completed

    within a group then the tool can be a useful to trigger discussion. Such discussions will

    enhance sharing of knowledge and improve awareness and understanding of how an

    organisation approaches supply chain management in relation to waste minimisation.

    Individual self-assessment can highlight areas to improve skills and knowledge. An individual

    assessment might be a pre-cursor to a workgroup discussion that could also include staff

    from other units so that agreement on key activities or problems can be reached. Shared

    understanding is important to the implementation of waste minimisation through supply chain

    management.

    Each row in the matrix on the right of the page represents an important activity in adopting

    SCM practices towards supplier / contractor management or internal workflow management

    within the categories of

    1. Know the Rules,

    2. Apply the Rules and

    3. Change the Rules.

    Know the Rules: What are the policies and procedures within the organisation?

    Apply the Rules: How are policies and procedures understood and implemented?

  • Supply chain management waste minimisation toolkit 2013

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    Change the Rules: When the policies and procedures are not working are there mechanisms

    in place to evaluate their effectiveness and then change as required?

    Within each of these categories there are a number of Principles in the Self-Assessment

    Framework. The Framework has instructions and is a self-contained A3 sheet. A rigorous

    Action Research Methodology is used in developing a Framework. In brief, the Principles are

    drafted by the Project Team and validated with the Project Director and the Project

    Champions. They are based upon analysis of numerous individual and/or focus group

    interviews with staff and an audit of current enablers and drivers to more effective supply

    chain management for waste minimisation policy, procedures and practices. They are then

    tested again and validated with selected staff within each Project Champions department.

    Validation takes place through numerous individual interviews and/or focus group interviews

    which take approximately one hour each. The most important underlying strategy with the

    Action Research Methodology is that many staff are committed to the Implementation Plan

    because of their involvement in the development of the Framework. New Frameworks may

    be developed each year after the end of year Review.

    The staff is required to work through each row and tick the box which best describes the

    status of his/her organisation or his/her individual knowledge. There are four levels that can

    be chosen:

    1. Level 1 No awareness

    2. Level 2 Some Implementation

    3. Level 3 Several examples

    4. Level 4 The ways things are done

    When each cell is complete the staff will then be able to see what has been achieved and

    what needs attention. Staff are then ready to engage with action plan(s) to make

    improvements. Some activities are not within staffs immediate control, but they may be able

    to influence others.

    B.1.2 Embedding the Self-assessment Framework in organisations

    The Framework and Guideline should be part of several initiatives/processes internally and

    externally, including:

    1. Internally:

    National Building Council

    National Housing Executive

    Lean Implementation/Supply Chain Management Forum

    Business Process Manuals

    2. Externally:

    Supplier & Trade Council

    Product Development Alliance

    Industry Associations and Alliances

  • Supply chain management waste minimisation toolkit 2013

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    B.2 Self-Assessment Framework

    The following are exemplars of Self-Assessment Frameworks that have been generated,

    including:

    1. Table 3 External Supplier Management Self-Assessment Framework for a large

    national house builder (Organisation B)

    2. Table 4 Internal Workflow Management Self-Assessment Framework for a large

    national house builder (Organisation B)

    3. Table 5 Management Self-Assessment Framework for a large national developer

    (Organisation A)

  • Supply chain management waste minimisation toolkit 2013

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    Table 3 External Supplier Management Self-Assessment Framework for Organisation B

  • Supply chain management waste minimisation toolkit 2013

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    Table 4 Internal Workflow Management Self-Assessment Framework for Organisation B

  • Supply chain management waste minimisation toolkit 2013

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    Table 5 Supplier Management Self-Assessment Framework for Organisation A

  • Supply chain management waste minimisation toolkit 2013

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    B.3 Profiles

    After the Frameworks were developed, data was collected from staff in both organisations to

    enable the creation of initial Benchmarking Profiles. The statements were coded as shown in

    Table 6 and Table 7. Each of the four Levels are colour-coded; for example Level 1 No

    awareness is coded Red and indicates that immediate action should be taken to move from

    Level 1 to Level 2. The benchmarking data of the Supply Chain Management Waste

    Minimization Principles for Organisation A is provided in Figure 2. This data was developed

    based upon 18 staff completing the Framework. The presentation of the data in this figure is

    only for the demonstration purpose. For example, for statement coded as A, 4 staff

    indicated to be at level 1 (red), 9 staff indicated to be at level 2 (orange), 5 at level 3 (yellow)

    and no response for level 4 (green). The benchmarking data of the External Supplier

    Management Framework for Organisation B is provided in Figure 4. This data was

    developed based upon 21 staff completing the Framework. The presentation of the data in

    this figure is only for the demonstration purpose. For example, for statement coded as A, 3

    staff indicated to be at level 1 (red), 16 staff indicated to be at level 2 (orange), 2 at level 3

    (yellow) and no response for level 4 (green).

    From these data, an average level could be determined for each statement in the self-

    assessment frameworks and a resulting profile for each organisation was developed as

    shown in Figure 3 and Figure 5. These profiles give a snap shot of the average maturity

    levels across the organisations for each statement in the self-assessment frameworks.

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    Table 6 Coding of the Supply Chain Management Waste Minimization Principles for Organisation A

    Code Principle

    Know

    the rules

    Waste

    Minimisation

    Plan

    A An environmental policy, including waste management and minimisation objectives and strategy that align to divisional business financial objectives and KPIs aligned to ISO 14001.

    B An information management systems to capture and communicate waste minimization related data to maintain compliance and facilitate change

    Strategic

    Procurement

    Plan

    C A design development process that incorporates waste minimisation as a key design criteria.

    D A supplier and contractor procurement approach that drives innovation and value creation to reduce waste through the tendering process.

    Apply

    the rules

    Waste

    Minimisation

    E An environmental policy accepted into the hearts and minds of all staff. on all projects and waste minimisation objectives and strategy are an inherent part of how things are done.

    F All staff members are appropriately trained in the BPM process, which incorporates waste minimisation objectives and strategy.

    G All staff feel empowered and have a voice regarding waste minimisation objectives. Staff feel that waste minimization suggestions will be validated and implemented where appropriate.

    Strategic

    procurement

    H A proactive approach to strategic waste minimisation initiatives with contractors during and after the tender process.

    Project

    Coordination

    I Innovative waste minimisation strategies regularly developed through knowledge sharing with contractors, project teams and other business units..

    Change

    the rues

    Coordination and

    Ongoing

    Development

    J An information management system that measure physical waste generated onsite and assists in the development of a strategy to enhance waste reduction outcomes.

    K An information management system to make visible the volume and cost of waste material generated onsite to enable quality assurance reporting and internal benchmarking

    L Construction site feedback in relation to waste minimization initiatives is captured and included in the Strategic Procurement Plan.

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    Level 4 The way things are done Progressing well Green

    Level 3 Several examples Progressing Yellow

    Level 2 Some implementation Needs attention Orange

    Level 1 No awareness Needs immediate attention Red

    Figure 2: Response distribution across various statements in the Self-Assessment Framework for Organisation A

    Know the rules Apply the rules Change the rules

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    Figure 3: Profile showing average level of maturity for Principles in the Self-Assessment Framework for Organisation A

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    Table 7 Coding of Principles of the External Supplier Management Framework for Organisation B

    Code Principle

    Know the rules

    Waste Minimisation

    Plan

    A Sustainability policy including a waste management and minimisation objectives and strategy aligned to corporate business profitability objectives and KPIs

    Strategic Procurement

    Plan

    B Strategic partnerships with suppliers and trades critical to waste management efforts (eg. risk vs spend: timber, plasterboard, bricks and site spoil) to develop innovations that result in efficiencies, price reduction and/or value creation

    C Supplier and Trade Council strategy aligned with corporate objectives

    D Procurement process to select suppliers and trade subcontractors account for location and job differences.Contract Award criteria aligns to waste minimization amongst other key business objectives such as commercial, innovation, service, quality, and safety

    Apply the rules

    Waste Minimisation

    E Sustainability policy accepted into the hearts and minds of all staff on all jobs and waste minimisation objectives are part of how things are done

    F Trades and suppliers are intrinsically linked into the waste minimization objectives of the organization and undertake action s to support these objectives

    G Staff members appropriately trained based upon individual roles and responsibilities (for example in product knowledge, elite ordering skills)

    Strategic procurement

    H Consistent proactive approach to initiating strategic partnerships with waste minimisation business critical suppliers

    I Seamless application of procurement process aligned with staff competencies and job contract award criteria consistently applied to achieve waste minimisation objectives

    Project Coordination

    J Employees feel empowered to do something to minimize waste

    K Staff members comprehensively trained to work with suppliers to undertake project supplier performance monitoring during project delivery

    L Post project supplier assessment monitoring & feedback on waste minimisation performance across projects

    M Innovative waste minimisation strategies regularly developed through integration with suppliers to share knowledge of construction products and processes

    Change the rues

    Coordination and Development

    N Business systems that measure and analyse and make visible physical waste generated onsite and a strategy to enhance waste reduction outcomes

    O Strategy to make waste minimisation efforts part of renewal agreements

    P Employees feel empowered to make a suggestion re waste minimisation opportunities

    Q Formally integrate construction site supplier feedback into upstream processes and regular annual value creation forum to support creation, development and implementation of waste minimisation strategies.

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    Level 4 The way things are done Progressing well Green

    Level 3 Several examples Progressing Yellow

    Level 2 Some implementation Needs attention Orange

    Level 1 No awareness Needs immediate attention Red

    Figure 4: Response distribution across various statements in the Self-Assessment Framework for organisation B

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    Figure 5: Profile showing average level of maturity for Principles in the Self-Assessment Framework for Organisation B

    Know the rules Apply the rules Change the rules

    WMP Strategic

    Procurement Plan

    Waste Minimisation Strategic

    procurement

    Project Coordination Coordination and

    Development

    A B C D E F G H I J K L M N O P Q

    Level 4

    Level 3

    Level 2

    Level 1

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    B.4 Action Plans

    The self-assessment framework maps the adoption of supply chain practices on four levels.

    Level 1 No awareness Red

    Level 2 Some implementation Orange

    Level 3 Several examples Yellow

    Level 4 The way things are done Green

    The organisation shall devise action plans in order to progress from one maturity level to the next for each principle in the self-assessment frame work. The organisation shall endeavour to gradually transition from one level to the other. The following are provided as examples:

    Know the Rules:

    Principle: Sustainability policy including a waste management and minimisation objectives

    and strategy aligned to corporate business profitability objectives and KPIs

    Action Plan

    Level 1

    to

    Level 2

    1. Gain senior level management support for drafting of the sustainability policy.

    2. Develop a consultation process which includes transparent sessions where information is collected, synthesised and then translated into a Policy.

    3. Communicate sustainability policy to all and the response to the ideas in the consultation process and policy is finalised and approved by senior management.

    Level 2

    to

    Level 3

    1. Locate sustainability policy on organisation intranet.

    2. Encourage staff to frequently read the policy and implement where possible.

    3. Ensure alignment of sustainability policy with Business objectives and KPIs

    Level 3

    to

    Level 4

    1. Ensure that staff work plans have an acknowledgement that staff member is aware of the policy and thoroughly understands it.

    2. Link every outgoing communication to the sustainability policy

    3. Organisation achieves national and international accreditation in relation to waste management and minimisation

    4. Organisation reviews the policy annually to make sure it is aligned to business objectives and KPIs

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    Apply the Rules:

    Principle: Cross functional teams meet regularly to evaluate waste minimisation objectives

    for new product lines and feedback by supplier/trade product/process

    Action Plan

    Level 1

    to

    Level 2

    1. Gain senior level management support for creating cross functional teams

    2. Identify a senior manager who takes responsibility for waste minimisation and the formation of the cross functional teams

    3. Identify champions for cross functional management team membership

    Level 2

    to

    Level 3

    1. Develop a process for regular meetings and obtaining feedback within the organisation

    2. Communicate purpose and actions of cross functional teams within the organisation

    3. Ensure staff work plans acknowledge role and performance in cross functional teams

    Level 3

    to

    Level 4

    1. Introduce a rewards and incentives scheme is introduced to support cross functional teams

    2. Communicate widely across the organisation the cross functional teams strategies and actions plans for waste minimisation

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    Change the Rules:

    Principle: Business systems that measure and analyse and make visible physical waste

    generated onsite and a strategy to enhance waste reduction outcomes

    Action Plan

    Level 1

    to

    Level 2

    1. Gain senior level management support for introducing business systems to measure and analyse waste

    2. Educate staff and enhance their understanding of requirements for measuring physical waste generated onsite

    3. Introduce the construction site supplier feedback into upstream processes

    4. Gain consensus on the method for waste material measurement and analysis

    5. Develop strategies to make waste minimisation efforts part of renewal agreements

    Level 2

    to

    Level 3

    1. Introduce business systems to measure and analyse waste generated onsite

    2. Introduce the processes to measure and analyse physical waste generated onsite

    3. Integrate the construction site supplier feedback into upstream processes

    4. Empower employees to make a suggestion regarding waste minimisation opportunities

    5. Monitor the implementation of the strategy and monitoring practices to reduce waste based on agreed targets

    Level 3

    to

    Level 4

    1. Introduce a rewards and incentives scheme to staff to identify and introduce changes to the methods and processes for waste minimisation

    2. Review the business systems capability to measure and analyse waste generated onsite

    3. Review the KPIs annually for waste minimisation with cross functional teams and set new targets

    4. Empower employees to implement suggestions regarding waste minimisation opportunities

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    Part C Evolution of Toolkit

    C.1 Procedure

    The Toolkit and the Framework Principles are designed to address the current needs

    of the organisations involved in the action research project. The outcome from the

    development of the Framework provides the current health of the organisations

    involved in the project. Section B indicated the roadmap to achieve performance

    improvements for waste minimisation including the following key generic ten phases;

    1. Engage senior management with the process and develop a governance

    structure and resourcing plan to support the project

    2. Communicate to all staff the purpose of the project

    3. Conduct a rigorous audit of organisational barriers and enablers to a supply

    chain management waste minimisation approach

    4. Develop a customised Framework(s) with Principles that responds to

    organisational barriers and enablers through extensive research using an

    action research methodology

    5. Validate the Framework(s) and the Principles with a comprehensive

    communication and engagement plan

    6. Develop organisational Framework(s) Profiles by collecting data

    7. Identify the gaps in performance Levels and prioritise strategic actions

    8. Develop Action Plans to change behaviours and adoption of Principles

    9. Monitor adoption and collect data annually to compare Profiles

    10. Evaluate strategies, actions and Principles for effectiveness and learn from

    evaluation to enhance program

    10 Generic Steps for Framework Development, Validation and Implementation

    Other organisations aspiring to develop a self-assessment tool should follow the

    process that is explained in this toolkit. The self-assessment Frameworks presented

    in Section B are specific to the organisations involved in the study. However, the

    process to develop the Frameworks is quite generic and the followed specific Actions

    are recommended. To implement the development of Self-Assessment Supply Chain

    Management Waste Minimisation Framework additional guidance and support may

    be required if in-house expertise is not available. Some actions require specialist

    knowledge, skills and capabilities that will not typically be available in-house and

    need to out-sourced.

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    C.2 Action Plan

    Phase 1: Project Initiation and Governance Structure

    1. Ensure senior management support and engagement. Develop clear understanding

    of the value that this initiative will bring to the organisation in the senior management

    team.

    2. Develop a project management governance structure. A senior manager in the

    organisation shall be appointed as the Project Director of the Waste Minimisation

    Project Steering Committee (PSC). Key staff from various departments should be

    represented on the PSC.

    3. A Project Manager to be appointed and a team identified to support the Project

    Manager. This team may be in-house or external to the organisation as the skills and

    capabilities to develop the Framework are more than likely not readily available.

    4. Project Manager shall take responsibility for development of the self-assessment

    framework(s). The Project Manager with support from the team shall be responsible

    for developing an Implementation Plan for the Framework for the rollout, monitoring

    and evaluation.

    5. The team members shall have experience and understanding of Action Research

    Projects (ARP). The approach requires undertaking an action which can also be

    referred to as intervention and then measurement of the impact of that action or

    intervention to suggest another course of action based on the results. The Project

    Manager would have experience in Action Research Projects (ARP). The Project

    Manager shall have a high level of understanding of supply chain management

    principles and practice.

    6. The Project Director with the Project Manager shall organise a schedule of timelines

    and an outline of the scope of the project and with the Project Steering Committee

    monitor the progress at regular intervals.

    7. The development of the Organisational Framework should take approximately 3-6

    months however this may vary according to the scope of the project and size of the

    organisation. If one of the Frameworks included in this Toolkit is used and adapted

    then it will take less than that.

    Phase 2 Framework Development

    1. The team shall refer to the self-assessment Framework(s) presented in Section B

    and develop their initial understanding of these Frameworks.

    2. Develop a set of interview questions on policy, process and practice to understand

    and document the issues/barriers that the organisation is facing regarding the waste

    minimisation and the role of supply chain management.

    3. The team shall interview minimum of 25 staff across various functional units in the

    organisation. Each interview may last from 45 minutes to 1 hour.

    4. The interview transcripts shall be analysed carefully to document issues/barriers and

    enablers related to supply chain management and waste minimisation.

    5. Combine all interview transcripts together and summarise various barriers and

    enablers in various categories and themes. The themes form the basis for the

    development of self-assessment Framework(s) including the Principles that are

    crafted specifically suite to the organisation. These statements can have their

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    maturity measured across four levels. Level 1 being the least mature and level 4

    being the most mature.

    6. Divide the self-assessment Framework into the following three sections:

    Know the Rules (policy and procedure)

    Apply the Rules (practice)

    Change the Rules (evaluation)

    7. Know the Rules shall focus on Principles that raise awareness levels and

    understanding of the waste minimisation policy and procedures in the organisation

    and the role of supply chain management in improving waste minimisation targets.

    8. Apply the Rules shall contain Principles about various activities/initiatives that are

    desired in operations

    9. Change the Rules shall focus on how Principles can be monitored and evaluated and

    mechanisms within the organisation whereby new initiatives and efforts can be

    created and implemented within the organisation to improve the waste minimisation

    agenda of the organisation.

    10. Develop various self-assessment Framework(s) for internal (cross functional units)

    and external supply chains. Internal and external supply chains may be well

    integrated and therefore only one self-assessment framework shall suffice.

    Phase 3 Validation of Framework

    1. The Framework requires validation before its organisational wide implementation.

    The team shall test the Framework with at least 25 to 30 staff at several levels in

    different functional units. The staff shall complete the assessment Framework and

    shall provide comments about the simplicity, usability and suitability of the

    framework.

    2. The interview data can then be used to refine and validate the Framework. Make

    appropriate changes to the self-assessment framework based on the feedback

    gathered during the validation process.

    3. Propose to senior management an Implementation Plan through the most

    appropriate strategy including; annual work planning, business processes or project

    planning.

    Phase 4 Implementation of Framework

    1. Create a governance structure as recommended in Section B and modify to suit.

    2. Implement the assessment Framework in the organisation based on an agreed

    strategy with the senior management.

    3. Analyse the data and develop an average maturity level for each Principle

    4. Present the analysis to senior management and report on the average maturity level

    of each statement (Project Director responsibility).

    5. Adopt feedback from the senior management on the areas where improvements are

    required as matter of priority for next three years. (Project Director responsibility)

    6. Brief Project Steering Committee (PSC) about the agreed priority areas. (Project

    Director responsibility)

    7. Write Action Plans for each priority areas. The exemplars of such Action Plans are

    provided in Section B.

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    Phase 5 Review of Framework

    1. Review the Framework(s) annually. Collect data to ensure a transparent and rigorous

    process and then compare against previous Profile(s).

    2. Report on the benchmarking Profiles at an organisational wide level and analyse

    where improvements have been made and where improvements have not been

    made.

    3. Respond to the changing organisational internal environment as well as the external

    conditions. For example; externally there may be changes to the regulation related to

    management of waste that the organisation is required to respond to. Internally there

    may be situations where experienced staff have moved on and new staff members

    have taken up new positions.

    4. Obtain full support and commitment to the review. The review should be a serious

    exercise as it is anticipated that the results of Implementation would have an

    influence on the strategy developed for managing both the internal and external

    supply chain. The review process shall be transparent and rigorous.

    5. Create a version control and this should be managed as for all other guidelines in the

    organisation. Appropriate levels of authority should sign off on the changes and they

    should be communicated to all in the organisation.

    C.3 Lessons learnt and recommendations

    1. Ensure senior management support through open and transparent promotion of the

    project.

    2. Identify committed champions and ensure a high profile is established for the Project

    Steering Committee.

    3. Develop a waste minimization policy.

    4. Develop reliable data on waste and promulgate this information ensuring that the

    cost to the organization is well articulated. Ensure the reasons for adoption of

    Framework(s) is well communicated including benefits to the organization.

    5. Ensure staff from policy units as well as operational units are represented on the

    Steering Committee.

    6. Develop a Communication and Engagement Plan and stage organisational wide

    events to disseminate progress on the project.

    7. Develop organisational wide understanding, knowledge and skills as required for

    supply chain management principles and practices. Train staff as appropriate.

    8. Incrementally implement the initiative in the organization in order to change culture

    and behaviours and reduce resistance to chance. Treat the Implementation phase

    like a change management process.

    9. Source appropriate skilled people to conduct the exercise. The skill of the team

    developing a self-assessment is critically important. The team must have experience

    with Action Research approach and should also have proven experience of supply

    chain management in the context of waste minimization.

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    The final phase involves distributing the findings from the study. We developed and

    presented a synthesis of key learnings and outcomes, and disseminated to a broader

    industry audience via public forums to be organised with RMIT University, MBAV, HIA and

    others as appropriate. We presented outcomes in wider media such as conference and

    journal papers.

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    APPENDIX 1

    A SUPPLY CHAIN MANAGEMENT SELF ASSESSMENT

    FRAMEWORK FOR WASTE MINIMISATION FOR THE

    RESIDENTIAL SECTOR

    LITERATURE REVIEW

    March 2013

    The research described in this report was carried out by

    Chief Investigator: Professor Kerry London

    Investigators: Dr Malik Khalfan and Associate Professor Tayyab Maqsood

    Researchers: Jessica Siva and Peng Zhang

    Industry Research fellow: Rob Anderson

    Research Program: Cash funding by EPA Victoria through the Beyond Waste Fund

    In kind contributions by Metricon, Australand, RMIT, FMG

    Engineering, MBA V, Boral

    Date: March 2013

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    Table of Contents Table of Contents ................................................................................................................ 34

    1.0 Introduction ................................................................................................................... 35

    2.0 Waste in Construction ................................................................................................... 36

    2.1 Data and benchmarking ............................................................................................. 36

    2.2 Sources and causes .................................................................................................. 42

    2.4 Construction waste minimisation ............................................................................... 45

    2.5 Summary ................................................................................................................... 48

    3.0 Supply Chain Management an overview .................................................................... 48

    3.1 Definitions .................................................................................................................. 49

    3.2 Benefits and barriers ................................................................................................. 50

    3.3 Lean Manufacturing ................................................................................................... 52

    3.4 Supply Chain Management and the construction sector ............................................ 53

    3.5 SCM in Australia ........................................................................................................ 54

    3.6 SCM Internationally ................................................................................................... 56

    3.7 Current viewpoints and discussion............................................................................. 57

    3.8 Summary ................................................................................................................... 58

    4.0 SCM and waste minimisation in the residential sector ................................................... 60

    4.1 Integrated SCM ......................................................................................................... 61

    4.2 SCM & waste minimisation in the residential sector ................................................... 62

    5.0 Conclusion .................................................................................................................... 64

    6.0 References.................................................................................................................... 65

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    1.0 Introduction This literature review is a milestone report for the research project entitled A Supply Chain

    Management Self Assessment Framework for Waste Minimisation for the Residential

    Sector. The project is funded by the Environmental Protection Agency Waste Fund and is

    managed by Sustainability Victoria. RMIT University is the lead organisation for this project

    on behalf of the Australian Housing Supply Chain Alliance. Members of this Alliance who are

    partners for the project include Metricon, Australand, FMG Engineering, Boral, Master

    Builders Association Victoria and RMIT University. The project is being undertaken from

    December 2012 to February 2014. This review is an important task which will underpin the

    development of the project.

    The overall aim of the project is to develop and test a new framework that can be used by

    volume residential construction organisations to develop benchmarking profiles in relation to:

    (a) Practitioner/staff awareness/knowledge and capabilities of best practice in integrated

    SCM across design, procurement, tendering and construction functions to achieve

    organisational objectives for waste avoidance and reduction;

    (b) Practitioner/staff capabilities to respond to changes in supply chain environments at a

    project level; and

    (c) Organisational capacity at a portfolio level to support policy, systems and procedural

    changes to adapt to future waste avoidance and reduction strategies.

    The outcome of which is to assist the building industry in Australia to reduce and avoid

    construction material waste. In Australia, as with many other developed countries, waste

    from materials and the building process is a significant environmental and economic issue

    (BRE, 2006; Ling and Lim, 2002; DSEWPC, 2011). Over the past two decades, supply chain

    management (SCM) has had increasing attention within the construction management

    literature. However, there is has been little real evidence of its adoption at a systemic level in

    the industry in any of the construction sectors including; residential, commercial and civil.

    The purpose of this document is to provide a targeted literature review of recent

    developments in international best practice for construction waste minimisation in supply

    chain management for the housing construction sector. The review is organized in the

    following sections:

    1. Waste in construction

    2. Supply chain management

    3. Supply chain management and waste minimisation in the residential construction

    sector

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    2.0 Waste in Construction Waste in construction has been identified as a significant problem in Australia. Construction

    waste or construction and demolition (C&D) waste includes a mixture of inert and non-inert

    materials arising from construction, renovation, demolition activities including excavation,

    civil and building construction, roadwork, site clearance, demolition and building renovation

    (Shen et al, 2004; Tam and Tam, 2008; Poon, 2007; Yuan et al, 2011).

    2.1 Data and benchmarking

    The strategic approach to management of the problem of construction and demolition

    materials waste is often underpinned by an analysis of data including such measures as;

    volume of waste generated; volume of waste transported to landfill; volume of waste

    recycled; carbon dioxide equivalent and embodied energy; cost of transportation to landfill

    and landfill levy cost. This type of data can then provide baseline data, targets and action

    plans. The information can be provided at an industry level on a regional basis which is often

    aggregated or can be developed at site and project level. Aggregated data is more useful to

    consider when reporting or evaluating industry policy and sectoral level interventions and the

    project level analysis is more useful for companies to use when they are attempting to

    implement organizational benchmarking and developing and evaluating the impact of their

    action plans. It has been noted by many that this type of data is not readily available (BRE,

    2006). It has been suggested that construction and demolition waste can account for

    approximately 30% of all solid waste streams (Brooks et al, 1994; Mincks, 1994; Bossink

    and Brouers, 1996) and hence this has prompted national and/or regional policy

    development and implementation strategies in various countries in the past decade such as

    UK, Australia, Singapore, Hong Kong, United States of America and the Netherlands.

    Waste being transported to landfill in Australia increased from 2004 till 2007. In Australia,

    construction waste has been estimated to account for 16-40% of total waste (Bell, 1998)with

    nearly one ton of solid waste sent to landfill per person annually (Reddrop and Ryan, 1997).

    In 2004-05 C&D waste generation in Australia totalled 15.1 million tonnes of which 7.5

    million tonnes was residual waste to landfill (WCS Market Intelligence, 2008). In 2006-2007

    the C&D waste stream accounted for 38% of total waste, amounting to approximately 16.6

    million tonnes (DSEWPC, 2011). In 2008-2009 C&D waste generation in Australia increased

    to a total of 19.0 million tones of which 8.5 million tones was disposed to landfill while 10.5

    million tones or 55% was recovered and recycled (Hyder, 2011). In Victoria in 2008-2009 a

    total of 3.15 million tones of C&D material was recovered for reprocessing, however, 47% of

    waste to landfill was generated from the C&D sector (Sustainability Victoria, 2010).

    The problem of construction waste is an international problem. Construction waste is not

    limited to Australia (Mills et al, 1999; Yuan et al, 2011). In 2006, in the UK, the volume of

    construction, demolition and refurbishment waste accounted for approximately 100 million

    tonnes annually. In the UK almost a third of all total waste each year is attributed to the

    construction industry, approximately 50% of which is recycled (BRE, 2006) and the wastage

    rate in the UK construction industry was as high as 10-15% (McGrath and Anderson, 2000).

    Furthermore, it is suspected that this is an issue which is identified to worsen as the push to

    improve energy efficiency through refurbishment and demolition of properties intensifies over

    the coming decades. The reduction of construction waste has become a priority in the UK

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    with a 20 year strategy to reduce construction waste developed in 2006 (BRE, 2006). In

    addition to the environmental impacts of waste materials, there are also significant economic

    impacts as well. The cost of waste disposal is predicted to increase in future years (BRE,

    2006), further adding to the economic impacts. Consequently the effective management of

    construction waste is high on the agenda both in Australia and internationally. Table 1

    provides some data on the amount of C&D waste generated in a number of countries

    including The Netherlands, Australia, United States of America, Germany and Finland.

    Table 1. C&D Waste as percentage of all solid waste entering landfills in various countries

    (Bossink and Brouwers, 1996)

    Country C&D Waste (by weight) (%)

    The Netherlands 26

    Australia 20-30

    United States 20, 23, 24, 29

    Germany 19

    Finland 13-15

    In Singapore, the Housing and Development Board confirmed that wastage is indeed a

    problem for the construction industry and estimated that material wastage accounts for

    approximately 2% of the contract sum (Ling and Lim, 1995). In Singapore construction

    materials waste is disposed of either through incineration (90%) or landfill (10%). It is a

    significant problem for a country where land is at a premium and so a national waste

    management strategy is critical for Singapore. The US Environmental Protection Agency

    (USEPA, 2002) estimated that approximately 136 million tons of building related C&D waste

    were generated in 1996 with demolition waste accounting for 48% and renovation 44% of

    the total waste. In Hong Kong, from 1993 to 2004, the annual generation of C&D waste has

    more than doubled, reaching an amount of about 20 million tons in 2004 a single year

    (Poon, 2007).

    Of particular interest to policymakers and industry practitioners alike is research in Ireland by

    Duran et al (2006) where they explored the economic viability of construction and demolition

    waste recycling. Through conducting surveys and interviews with 29 local authorities

    responsible for waste management, 15 aggregate producers and general recycling centers,

    suppliers of crushers, waste management companies and policy makers the study

    uncovered that economic viability is likely to occur when the cost of land filling exceeds the

    cost of recycling. The study also identified that recycling centres benefit from economies of

    scale whereby an increase in the scale of a centre implies a decrease in recycling costs.

    Furthermore the study also analysed the use of taxes and subsidies as tools to encourage

    recycling. One important conclusion of the study is a suggestion that market based

    instruments are likely to be the best option for policy makers. In order to encourage

    recycling, the prices charged to users of landfills and primary aggregates should be high

    (Duran et al, 2006, p. 319). The findings of Duran et al (2006) were confirmed by work

    carried out by the Department of Sustainability, Environment, Water, Population and

    Communities Queensland Department of Environment and Resource Management which

    identified that high landfill disposal costs provide an incentive to process mixed C&D waste

    in order to recover certain high value and high volume components and avoid landfill

    disposal costs (Hyder, 2011, p. 11).

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    A pilot project Developing a Strategic Approach to Construction Waste was established by

    the UKs Building Research Establishment (BRE) to identify activities and drivers to dictate

    the future direction of the construction industry in relation to resource efficiency. The work

    carried out by the BRE has produced some important data and environmental benchmarks

    in relation to construction waste in the housing sector and some of these are reproduced

    below.

    Some initial data on the amounts of waste produced from different types of construction

    have been identified and a number of environmental performance indicators are outlined in

    Table 2 below. The indicators are given as m3 waste per 100m2 floor area to enable like for

    like comparison; and m3/100,000

    Table 2 Environmental performance indicators (BRE, 2006)

    D: Demolition

    E: Excavation

    G: Groundworks

    M: Mainframe

    S: Services

    P: Partitions

    F: Fit-out

    Civ

    il

    En

    gin

    ee

    rin

    g

    Leis

    ure

    He

    alt

    h

    Ca

    re/

    Ho

    sp

    ita

    ls

    Re

    sid

    en

    tia

    l

    Off

    ice

    Ed

    uc

    ati

    on

    /

    Sc

    ho

    ols

    Benchmarks E, G, M G, M, S, P, F

    G, M, S, P, F

    G, M, S, P, F

    G, M, S, P, F

    G, M, S, P, F

    Key performance indicator (KPI) =

    m3/100,000

    project value

    52.3 6.1 7.9 17.3 8.4 13.2

    Environmental performance

    indicator (EPI) = m3/100m2

    61.7 3.7 11.7 19.2 14.1 22.2

    Benchmarking data on the amount of waste per house has been developed through BREs

    analysis of 23 housing projects. Table 3 presents this data in relation to the average amount

    of waste produced across the sites which is 19.2m3 waste per 100m2 floor area. Using this

    figure and applying it to a typical semi of 80m2, BRE (2006) estimated an average material

    waste generation of 15.36m3 of waste per house. Furthermore when adding in an average

    of 50% void space in the skips that would collect this waste this equates to around 30m3 of

    skipped waste. A typical skip has a volume of 6.125m3, so around 5 skips will be needed to

    contain the waste from 1 house. Based upon the Envirronmental Agency conversion factors,

    the weight of waste from our generic house is 9.6 tonnes (BRE, 2006, p. 9).

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    Table 3 Benchmarking data in relation to amount of waste per house (BRE, 2006)

    Project type Housing EPI (m3 waste/100m2)

    Average

    Waste Group Residential x 23 no Conversion factor Tonnes

    Timber 1.3 0.3 0.39

    Concrete 2.5 1.11 2.775

    Inert 1.1 1.3 1.43

    Ceramic 2.8 0.78 2.18

    Insulation 1.0 0.16 0.16

    Plastic 0.6 0.22 0.132

    Packaging 2.9 0.55 1.59

    Metal 1.3 0.8 1.04

    Plaster & cement 3.2 0.4 1.28

    Miscellaneous 2.5 0.4 1.0

    Total EPI 19.2 11.997

    Past work in the UK has shown that a typical construction skips costs 1343 when the cost

    of the skip is added to the cost of labour and materials that fill it. The BRE (2006, p. 10)

    outline the breakdown of this as:

    1. skip hire 85 (quite low compared to current prices) 6.4% of cost

    2. labour to fill it 163 - 12.1% of cost

    3. cost of materials in skip 1095 81.5% of cost

    Therefore the financial cost of waste for our generic house is for 5 skips, around 6715, and

    rising.

    In Australia it has been estimated that the cost of disposal of waste generated during the

    construction of a residential house is between $2000 to $3000 per house. There has also a

    been suggestion made on the volume of waste generated in the construction of a volume

    builder house on a flat block to be 18 to 23 m3 of waste per house in Victoria (Hyder, 2011,

    p. 47).

    In Australia the management of environmental issues including the management of C&D

    waste is the responsibility of Australian states and territory governments. The Australian

    Government does not directly legislate management of C&D waste (DSEWPC, 2012).

    Research undertaken by the Department of Sustainability Environment, Water, Population

    and Communities (DSEWPC)(2012) identified the cost of landfill as a significant driver for re-

    use and recycling of C&D Waste. According to the DSEWPC, in 2009, landfill costs in

    Australia ranged from $42 per tonne to $102 per tonne. In addition to the cost of land-filling

    by operators, there can be an additional charge levied by the state and territory jurisdictions.

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    In New South Wales for example, the governments Section 88 Landfill Levy applies to

    regulated areas and ranged between $20.40 per tonne and $70 per tonne. The lower limit is

    set to rise by $10 (plus adjustment for the consumer price index) per year until 2015-18. It is

    expected that this will drive additional re-use and recycling from the construction industry

    (2012, p. 10).

    Victoria has had a long history of landfill levy application (Hyder, 2011). Table 4 provides

    information in relation to the waste levies charged for municipal solid waste (MSW) and

    industrial waste. The levy for industrial waste is applied to C&D waste disposed to landfill

    that does not contain prescribed industrial waste.

    Table 4 Waste levies for Victoria (Sustainability Victoria, 2011)

    Geographic area Waste levy (per tonne) Forecast waste levy increase

    2010-2011 2011-2012

    Metro/ provincial MSW: $30

    Industrial: $30

    MSW: $40

    Industrial: $40

    Increasing to $53.20 for both MSW and Industrial by 2014-15

    Rural MSW: $15

    Industrial: $25

    MSW: $20

    Industrial: $35

    Increasing to $26.60 for both MSW and $46.60 for Industrial by 2014-15

    Work undertaken by Hyder Consulting for Sustainability Victoria has uncovered the

    relationships between amount of waste sent to landfill and an increase in landfill price.

    Figure 1 presents an estimation of responses to the price of landfill for the three key waste

    streams of MSW, C&I and C&D. According to Figure 1, there is a suggestion that C&D waste

    generation is likely to most rapidly respond to a pricing signal thereby resulting in increased

    waste being diverted from landfill (Hyder, 2011).

    Figure 1 Assumed diversion responses of waste streams to increases in the price of landfill

    (Hyder, 2011)

    Furthermore it was identified that not only was pricing important but the geographic location

    of reprocessors was also important in terms of facilitating C&D material recovery particularly

    in metropolitan Melbourne (Hyder, 2011). A Sustainability Victoria commissioned study

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    43

    found that resource recovery from C&I and C&D waste streams in the North Eastern and

    Mildura regions of Victoria was significantly hampered by the movement of wastes to landfills

    in NSW where landfill cost were typically lower (in part due to landfill levies in the non-

    regulated area of NSW).