Waste Prevention, Waste Minimisation and Resource Management
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Supply chain management waste minimisation toolkit 2013
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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
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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.
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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
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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
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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.
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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).
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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.
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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
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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.
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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
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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.
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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 organisation’s 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.
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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
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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?
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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
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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)
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Table 3 External Supplier Management Self-Assessment Framework for Organisation B
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Table 4 Internal Workflow Management Self-Assessment Framework for Organisation B
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Table 5 Supplier Management Self-Assessment Framework for Organisation A
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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
Supply chain management waste minimisation toolkit 2013
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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
Supply chain management waste minimisation toolkit 2013
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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
Supply chain management waste minimisation toolkit 2013
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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 UK’s 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 BRE’s
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).
Supply chain management waste minimisation toolkit 2013
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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 government’s 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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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). The study indicated this made landfill disposal a cheaper alternative
for many materials, compared to separation and recovery. The study indicated that in some
instances the cost differential between townships in Victoria could be double those in NSW”
(Hyder, 2011, p. 96).
Apart from the attempt to develop baseline data for benchmarking purposes, the other most
significant contribution underpinning the UK BRE report was that an holistic approach to the
life cycle of products and materials was needed. Waste is being produced through
manufacture, distribution, design, construction, refurbishment and demolition.
“Long term targets for waste reduction, reuse and recycling are the best way to define what
can be achieved and focus our combined efforts within the framework of a combined target.
This is not easy to do for a wastestream that is fragmented in the following ways:
1. Waste is being produced and sent to landfill by the actions of the whole supply chain
– manufacture, distribution, design, construction, maintenance, refurbishment,
demolition, (resource management).
2. Waste from manufacture, construction, refurbishment and demolition are lumped
together for reporting purposes but are different in terms of amounts, composition,
causes, levels of integration and separation.
However, different targets for each part of the supply chain or activity would be less
meaningful unless set against overarching, global targets i.e. each will have a role to play in
reaching the target but the actions and relative contribution may differ in accordance with
their ability to deliver. An example of this could be waste reduction and demolition waste,
whereby the only realistic way to prevent demolition waste would be to have a longer lasting
building – this is not something the demolition sector can achieve. It is more the design,
durability of products/materials and maintenance of the building that can achieve waste
reduction in this instance.” (BRE, 2006; p8).
Significant reductions in waste will only be possible if they are accrued throughout the supply
chain. The BRE (2006) suggests an allocation of the target of 50% waste reduction across
the relevant supply chain, ie distributed in accordance with the ability to deliver those
savings. An idea of what this might look like is given by BRE in Figure 2 below.
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Figure 2 Allocation of target – baseline vs target waste per house (BRE, 2006)
The DSEWPC developed a “Construction and Demolition Waste Guide – recycling and re-
use across the supply chain” which is underpinned by the idea that the myriad of supply
chain stakeholders play out their roles in delivering a sustainable built environment. The
guide documented a series of case studies to outline various C&D waste recycling and re-
use initiatives across Australia and demonstrate a range of opportunities at various stages of
the supply chain. Whilst the case studies clearly demonstrate the benefits and profits
associated with the initiatives there is little discussion on the actual strategies used to
integrate the supply chain as well as the specific actions of supply chain actors. The
approach taken in our research project is underpinned by the strategy that it is the actions of
the whole supply chain that will ultimately reduce waste to landfill in the Australian housing
sector but is an attempt to go further than simply documenting case studies of outcomes. It
is our contention that there has been little research in housing waste minimization that
moves beyond the rhetoric of claiming that supply chain management is the answer to waste
minimisation to towards developing and piloting strategies that could be embedded in
organisations.
2.2 Sources and causes
To be able to reduce the amount of waste generated it is important to know what the source
and causes are. The source and cause of construction and demolition waste has often been
considered to be the responsibility of the contractor however this is a simplistic view of a
complex problem. Clearly there are problems handed to the site operatives in relation to
waste that are beyond their control. It has been identified that project design, product
manufacture, estimating, procurement and materials handling as well as site construction
practices all have a role to play in reducing on-site waste. The construction process involves
many players and all have a contribution to play in waste minimization. This section explores
the site operatives as well as upstream contributors to the challenge of waste minimization.
Often the focus is on waste recycling and much effort is expended on fixing the problem at
the end of the waste chain. Although these efforts are to be acknowledged it is also
worthwhile to examine the source and then identify the cause and develop strategies to
address the root cause of the problem to minimize waste and reduce effort in a ‘band-aid’
approach at the end of the construction process.
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In a study to examine the waste minimisation strategies and behaviour of main contractors in
Singapore as a way of curbing the waste problem caused by subcontractors, Lim (2005)
identified the four main causes of waste generation on site to include;
1) wasteful practice of subcontractors,
2) lack of integration and coordination of team players,
3) inefficient usage of construction materials by subcontractors and
4) incidence of rework.
However our contention in this study is that the source of waste can occur at any stage of a
construction project and can result from a variety of causes. We have to acknowledge that
this contention is not particularly new and valuable research work by Bossink and Brouwers
(1996) began in the mid 1990s where they examined the various activities in the Dutch
supply chain to attempt to identify possible options to reduce waste generation in
construction activities ( Table 1). They identified 5 sources of waste related to 1) design 2)
procurement 3) materials handling 4) operations 5) residual and 6) other. Their analysis
provided quantitative data on volume of waste, amount of waste material as a proportion of
the total cost of that material procured and then cost of removal of that waste from site as a
percentage of the total waste costs (including purchasing costs, transport to landfill sites and
waste management costs). This quantitative data is interesting for comparisons and will be
useful to our study and we shall use as a starting point for benchmarking in our two case
studies. Further to the quantitative work on 5 housing sites was a the small piece of research
they conducted which included brainstorming sessions with 8 representatives of contracting
companies. This qualitative data provided an inventory of the causes of production of waste
created by the use of various construction materials. This built upon a desk top review they
had previously conducted and a compilation of a table of the empirical results as well as the
previous work by Gavilan and Bernhold (1994) and Craven et al (1994) was produced. We
have reproduced that table now (table 5) as it is provides a comprehensive listing of various
sources and causes of construction materials waste.
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Table 5 Sources and Causes of Construction Waste ( Source: Table 8 Extended List of
Sources and Causes of Waste based on Tables 4 and 8 Table 4: Source and Causes of
Construction Waste Gavilan and Bernold, 1994; Craven et al, 1994 as cited in Bossink and
Brouwers, 1996)
Source Cause
Design Error in contract documents
Design Contract documents incomplete at commencement of construction
Design Changes to design
Design Choices about specifications of products
Design Choice of low quality products
Design Lack of attention paid to sizes of used products
Design Designer not familiar with possibilities of different products
Design Lack of influence of contractors and lack of knowledge about construction
Procurement Ordering error, over ordering, under ordering, and so on
Procurement lack of possibilities to order smaller quantities
Procurement Use of products that do not fit
Materials handling Damaged during transportation to site/on site
Materials handling Inappropriate storage leading to damage or deteriorisation
Materials handling Throw away packaging
Operation Error by tradesperson or laborer
Operation Equipment malfunction
Operation Inclement weather
Operation Accidents
Operation Damage caused by subsequent trades
Operation Use of incorrect material requiring replacement
Operation Required quantity of products unknown due to imperfect planning
Operation Information about types and sizes of products that will be used arrives too late
Residual Cutting uneconomical shapes
Residual Offcuts from cutting materials to length
Residual Over mixing of materials for wet trades due to a lack of knowledge of requirements
Residual Waste from application process
Residual Packaging
Other Criminal waste due to damage or theft
Other Lack of on site materials control and waste management plans
Knowing and understanding the causes of waste coupled with measuring the volume and
cost of waste are important steps in construction waste minimization. The next section
explores the research literature on construction waste minimization and in particular
strategies and actions undertaken by organisations.
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2.4 Construction waste minimisation
Waste minimization is any systematic technique, process or methodology used to achieve
waste reduction primarily through avoidance or reduction at source (CIRIA, 1995; Crittenden,
1995). In the previous section on Construction waste, we identified government approaches
through policy development, however, this section shall focus on the industry practices and
organizational and project level strategies and actions that can assist in waste minimization.
Construction waste minimisation involves many waste reduction activities which can lead to
economic, social and environmental benefits (Greenwood 2003). In terms of economic
benefits, potential large savings can be made by construction organisations through
reductions in material expense and waste disposal costs. In addition, an organisation’s
involvement and experiences in waste minimisation could be a valuable marketing tool for
bidding on projects that participate in local and national green building certification programs
(Greenwood 2003). In regards to social benefits, construction waste minimisation can help to
create skilled employment, conduct knowledge-based business, and increase work safety
through cost savings and staff training related to waste management (Greenwood 2003)
Finally, environmental benefits of minimising construction waste can be achieved through
the effective use of natural resources and reduce waste to landfill (Greenwood 2003).
Past work into construction waste minimisation have identified a number of key approaches
or practices for construction organisations seeking to reduce and avoid waste including:
Waste management integrated as part of the design process: Various measures
which can be used to reduce waste during the early stages of the design process
including dimensional coordination and standardisation, minimisation of the use of
temporary works, provision of detailed designs and limitation of design modifications
(Poon, 2007)
Use of prefabricated materials and products: The use of prefabricated products
reduces waste generation on site and can also contribute to better quality and cost
savings. Conduct of a waste minimisation assessment which examines opportunities
for waste avoidance reduction, reuse and recycling (EPA, 1998)
Incorporation of waste minimisation targets and measures into organisations’
environmental management plans (EPA, 1998)
Despite the potential benefits of adopting waste minimisation practices including cost
savings, better quality products and safer sites; substantial evidence has demonstrated that
there is a gap between theory and actual implementation of the suggested practices for
waste minimisation by construction organisations. Some of the barriers to effective
implementation of waste minimisation practices include:
a lack of economic incentives to reduce and avoid waste (Yuan et al, 2011):
the culture of the construction industry which is resistant to change (Maloney and
Federle, 1993; Lingard et al, 2000)
the unique nature of each project, hostility and unpredictability of the production
environment, fragmented nature of the project organisations used to procure
buildings (Teo and Loosemore, 2001)
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a lack of awareness, interest or commitment to environmental issues (Ofori, 2000)
particularly at senior management level
a perception that waste management is not cost-effective (Bossink and Brouwers,
1996; Graham, 1996) and is actually a costly and a time consuming activity
lack of training and tools to implement waste minimization strategies
poor coordination and integration between various participants as projects progress
poor review and feedback loop mechanisms to provide information upstream to early
decision makers
The literature indicates that many of the barriers to effective waste management revolve
around underlying structural and behavioural characteristics of the construction industry.
These barriers are at sector, organization, project and individual level. Individuals are highly
resistant in their behaviour and attitude towards new work practices to minimize waste and
are therefore not embracing the potential benefits of effective waste management. However,
it is not only the individual level there are systemic and structural barriers that inhibit change
such as the fragmented silo mentality of the industry and the cultures that underpin
organisations. At times the inertia of the industry appears overwhelming to overcome to
catalyse significant change in work practices.
Perceptions can play a key role in the diffusion of new practices. However, human behaviour
and perceptions are changed by work practices. One of the greatest influences on firm work
practices is the cluster of firms that they deal with on a daily basis; that is their clients,
collaborators and suppliers. Firm practices are also constantly being shaped by their
competitors whereby firms can sometimes be lead to change work practices when
competitors are embracing change by adopting new practices. Firms and individuals leading
firms are of the perception that it can be too risky not to change when working within such a
competitive work environment that is the construction industry (London, 2008)
The attitudes of key players inevitably influence the level of waste generated on a project
(Faniran and Caban 1998). It has been argued that clients have the greatest influence over
waste minimization practices since clients set the environmental conditions and standards to
which the project team must comply (Dainty and Brooke, 2004). However, any effort to
influence waste management practices on projects would be of limited value if those further
down the supply chain do not buy-in to effective waste management practices (Teo and
Loosemore, 2001; Dainty and Brooke, 2004). Within this context, the frequently discussed
fragmented nature of the construction industry is likely to pose as a significant barrier to
embedding a culture of waste minimization throughout the supply chain.
However, contrary to the traditional view that the construction industry is fragmented,
unstructured and unpredictable, London (2008) has identified that the project-based industry
has a deeper level of complexity in that there is an underlying structure to the activities of the
supply chains, supplier firms and procurement relationships, which can be classified based
upon specific patterns of attributes. Firms may not work on every project with the same
customer and supplier connections; however, firms are typically located within a cluster of
business networks, which develop and are maintained over numerous years (London, 2008).
There is thus an indication that there are indeed longer-term relationships between the
different players within the supply chain who have a degree of influence over each in other in
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their behaviour and attitudes towards the adoption of effective waste minimisation practices.
As such, it is important to gain a deeper understanding of how this takes place within the
supply chain that is specific to the residential C&D waste sector. It is proposed that those
alliances whether formally or informally constituted will provide the greatest opportunity for
innovation to take place in waste minimization.
Various factors have been identified in the literature as those which can influence the
successful implementation of a waste management plan by construction organisations
including (Ling and Lim, 2002):
Involvement of senior site staff
Commitment of top level management
Cooperation of sub-contractors
Support of workers
Establishment of clear corporate policy, goals and objectives in waste
management
Increasing workers’ environmental awareness
Support of clients
Presence of waste management experience
Support of government
Presence of clear and effective internal communication on waste
management
Presence of waste management expertise
Availability of recycling facilities
Availability of proven successful plan
Support of design consultants
Through conducting 30 interviews and questionnaires with 30 construction professionals in
Singapore, Ling and Lim (2002) identified that the three most important factors were
involvement of senior site staff, commitment of top-level management and co-operation of
subcontractors. The study concluded that the critical factors influencing the success of a
plan are directly linked to the internal environment which the organisation has control over
and therefore commitment and support throughout the whole organisation is essential for
successful implementation (Ling and Lim, 2002). These findings support the earlier work of
Teo and Loosemore (2001) which also identified top management supportiveness as one of
the most critical factors for waste reduction behaviour.
Another study conducted in Singapore (Lim, 2005) to examine main contractors’ waste
minimisation strategies for managing subcontractors uncovered seven key main strategies
for influencing the reduction of waste on site which are training of subcontractors, quality of
documentation provided to subcontractors, cooperation among team players, main
contractor’s control over subcontractor’s workmanship, main contractor’s control over
subcontractor’s usage of materials, goal-setting with subcontractors and main contractor’s
control of suppliers’ material quality.
It has been identified that written waste management plans can be both an incentive and
guide towards encouraging best practice waste management on construction sites (Ling and
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Lim, 2002). However there is often little verification of such plans and limited monitoring of
any improvements made (Tucker et al, 2005). It is thus important to not only implement
waste minimisation practices but to also monitor and evaluate its outcomes and
effectiveness. It is also important to differentiate between waste management onsite that is
concerned with waste minimization and those activities that are dedicated to managing the
waste on site towards being recycled or transported off site to landfill.
2.5 Summary
Each process or stage of a construction project can produce construction waste. In order to
minimise construction waste, many governments around the world have sought to implement
various waste minimisation policies and best practice guidelines. A number of key
approaches or measures for reducing and avoiding waste have also been presented by
various of scholars and experts. Significantly the focus of these policies and best practice
guidelines has tended to be on the implementation phase of waste minimisation practices.
The importance of monitoring and evaluating the outcomes and effectiveness of the waste
minimisation practices is largely neglected.
Furthermore whilst past studies have revealed the significance of organizational behaviour
and attitudes in the implementation of waste minimization plans, there is still limited research
which investigates the critical role that different players including competitors, suppliers,
collaborators/partners; within the supply chain play in influencing the perceptions and
attitudes towards waste minimisation. Waste minimisation involves the promotion of
favourable attitudes and encouragement of ownership of the process at all levels of the
construction process (Tucker et al, 2005). Given that waste can arise at any stage of the
process, from inception to design to construction to operation of the facility (Dainty and
Brooke, 2004) cooperation between various supply chain players is critical in order to
achieve an integrated approach to waste minimisation on projects.
3.0 Supply Chain Management – an overview It is not the purpose of this review to detail the development of Supply Chain Management
(SCM) and its integration into the construction sector. Several seminal reviews and original
research works provide this information already. For example Hong Minh (2002), London
and Kenley (2001) and O’Brien et al(2009). This review builds upon these and provides
developments in this area since these publications. In doing so, a review of developments
across the past 5 years (since 2008) is the primary aim of this review. While the focus will be
on post-2008 developments, pre-2008 publications will be drawn upon where appropriate.
Furthermore it is not the purpose of this review to detail the issue of material waste in the
construction sector as this will be the focus of the final section which attempts to draw
together key research themes in this area.
This review is structured into several sections. Firstly a brief overview of SCM is provided;
development of SCM and the construction industry are then presented and then the
discussion is narrowed to SCM and waste reduction and avoidance in the residential
construction sector. A summary of recent developments of SCM, the construction sector and
waste minimisation concludes this review.
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3.1 Definitions
SCM has developed out of concepts such as logistics and operations management
(Vidalakis, Tookey and Sommerville, 2011) and has developed as a response to increasing
competition (CSIRO, 2001). Early criticisms of SCM were that it was not discernibly different
to logistics management (McGeorge, Palmer and London, 2002). It was initially applied
within the manufacturing sector, with the key example being that of Toyota Production
System.
There are a range of definitions for SCM especially within construction industry applied
within the literature which has been described as confusing and have been criticised for
being too vague (Bankvall et al, 2010; Khalfan and Maqsood, 2012; Petrovic-Lazarevic,
Matanda and Worthy, 2006; Pryke, 2009). The lack of consistent definitions has been seen
to be hampering the development of SCM, both in theory and in practice (London, 2008).
Tennant and Fernie (2012) explore the definitions of supply chain management and
summarize that there are two broad schools of thought; a functional school and a
philosophical school. The example advocaters of a functional school are Cox et al (2006)
and Spekman et al (1998). They believe supply chain management is a sourcing strategy.
This “involves the buyer undertaking proactive supplier development work, not only at the
first-tier of the supply chain, but also at all stages in the supply chain from the first tier
through to raw material supply” (Cox, et al., 2006 p.34).
Alternatively, commentators of a philosophical school (Cooper & Ellram, 1993) interpret
supply chain management as a ‘way of working’. This largely abstract interpretation
traverses many organisational and operational boundaries (Tennant and Fernie, 2012).
Consequently, supply chain management is not just about explicit corporate functions such
as purchasing, logistics and production, supply chain management also pervades tacit
aspects of business such as teamwork, professionalism and networking (CSCMP, 2013).
London (2008) identifies various definitions from four different approaches including
distirubtion, production, strategic procurement and industrial organisation economics and
states that SCM is about delivering superior outcomes at less cost to the supply chain as a
whole. SCM involves the systematic management and physical distribution of products from
their raw material state, through the manufacturing processes to the point of sale for the
product (London and Kenley, 2001). The supply chain is defined as the ‘network of
organisations that are involved, through upstream and downstream linkages, in the different
processes and activities that produce value in the form of products and services in the hand
of the ultimate customer’ (Christopher, 1992). These organisations are dynamic and
interdependent and can quickly be reconfigured to respond to changing requirements from
the customer (CSIRO, 2001). However London (2008) was more targeted in producing a
definition that was more useful to the construction industry rather than a retelling and
borrowing from lean manufacturing or transport logistics sectors.
“Supply chain procurement is the strategic identification, creation and management of critical
project supply chains and the key resources, within the contextual fabric of the construction
supply and demand system, to achieve value for clients.” (London, 2008) This definition then
provides a platform for an innovation and productivity improvements that large organisations
(such as volume house builders) are seeking to achieve. It provides a useful starting point
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for our study on waste minimization because without strategic identification, creation and
management of critical project supply chains and key resources seen within the context of
the supply and demand economic system we can not hope to reduce waste and bring key
supply chain actors along on the journey. It is the influence that large volume housebuilders
have on the whole supply chain that will enable some transformations to take place – both
culturally, operationally and economically.
3.2 Benefits and barriers
Many benefits can be achieved through SCM including (Cheng et al, 2010):
Reduced costs,
Improved responsiveness and ability to changes;
Reduced uncertainty for project owners in cost savings
Increased service level; and ,
Facilitate decision making.
In an integrated supply chain, information is shared both up and down stream, improving
efficiencies. A responsive supply chain is able to deal with a range of elements including
quantities demanded, short lead times, large variety of products, achieve a high service level
and account for uncertainty of consumers and suppliers (Bankvall et al, 2010).
When Benton and McHenry (2010) present the potential benefits of supplier partnerships
(see Table 6), they also state that due to the following barriers, the development of an
integrated supply chain remains an extremely difficult task. Barriers to SCM, include; failure
to share project information; fear of loss of control; lack of self awareness; lack of partner
awareness; enormity of the project complexity; inability to recognize project goals; lack of
understanding project owner; lack of understanding of supply chain; myopic thinking; myopic
strategies; and deficiency of mutuality. The lack of critical scrutiny of SCM and its integration
into the original sectors has been raised as a significant issue with SCM development
(Bankvall et al, 2010).
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Table 6 Potential Benefits of Supplier Partnerships (Benton & McHenry, 2010)
Reduced Uncertainty for Project Owners in
Cost Savings
• Material costs
• Quality
• Timing
• Reduced supplier, subcontractor base easier to manage
• Economies of scale in
• Scheduling
• Purchasing
• Logistics
• Decreased administrative costs
• Fewer switching costs
• Enhanced project integration
• Technical or physical integration
• Improved equipment utilization
Reduced Uncertainty for Subcontractors and Suppliers in
Time Management
• Market
• Understanding of project owner’s needs
• Project specifications
• Faster project completion
• Improved cycle time for subcontractor
Reduced Uncertainty for Owners and Partners in
Shared Risks and Rewards
• Convergent expectation and goals
• Reduced effects from externalities
• Reduced opportunism
• Increased communication and feedback
• Joint capability and development
• Market shifts
• Increased profitability
• Project development
• Accident reduction
Joint Work Method Development Stability
• Increased shared technology
• Greater joint involvement of project design
• Lead times
• Priorities and attention
Greater Flexibility
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3.3 Lean Manufacturing
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. Womack and Jones (1996) defined the five main elements
of “lean thinking,” which are now widely accepted. These five main elements that enable a
lean approach are:
1. Value—Identify value since it is lean manufacturing’s role to deliver value to the customer.
2. Value stream—To create customer value, managers need to identify which activities add
value and which do not.
3. Flow—Managers must focus on the flow through the value chain in the factory and
eliminate non-value-adding activities. This usually involves a “single piece” flow concept.
4. Pull—The value chain is based on a pull approach; that is, customer demand drives
manufacturing activity and material flow.
5. Perfection—Continuous improvement in pursuit of perfection.
Past research has suggested that the lean approach aids competitiveness (Nystuen, 2002;
Parker, 2003; Liker 2004). Sheridan (2000) states that conversion to lean production could
bring four fold productivity after studying in Japanese companies.
Lathin (2001) suggests that a reduction of 90% in lead time, 90% in inventories, 90% in the
cost of quality and 50% increase in labour productivity could be achieved by adopting lean
production for the traditional mass producers. Lawson (2013) states that lean production
could bring the benefit of the elimination of all categories of waste. Through a
comprehensive study of 72 manufacturing companies including the top 50 organizations in
Australia based on the number of employees, venue and profitability and whose names were
supplied by the “Business Council of Australia” and the “Australian Chamber of Commerce”,
Sohal and Eggleston (1994, p.6) suggest that: “Two-thirds of the companies said that a
strategic advantage had been generated...with the greatest improvements stemming from
market competitive positioning, customer relationships and quality constrains”.
Although lean production has many benefits, there are also drawbacks. It can be a challenge
to record and accurately track inventory and material usage, especially when material usage
varies due to errors or the nature of the process, or there are very long lead times. Lawson
(2013) summarized the concerns of lean production as follows:
1. Firstly, capacity utilization is often sacrificed in conventional JIT environments (Slack
et al. 2001, p. 485) in favor of reducing inventory. One solution to this is to create an
annual- hours contract with staff so that capacity is elastic.
2. Secondly, there will be a bottleneck when kanban cards start piling up at a work cell
due to the longer task completion time than the taskt time. Furthermore, capacity
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planning is difficult in a pull-based JIT or orderless environment, especially if there is
different product portfolio and the operation times vary.
3. Thirdly, there are not enough historical records for analysis of processes and
continuous improvement because the limits of lean manufacturing techniques, which
is a main disadvantage of lean manufacturing. Furthermore, techniques such as
kanban are inadequate among suppliers, customers, subcontractors and other
partners in a global supply chain. Some lean manufacturing techniques are limited
within a factory.
4. Finally, lean production has to focus on total productive maintenance because there
is no safety buffer in a lean environment. If anything breaks down in the production
process, the entire material flow quickly stops.
In brief, lean manufacturing has often been seen as difficult to implement in construction
because of demand variations, changes of product mix and global distribution of supply
partners (London, 2008).
3.4 Supply Chain Management and the construction sector
SCM has been proposed as a solution to the construction industry inefficiencies (Bankvall et
al, 2010). It is now an approach which is on the national agenda for many countries (London,
2008). While emanating more recently from the manufacturing industries, improved
efficiencies in the construction sector have been flagged for almost as long as construction
has been around. For example Henry Ford, the founder of the Ford motor company,
‘dreamed about mass-producing homes using standard but modularised designs
with the modules built in factories to slash design and production costs while still
providing variety. A number of entrepreneurs actually created modular designs and
briefly set up production lines in the Unites States to make the modules for
prefabricated houses immediately after World War II’ (Womack and Jones, 2003, p.
51).
Authors such as Lonngren, Rosenkranz and Kolbe, (2010) and Cheng et al, (2010) argue
that the construction sector is one of the least integrated industry and in order to achieve
economic and labour efficiencies in the construction sector there needs to be a restructure of
the building supply chain. However, others such as London (2008) question if the
construction industry is as inefficient as everyone claims given the complexity of the nexus of
contracts that culminate on a construction project and perhaps alternative measures of
efficiency should be developed rather than adopting ill fitting productivity measures from
other sectors.
Since the early 1990s, the construction sector has begun to embrace SCM. However, Aloini
et al (2012) question if this has happened and state that attempted integration of SCM into
the construction sector has been met with significant challenges and is still too fragmented
currently to claim any sort of success. This is also surmised by others (Bankvall et al, 2010;
Khalfan and Maqsood, 2012; Shin et al, 2011). To date, the construction industry is lagging
behind with regards to the integration of SCM approaches, in particular with achieving the
required integration and managing the complex supply chains (Bankvall et al, 2010).
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Bankvall et al (2010) in summarising the SCM in construction literature, state that there are
researchers who believe that the construction sector lacks the will to do what is required to
successfully implement SCM. Furthermore thy find that there are questions over the
assumptions embedded into SCM not fitting within fragmented industries such as
construction.
The difficulty of applying SCM to the construction industry is well known (Doran and
Giannakis, 2011; Eriksson, 2010). As London (2008, p. 11) states
‘ultimately, effective SCM requires the ability to be able to identify and locate
differing levels and types of differentiation across various SM options. It is
suspected that very few firms have this holistic perspective of SC and typically
manage on one tier; which is their immediate suppliers’
Construction projects are highly dependent on the co-ordination of a large number of
stakeholders. Aligning all stakeholders to improve supply chain efficiencies is challenging,
especially as many of these actors do not have the power or ability to co-ordinate such a
change (Formosa and Isatto, 2011). On the other hand, Bankvall et al,(2010) provide an
overview of the challenges of SCM integration into the construction sector and what has
occurred to date to attempt to overcome these challenges. Less attention has been paid to
the nature of the construction supply chains and their industrial organisational economic
environment because it is the nature of the power relationship between the customer and the
supplier that ultimately will drive the procurement relationship (London, 2008).
SCM involves a high level of expertise, knowledge and skills at executive and site
operational level to ensure that policies and processes support the desired practices. SCM
involves four key sets of activities; Developing supplier group strategy maps; Implementing
strategic sourcing processes and practices; Streamlining supplier coordination systems; and
managing supplier performance for improved alignment (London, 2008).
3.5 SCM in Australia
Until the early 2000’s, there had been limited application of SCM in the construction sector in
Australia. An early study into SCM and the construction sector was completed by CSIRO
(CSIRO, 2001). This study focused on improving client-supplier relations through the use of
information technology. The project developed a web-based system for Bovis Lend Lease to
assist the company with SCM. The aim of the tool was to improve the supply chain to
become more efficient. While outcomes of the project identified the importance of
information technology and focusing on developing client-supplier relationships to improve
efficiencies, the research did not address the reduction or avoidance of waste materials.
However, it concluded that SCM was a useful approach to apply to the construction sector in
Australia.
Building upon this, Petrovic-Lazarevic et al (2006) interviewed eight Melbourne residential
builders regarding SCM and the role and importance of relationships within the supply chain.
They found that relationships and trust between building companies and suppliers is seen as
important in achieving and sustaining competitive advantage. In this regard the focus was on
improving economic efficiencies and ensuring timely completion of work for the companies
involved and does not mention waste. Interestingly, they found that while trust with suppliers
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was a key element in building relationships and more efficient supply chains, many of the
companies periodically searched the market for alternative suppliers to ensure they were
getting the most competitive price and quality for products and services. They also found
that smaller companies tended to have more personal relationships with suppliers.
The most comprehensive study in the area of construction supply chains was that produced
by London (2008) which involved mapping more than 1500 procurement relationships in the
construction industry on 5 major construction sites including the Federation Square, the state
Hockey and Netball stadium, a high rised housing apartment block, Etihad stadium (formerly
known as the Colonial Stadium) and a large greenfield housing development estate in
Williamtown. The mapping involved identifying the way in which the decision was made to
procure the supplier at each successive tier including the negotiating tactics during tendering
and after tendering – the study focused on the simply act of procurement as a means of
defining the structural and behavior characteristics of the construction supply chain. Through
exploring tendering behaviours and procurement decisions the economic market within
which each procurement relationship was embedded was described – thus describing the
countervailing power of supplier and customer. Some 11 different product sectors were
mapped including bricks, timber, composite facades, insitu concrete, pre-cast concrete, air
conditioning, fire services, glazing, aluminium, structural steel and formwork.
London (2008) presents sectoral case studies of interest to this research project; one on
concrete and one on brick – two of the three materials which are the focus of this research.
Both case studies present the actors involved, their roles and the process of moving from a
raw material to end product. It provides a greater understanding of how the supply chain
works for each material. For example it was found that subcontractors typically purchased
required concrete from the one manufacturer, therefore once the subcontractor is selected,
the supplier of the concrete is known. In addition the case study found that for the three main
concrete suppliers in the case study area, they all purchase products from each other’s
quarries, providing further complexities in attempting to develop an integrated supply chain.
While useful in terms of presenting the supply chain and a number of issues within these, the
focus is on understanding it from an economic efficiency point of view. There is no
discussion on material waste reduction or avoidance.
In addition Bankvall et al (2010) present a case study on the third material of this research:
plasterboard. Again there is no discussion in terms of waste material, although it is touched
on in the debate about ordering customised or standard sized plasterboards. The argument
for customised plasterboard is that it doesn’t require any cutting onsite, saving both materials
(onsite) and time, particularly as the manufacturer has the machinery to cut the boards,
rather than relying on humans to do it onsite. However, it reduces flexibility in that the
plasterboard might not be able to be used on any other projects if it can’t be used on the one
it was designed for. It also takes longer for customised plasterboard to be made by the
manufacture. The plasterboard supply chain is thought to be a fairly simple sequence of
activities compared to other construction products and materials.
London's extensive study of more than 1500 procurement relationships described the
structure and behaviour of the Victorian construction industry [including housing residential
and commercial sectors]. In this study (London, 2008), it was identified that although there is
the perception that the industry is highly fragmented, project oriented and consisting of
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temporary project transactional relationships these relationships are actually often
embedded within long term relationships between clusters of subcontractors and contractors
which have often extended for decades. Different trades have different economic market
structural and behavioural characteristics and supply chain management best practice can
only be developed with an understanding of these characteristics. This is most useful to our
study because it provides a starting point on how to focus on which supply chains the house
builder will have the greatest influence over in relation to waste minimization.
In summarising issues with the traditional house building processes, Womack and Jones
(2003) state that there is a significant portion of the construction time spent both waiting for
other trades to arrive and finish their work before the next phase can begin and in redoing
work that was not done correctly the first time. This has been allowed to go on as consumers
feel powerless to do anything about it, meaning that the system continues to be inefficient
because there is a lack of anyone holding the construction industry accountable. However,
the authors argue that the processes required for construction of a house are suitable to
follow a lean thinking or SCM approach.
The problem is the manufacturing sector is a relatively more neat and easy process when
compared to the building industry, meaning that the application of SCM is proving more
difficult (Aloini et al, 2012). London (2008) adds that a lack of continuity between projects is
a significant issue within the building industry in relation to SCM. Furthermore the complex
network of actors along the supply chain, including customers, planners, designers,
contractors, subcontractors, suppliers and government agencies. These characteristics of
the building industry in Australia (and internationally) have been argued to be a reason both
why SCM application will (CSIRO, 2001; London and Siva, 2012) or will not work. Aloini et al
(2012) state that these characteristics have hampered the adaptation of SCM from the
relatively more straightforward application in the manufacturing sector.
While SCM is emerging as an alternative management approach in the construction industry
in Australia, it is yet to be embraced by Australian Government policies. The Department of
Sustainability, Environment, Water, Population and Communities (DSEWPC, 2011) released
a construction and demolition waste guide in 2011. In this there is a strong focus on
recycling and re-use across the supply chain with only limited attention paid to reducing and
avoiding waste to begin with. Similarly, SCM is only briefly discussed in this guide. This
shows that the concept of SCM in the construction sector in Australia, is not yet entrenched
in the governments thinking and policy development.
3.6 SCM Internationally
Internationally, countries such as the UK have begun to discuss and assess the benefit of
applying SCM in the construction sector. The application of SCM in the UK emerged after
the Latham report in 1994 (Kalfhan and McDermott, 2006). For example BRE (2006)
(although pre-2008) suggests that it is critical to improve the efficiencies of supply chains
across the building industry as it is the cumulative actions of the supply chain which
determine total outcomes. They have set a 50% waste reduction target over current best
practice. While not specifically discussing SCM, the report does list a number of actions
needed across the supply chain which include:
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Quantifying the effects of different types of contracts and procurement on
resource efficiency, also exploring the use of incentives and penalties to reach
targets
Greater use of consolidation centres to maximise resource use, minimise
over-ordering and surplus materials
Producer responsibility – voluntary agreements with manufacturers and other
stakeholders that are based upon reducing the life cycle resource impacts of
products
Local collections or milk rounds for surplus products and materials, with
resulting local supplies of small/part packages of products/low impact
materials – possibly with community sector but health and safety risks would
need to be mitigated.
Another seminal piece of research, also from the UK, is the PhD work of Hong-Minh (2002).
Hong-Minh investigated the re-engineering of the UK private house building supply chain
and found that a reduction of the supplier base and the centralisation of supply greatly
improved the performance of the supply chain. This compressed the ordering cycle and
construction time required resulting in reducing total supply chain inventory costs by 20%
and the amount of labour required by 49%.
This was more than the efficiencies found by Khalfan and McDermott (2006) whose research
of the application of SCM in the UK construction industry found economic efficiencies of 1-
2% on professional fees and time efficiencies of 10-15%. Further benefits identified from this
process include the ability to apply lessons learnt in future projects, improved performance
management systems, fewer delays and added value. In addition, the application of SCM
and narrowing of suppliers was found to improve relationships, improve work quality
(through increased certainty about future work and ability to retain skilled and quality
workers) and improve resource organisation due to knowing in advance.
3.7 Current viewpoints and discussion
SCM is difficult to implement correctly. Aloini et al (2012 p. 736) state that SCM ‘must be
properly formulated, strategically planned, organized and executed. Thus, the adopting
organizations (mainly the general contractor and its subcontractors) have to deal with
managerial, organizational, relational and technological issues which must be appropriately
managed in order to effectively apply SCM principles, models and techniques and to
overcome the barriers to construction SC application.’
Walker (2012) argues that to achieve efficiencies in the construction sector, there needs to
be a focus on developing ‘value’. This is because having required resources does not
guarantee optimum value. To achieve this optimum value, there is a requirement for
commitment and social capital exchanges, an approach which goes beyond current SCM
approaches. The basic premise, in moving from SCM to value chain management, is to
consider each and every supply chain participants as value generating actor for both, the
final client as well as to other participants, thus assuming each participant is a client of
another participants when jobs are done and services or materials are supplied in this value
chain.
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The introduction of SCM from other industries (e.g. manufacturing) has meant that there has
been significant focus in the research and in practical applications of SCM in the
construction sector of testing the management approach and evaluating outcomes. In doing
so, there has been ‘particular emphasis on the development of normative ideal types for
effective SCM’ (Vidalakis et al, 2011, p. 215) however London (2008) identified quite early
on that this was perhaps not the most effective way to introduce supply chain management
into a project based industry. A project and portfolio based blueprint of key construction
supply chain activities was proposed and this is presented and briefly discussed in the
following section.
The focus of research and application of SCM in the construction sector has typically been
on understanding and developing relationships between suppliers and clients across the
supply chain in the anticipation of overcoming the barriers to the integration of SCM
(Bankvall et al, 2010; Bygballe, Jahre and Sward, 2010; CSIRO, 2001; London, 2008; Meng,
2010; Petrovic-Lazarevic et al, 2006). It has long been recognised that poor relationships in
the building supply chain stem from the fragmented nature of the building industry and the
lack of guarantee of future work (CSIRO, 2001). In particular it is about building these
relationships early enough in the project (or before it even starts) to ensure that maximum
efficiencies can be achieved throughout the project (Walker, 2012).
Meng (2010) has identified that there are limitations of previous research investigating
relationships, SCM and the construction industry. These limitations include; lack of rigorous
criteria and indicators for defining relationships; lack of description of relationships; and
actual assessment has proved problematic. In the research, Meng (2010) found that there
are 18 key relationship indicators. Of these there are some which are more important than
others. Furthermore, London (2008) adds that there is limited understanding of the wider
complexities of relationship development and decision making, with the focus to date being
on understanding the cost element of this rather than the sociopolitical economics
underpinning the way relationships are fomed, negotiated and enacted.
There has been a focus on the relationship between site productivity and improved material
management (London and Kenley, 2001). A recent development on the importance of
building relationships in SCM has been the research of Khalfan and Maqsood (2012) who
explore the idea that through improved knowledge management and long-term relationships
with suppliers, ‘supply chain capital’ is built. Through repeated use of the same suppliers and
the ongoing improvement in relationships and knowledge management, the supply chain
capital continues to build. This results in efficiencies, a reduction in waste and an increase in
innovation and learning from previous jobs. There is a continued failure to advance the
discussion beyond this focus and attempt to explore these elements in greater detail.
Indeed, London and Siva (2012) argue, in their research study on developing a methodology
for creating an innovation underpinned by a supply chain approach, that there is much
rhetoric stating ‘that SCM will solve problems, however, we know little beyond this’.
3.8 Summary
The building 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 (London and Siva,
2012). Vidalakis et al (2011) discuss how a significant gap in the current SCM and
construction literature and practice is the lack of logistical focus. Due to the temporary nature
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of projects and short-term nature of work, it is at times difficult within the construction
industry to build up a reliable supply chain (Khalfan and Maqsood, 2012). Vidalakis et al,
(2011, p. 215) argues that there has been too much focus on the strategic aspects of SCM
and ignoring the ‘fundamental implicit assumption of logistics management expertise
inherent within SCM’. Furthermore, the focus on contractor organisations has resulted in the
role of intermediary organisations (such as material suppliers) being overlooked (Vidalakis et
al, 2011). There is too much focus on understanding projects in isolation without taking the
more holistic industry approach (Bankvall et al, 2010).
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 (London, 2008). 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
Existing research has highlighted the problems in applying SCM within the construction
industry. Issues such as short-term working arrangements, lack of trust/information sharing,
limited customer focus, price-based selection and inefficient use of emerging and existing
technologies (Bankvall et al, 2010; Doran and Giannakis, 2011; Khalfan and maqsood,
2012; Petrovic-Lazarevic et al, 2006; Shin et al, 2011). 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 (Bankvall et al, 2010). The
construction sector has been described as being fragmented, highly reliant on short-term
contracting work, unreliable supply of materials, and often resulting in long and costly project
overruns (London and Siva, 2012; London and Kenley, 2001; Vidalakis et al, 2011). All of
which mean there are significant inefficiencies in the Australian construction industry
(CSIRO, 2001). A fragmented supply chain and resultant inefficiencies have been stated as
a barrier to the Australian construction industry competing internationally (Petrovic-Lazarevic
et al, 2006).
‘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 following Blueprint was developed and partially tested for the Qld government for the
supplier group strategy map. It attempts to identify portfolio and project based activities.
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Figure 3 Blueprint Supply Chain Management project based industry (London, 2008)
4.0 SCM and waste minimisation in the residential sector There has been an explosion of interest in the area of green or sustainable supply chain
management with more than 300 publications produced in the last 15 years in this area
(Seuring, 2012). Not all of these publications are directly related to the construction industry
or more specifically the residential construction sector, however, it does provide an indication
of the growing significance of this topic area.
A generic definition of sustainable supply chain management is provided by Seuring and
Muller (2012) as “the management of material, information and capital flows as well as
cooperation among companies along the supply chain while integrating goals from all three
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dimensions of sustainable development ie economic, environmental and social, which are
derived from customer and stakeholder requirements. In sustainable supply chains,
environmental and social criteria need to be fulfilled by the members to remain within the
supply chain, while it is expected that competitiveness would be maintained through meeting
customer needs and related economic criteria”.
Past work in sustainable SCM has tended to focus on external elements rather than the
firm’s internal elements such as resources and capabilities (Gold et al, 2010). Effective
sustainable SCM requires flexible interaction between various supply chain actors as well as
a long-term approach between the different actors underpinned by mutual dependency (Hult
et al, 2007; Spekman et al, 1998).
4.1 Integrated SCM
Integrated supply chains are increasingly being recognised as a win-win approach to
achieving waste minimisation in construction. In discussing the potential of greening the
construction supply chain in Singapore, Ofori (2000, p. 204) suggested a number of actions
or initiatives including:
Education: develop expertise in SCM within industry, train purchasing officers in key aspects of green procurement including performance evaluation and monitoring, increase knowledge of relevant environmental issues among construction practitioners
Case studies: document successful local and overseas examples of green procurement in construction, disseminate case studies using appropriate media
Support and promotion: government should provide direct support through its procurement policies and procedures, offer incentives to support clean production processes and practices, generally promote environmental responsibility among all construction agencies, enterprises and practitioners
Best practices and award: distil and disseminate best practices in green procurement, institute an annual competition to recognise excellence in green procurement as an adjunct to the existing award in the broad area of the environment
Whilst SCM can help to effectively green the construction supply chain in Singapore, Ofori
(2000) indicates that a number of major challenges need to be overcome including
conceptual problems of designing the appropriate supply chain and practical issues
associated with entrenched business practices and attitudes and lack of knowledge about
SCM and its benefits.
According to Zu and Zhou (2011) construction firms seeking to implement green supply
chain management should consider their management and choice of suppliers in terms of
how the collaboration with the supplier can contribute towards greening the supply chain.
Furthermore, “green” SCM involves examining the whole life cycle of a project. A framework
for strategy development for firms seeking to introduce sustainable SCM was proposed by
Kang et al (2012). The framework included five key perspectives:
Leadership for knowledge sharing
Innovation for product and process corresponding to the lifecycle of
sustainable supply chain
Integration of operations by the supply chain and its components
Improvement along with the management lifecycle of process
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Compliance of socioeconomic requirements and governmental regulations
In a study to explore the waste minimisation strategies utilised in high profile construction
projects in the UK (Dainty and Brooke, 2004), it was identified that a wide range of waste
minimisation techniques are currently being employed by large construction organisations.
The study revealed that the three most effective waste management solutions employed by
construction firms include:
1. the development of alliances with suppliers and recycling companies by forming
relationships with suppliers and secondary users of waste materials
2. increased use of off-site fabrication to control waste and damage
3. use of standardisation to improve buildability and reduce the quantity of off-cuts
Dainty and Brooke (2004, p. 27) pointed out that the two of the three most popular strategies
revolve around ways to avoid waste at the source and deal with waste as it is produced on-
site, which suggests that there is scope to remove waste throughout the design and
specification project phases within what is terms “waste minimisation partnerships”. Through
the development of integrated waste management strategies project stakeholders can work
together to achieve significant improvements in waste management performance. A key to
the solution is to embed the importance of waste minimisation as a key performance criteria
throughout the supply chain whereby all project stakeholders need to be committed to waste
management as part of an integrated supply chain. This aligns well with the national policy
developed by Building Research Establishment in 2006 and discussed in the first section of
this report on Waste in Construction.
4.2 SCM & waste minimisation in the residential sector
While this review has presented a number of articles and research regarding SCM and the
construction sector, there is little attention to waste reduction and avoidance in the
residential construction sector. While there is limited focus within the research addressing
waste reduction and avoidance in the construction industry from a SCM perspective, one
emerging discussion in this area is with regards to pre-fabrication of dwellings (Eriksson,
2010). Eriksson (2010) discusses the benefits of ‘lean construction’ as a method of SCM.
While focusing primarily on the economic and labour efficiencies achievable, he touches
upon the fact that such an approach would also lead to a reduction of material waste.
However this point is not discussed in detail. However, London and Kenley (2001) in their
review of SCM and its application in the construction industry, highlight that there are issues
with lean construction. For example while lean production had been embraced by the auto
industry, it was criticised for the negative impact it had on workers.
Another more recent article discussing SCM and pre-fabrication (or modular) construction is
that by Doran and Giannakis (2011). The authors argue that although there is increasing
engagement with SCM from the construction industry, there are still inefficiencies and further
work is required. They discuss the benefits of offsite versus onsite construction. They
discuss the role which SCM can play with regards to offsite construction. Again, this is more
focused upon economic and time efficiencies but they do state that waste material reduction
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is a benefit of modular construction although there is little real data to evidence this and the
waste may simply be shifted from site operations to a more controlled environment.
In the UK’s government’s, 20 year construction waste reduction strategy, it was identified
that a move towards factory produced building will reduce construction waste and that this
type of construction will play an important role in the future in reducing construction waste
(BRE, 2006). However, while such examples seem to be pushing for the benefits of
prefabrication in the construction industry, others drawing upon SCM argue that onsite
construction allows for greater outcomes through the ability for more flexibility and questions
the gains in efficiency of prefabrication (Bankvall et al, 2010).
The discussion of waste reduction in the SCM and construction literature is primarily in
regards to wasted economic, time and labour rather than wasted materials (Eriksson, 2010).
An holistic approach to waste avoidance and reduction is required whereby we must
examine upstream decisions and behaviour in the supply chain as the problem of waste
although evident at the site in many cases is not the root cause of the problem. Some key
reasons why waste materials are generated can be attributed to the following:
design sub-optimisation [as evidenced by simple matters such as cut bricks and
plasterboard sheets etc]
ordering inaccuracy through lack of skills and adequate documentation provided to
project procurement officers
wastage through ordering inaccuracy due to low confidence levels in the design and
design development documentation
incorrect usage of materials onsite and poor management and construction
technique skills
site reworks due to a range of factors including design changes, poor constructability,
poor workmanship and client changes
site ground conditions and associated preparation [cut and fill poorly engineered] as
well as contaminated soil
over packaged construction materials
Clearly participants at each phase of the project can provide input into solving the problems
of wastage - specifically the concept and developed design functions [architectural, civil
engineering and environmental engineering], tendering and procurement functions and pre-
site preparation and onsite construction operational functions. In the housing sector these
various functions are internal to the organisation as well as outsourced externally. A SCM
framework will begin to solve such problems at each of the 5 cascading levels:
intra-organisational function;
inter functionional,
inter-organisational,
supplier network and
regional clustering.
Different participants will exert varying degrees of influence at each level of the supply chain.
The causes and the current practices of volume residential house builders need a closer
examination as they shall provide the aligned objectives between the organisations and their
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designers, subcontractors and suppliers when developing a supplier group strategy. In the
broader Australian construction sector, as well as the volume housing construction
organisations, these supply chain management activities have had limited attention.
5.0 Conclusion There has been increasing research interest in the area of sustainable supply chain
management. Significantly though much less attention has been paid on the investigation of
integrated supply chain management for construction waste minimisation or avoidance in the
residential housing industry. Given the increasing costs charged for construction waste
disposal and recycling and limited landfill capacity; innovative approaches to avoiding and
reducing waste by housing construction organisations has never been more urgently
needed.
There has been some limited ad-hoc success of SCM integration into the construction
industry in Australia and internationally (London and Siva, 2012). However, there remains a
dearth of research, understanding and application of SCM in the Australian construction
sector. This is even more so the case with regards to SCM and waste reduction and
avoidance in the construction sector specifically.
This review has identified various policy level approaches in various countries and
interesting data for benchmarking purposes in our study. The sources and causes of
materials waste research is useful as it highlights clearly the role of various supply chain
participants. Various strategies in supply chain management and sustainability research also
provides a contribution to developing organizational and project level strategies to frame our
study. There is no research that specifically investigates the development of individual and
organizational capability in relation to exploring an holistic supply chain approach to waste
minimization although this is clearly on the agenda of numerous governments. There
appears to be useful organizational supply chain management level strategies that we can
build upon but little action research case study oriented material that has been evaluated
within house building organisations in Australia or internationally. Our study is well placed to
make a practical and theoretical contribution to the field of waste minimization using supply
chain management strategies.
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