Half-empty lorries clogging up the nation’s roads, site workers unable to locate vital materials, £3bn a year of waste … a report released today highlights just how poor logistical planning in the construction industry is. So, what can be done about it?

Pssst – want to cut traffic congestion, carbon emissions and get £3bn for free? No, this is not a spam email message promising untold wealth but the central tenet of a report published today by the Strategic Forum. Prepared by the Construction Products Association, it’s called Improving Construction Logistics and it concludes that the construction industry is throwing away £3bn every year thanks to poor logistics.

The amount of waste highlighted in the report makes depressing reading. It says that 10% of a skilled workers’ time is spent either finding materials and equipment or waiting for them to turn up. On top of this, many construction lorries are travelling around part-loaded or empty. Excessive vehicle movements increase congestion and carbon emissions – a fact that has prompted Transport for London to fund an initiative to improve construction logistics in the capital (see “The logistics expert”, overleaf). Materials that arrive on site too early get damaged, which either affects the quality of the finished product or results in materials having to be thrown away. Health and safety performance is also affected, as workers are moving goods around site unnecessarily and excessive vehicle journeys inevitably add to accident figures. None of this exactly promotes construction as a green or safety-conscious industry.

The main reason that nothing is being done about this problem is the construction industry’s fragmented nature – there is no obvious point of responsibility for improving the situation. The conservative nature of the industry doesn’t help, either. “Traditionally the industry has been prepared to accept this waste whereas other sectors have done something about it,” says John Brooks, an associate director of Mace, which is supplying logistics services at Heathrow’s Terminal 5. “We have got into this cycle of perpetually over-ordering materials and we don’t seem to care what happens further up the supply chain.”

Driving us crazy

A lack of trust in the supply chain is another reason why there is so much waste. “We get people ringing up on a Monday morning saying they need the materials the next day, then we find out they’re still sitting around three weeks later and have got damaged,” says Michael Ankers, chief executive of the Construction Product Association. “Manufacturers have got to give complete assurances that the materials will be available when needed, particularly if they’re given plenty of notice.”

On a more positive note, the report suggests ways of tackling the problem. The key strategy is planning in advance – at the design stage. The report recommends that designers prepare a process map that shows the flow of materials. Phil Holden, managing director of architect Pascall + Watson, says the influence that design can have on logistics was brought home to him on a satellite pier at Stansted airport. To illustrate his point he gives the example of the pier’s cladding modules, which were supplied by E E cladding specialist Schmidlin and were trucked in from Switzerland. The optimum width for transporting the cladding modules was 1.8 m, but the optimum size for speedy erection was 2.5 m. Holden says: “We had to do a complex calculation as the choice was between more lorries and faster erection, or slower erection but with fewer lorries.” In the end wider modules were chosen, which might seem bizarre, but in the context of the logistics of the whole project it was the most efficient solution.

The report also recommends that main contractors draw up a logistics plan at the beginning of a project. The main contractor would consult with specialist contractors and product manufacturers and would then draw up a bill of materials needed for the project. Product manufacturers would have advance notice of what was needed and could help streamline project logistics.

This approach is already being used by Bovis Lend Lease. Gavin Heaphy, pre-construction director for the company’s strategic clients group, says: “We get involved at the very early stages of projects to put together a strategy for the project delivery. By the time we get to site we have a very well-formulated plan in terms of design, logistics and how we interface with trade contractors.” He adds that early involvement of trade contractors is crucial.

Ultimately, however, saving that £3bn a year will only be possible if the entire industry moves forward. A key barrier to progress is the fact that there is virtually no published evidence of the savings that can be made from good logistics. “There is very little understanding of the costs of logistics in the industry, as there are very few case studies to demonstrate the savings,” says Mike Eberlin, the commercial director of Castle Cement. “We are still on the starting blocks.” Perhaps, after the Strategic Forum’s report, the industry will finally move into full stride.

Declogging roads: The materials supplier

Construction products suppliers have a key role to play in improving construction logistics as it is their vehicles that are clogging up the roads. Supplier Wolseley is trying out a number of initiatives to reduce lorry movement and provide a better service. Harvey Swain, the company’s general manager for logistics development, says: “As we have such a large product portfolio we can consolidate transport to site by pooling branch transport,” he says. “We don’t want two vehicles part-loaded when we can have one fully loaded.” The company, which has dedicated branches stocking plumbing products, general building products, timber and parts, has carried out a consolidation trial involving 100 branches. “If this is successful we will roll it out across the business,” says Swain.

Wolseley hopes that it will soon be able to guarantee that it can supply 90% of its product range at a branch, and the other 10% on next-day delivery. Currently the company has 80% same-day availability. The 10% improvement would help to raise contractors’ confidence in the availability of materials, thereby preventing premature ordering of materials that subsequently get spoiled.

Wolseley is also working with manufacturers to streamline deliveries to its distribution centres. Instead of a manufacturer delivering its products to a centre then returning to its factory with an empty lorry, Wolseley will pick up products from the factory with its own vehicles. In this way it can improve the co-ordination of deliveries to the centres from the many manufacturers’ factories.

Swain also agrees with Wilson James’ Sullivan (see “The logistics expert”, overleaf) that consolidation centres are “absolutely critical”, and will form an important part of delivering the 2012 Olympics in London.

One day at a time: The logistics expert

Logistics specialist Wilson James has teamed up with Transport for London to launch a logistics solution borrowed from the retail industry. The idea is that material suppliers deliver to a centralised consolidation centre, based close to the M25, rather than struggling in to central London. Wilson James then packages up the materials into “daypacks”. Each pack contains everything a trade contractor needs for a day’s work, and is delivered one day in advance to the precise location where it is needed on the site. The main advantages of this approach are that full delivery trucks travel to site rather than half-empty ones, and workers don’t spend valuable time moving materials around site.

Gary Sullivan, director of Wilson James, says: “A consolidation centre could reduce carbon emissions and congestion by cutting the number of freight vehicles. A typical 28,000 m2 office development has 100 trucks of materials a day and in addition there are 30 to 40 vans delivering last-minute items such as nuts and bolts. We want to reduce that more than 50%.”

Another advantage offered by this system is that components can be assembled in controlled conditions at the centre rather than on site. This approach has the potential to further reduce lorry movements. Sullivan says he is looking at the possibility of assembling ductwork at the centre. “Ductwork is largely air and is very expensive to transport,” he says. “You could deliver it in flatpack form and assemble it at the consolidation centre.”

Currently developer Stanhope and contractor Bovis are involved with this pilot with four projects set to be serviced by the centre, which went live yesterday. “We hope to bring in other projects and ultimately it will be self-financing,” says Sullivan.

He says a key issue is proving that the approach saves money. “The difficulty is persuading the trade contractors to contribute financially so they can gain benefits that they can ultimately offer the client,” he says. “The financial contribution is not an exact science yet.”