Procurement Chain Management in the Construction Industry

Researcher(s)

Dr. Parviz (Perry) Daneshgari
University of Michigan’s Engineering
School and President of
Motor Consultants of America
3040 Airpark Drive South, Suite C
Flint, MI 48507
Tel: (810) 232-9797
Fax: (810) 232-9746
Email: perry@mca.net
Website: www.mca.net

Topics

Summary

Changes in customer expectations in the construction industry regarding project delivery, time, cost, and quality have forced stakeholders to search for new operational models. While productivity increased significantly for most industrial sectors during the 1990s, it decreased for the construction industry. One cause of this is that the procurement chain management system is no longer satisfying market requirements.

There was an urgent need for improvement of the construction procurement model. A variety of alternative models are used throughout the industry. The Electrical Contracting Foundation (ELECTRI’21) commissioned research to investigate the prevailing, existing, and alternative models of procurement. To adequately assess the strengths and weaknesses of each model, a neutral comparison was conducted. The investigation found that none of the existing and alternative models offer an efficient, streamlined approach to procurement. The study recommends the development of a new procurement process to achieve better time, cost, and quality. This can be accomplished through direct collaboration with all stakeholders in the procurement chain to produce a horizontally integrated procurement process.