Jaz Vilkhu, specification operations manager at building materials supplier Marshalls, explains why supply-chain management isn't happening yet in construction taken by 2004
Supply-chain integration is vital to delivering Sir John Egan's 1998 report, Rethinking Construction. Nobody can deny that. However, although the industry has acknowledged the importance of supply chains, the emphasis at present remains very much on the relationship between the client and contractor.

Personally, I doubt that true supply-chain integration is happening, and for one simple reason. While the decision-makers are aware of what needs to be done, they are struggling to quantify the business benefits and to organise the process of implementation.

It is true that supply-chain integration is occurring in a small but growing number of instances, and it would be very useful if the rest of the industry knew about them and could learn from them. That way we could educate the whole industry and move things forward. Unfortunately, there is reluctance to share the information, and too much secrecy still surrounds these developments.

Sharing knowledge
Currently we rely upon a limited but forward-thinking number of Movement for Innovation demonstration projects to highlight the business gains to be made from integration. It's very clear from Department of Trade and Industry figures that the rest of the construction industry still has much to learn. Therefore it is vital that we all share the knowledge we have and apply true integration methods. To do this we have to become more open, in the true spirit of Rethinking Construction.

At a grass-roots level the business case is being made with the support of the Construction Best Practice Programme. The programme's workshops, website and toolkits all serve to provide the basic grounding for developing best practice.

But it remains the duty of the rest of the industry to ensure that the message is delivered to the whole of the supply chain.

Contractors make changes on the basis of price and not whole-life costs or aesthetics. This approach does not take into account buildability at all

Marshalls, in partnership with other manufacturers, has worked with the Construction Products Association to develop pan-industry manufacturing key performance indicators. This form of benchmarking plays a key role in disseminating best practice and thus supply-chain integration, and it can be used by managers when they direct staff to implement improvements. It is surely the way forward, but to make reform possible every link in the supply chain must be aware of the lessons already learned from supply-chain integration projects.

One of the biggest areas of potential improvement lies with the contractor and relates to design and build. According to CPA figures, contractors and cost consultants alter 80% of architects' specifications. Their changes are made on the basis of price and not whole-life costs, aesthetics or the synergy between products. This approach ignores the possibility of wastage down the supply chain and does not take buildability into account at all.

More and more contractors possess in-house design teams, and therefore they have even more of a responsibility to ensure specification is right the first time. The best way to do this is by integrating manufacturers effectively. Manufacturing can help construction by outlining the waste that exists in its processes and recommending how it should be unlocked. Typical areas of improvement are ease of procurement, savings in installed costs, new product development, innovations to overcome skill shortages, standardisation, safety on sites and lower maintenance products, to name but a few.

One-stop solution
Some contractors have begun to note the value of integration, and a number of them are now asking for proposals from us that cover our whole product portfolio. It seems that they now recognise the value of a one-stop solution and the gains to be had from using standardised products in more innovative ways.

Ultimately, we are all working towards delivering better buildings for our clients,and towards doing it more effectively, economically, sustainably and with buildability in mind. To do that we must accept the importance of supply-chain integration for the industry, understanding that it will deliver real benefits to all involved.