14.01 Supply Chain
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Overview
The design, manufacture and installation of building cladding is complex for the following reasons:
- The diversity of materials is high,
- The number of products is large,
- The performance requirements;
- differ from contract to contract,
- are numerous and interactive,
- may conflict with one another.
For this reason the supply chain involves many participants, many contractual interfaces and many causes for misunderstanding and conflict.
The wide diversity of materials leads to a large number of suppliers. These may be at the level of specialist contractor, component or system manufacturer or material suppliers. Increasingly labour for installation is also supplied by a separate, labour only, sub-contractor.
It has to be understood that the supply of materials and components is normally accompanied by the supply of technical information in the form of design guidance, test reports, installation instructions and sometimes training.
The principal considerations when procuring a wall are, image:
- Performance
- Appearance
- Cost
- Materials
- Quality
Materials
The materials used in cladding and fenestration can be broadly classified image but each material type then includes many forms and solutions that may be adopted to meet design and cost requirements. Glass, image, and finishes probably offer the greatest variety of separate materials or solutions.
The level of complexity means that decisions about material performance have to be taken by specialists or with their assistance. Frequently the architect or engineer does not fully understand the full implications of selecting particular products or materials and either manufacturers provide advice or consultants are called in. The larger architectural and engineering practices may have this level of expertise in the form of an in-house consultant or expert.
Performance
Facades and their components have to provide a broad based performance spanning over many aspects of building use, image. However, each of these is quite complex. For instance fire image or thermal performance image. More importantly the performance requirements may conflict one with another. Certainly substitution of one component with another may improve one aspect of performance but its use may also lead to a reduction in some other aspect of performance.
Much product and component knowledge lies with the manufacturing companies but they cannot be expected to know about all aspects of the wall nor be responsible for the use to which their product is put. This has generated a role for the consultants who draw relevant information from manufacturers and other sources and take an overview of the building cladding performance. This involves optimising the performance of the wall against the many requirements that will be made of it.
Costs
At the outset of a contract the client should have taken decisions on costs, design life and quality as part of the client's brief. Where whole life costs are to be considered this adds to the amount of technical information to be exchanged.
As a minimum all suppliers and contractor should be aware of the design life of the building and of the components or materials they are supplying. All too often decisions about material and component selection are taken in complete ignorance of this information.
Unlike the structure of the building that largely goes unseen in many buildings, the cladding is the building's 'clothes' creating its appearance and image. For this reason the cost of a facade relates not only to the delivered technical performance but also the materials used and the appearance. For this reason cladding costs in the year 2000 range from £100 / m2 to over £1500 / m2. The client seldom wants the cheapest cladding. In most cases the client wants the best cladding he can procure within his budget but for 5 percent less than he is first quoted. It is often easy to cheapen a facade by using cheaper materials and procurement of cladding is continually involved with the negotiation of cost and delivered good.
Participants in the supply chain
A supply chain comprises a number of companies who deal one with another to pass on goods or services that are at each step further aggregated into a finished product or service. It is known as a supply chain because frequently it is a linear linkage of suppliers and purchasers with instructions (specifications) and money passing down the chain and delivered goods and services passing up the chain. The linearity is usually determined by the route the goods take which is the reverse of the route taken by the instructions and orders. In the construction industry the supply process resembles a network rather than a chain because the two paths are not always the reverse of one another.
The construction industry supply chain is shown in figures for the following procurement methods:
To the left is the client who heads the supply chain and progressing to the right are those who supply the client: lead contractor, specialist contractor, sub-contractor and supplier. The chain is complicated by the presence of the client's design team. The design team work for the client and instruct the lead contractor or construction manager but they also communicate with the specialist contractor who receives instructions from both the lead contractor and the design team. The Client's design team is discussed in more detail in Section 14.04.
The supply chain spans two industry sectors, manufacturing and the construction industry. The cultures of the two are very different and the specialist contractors in particular try to live in both sectors. This is not easy and increasingly specialist contractors are outsourcing their manufacturing or partnering with a manufacturing company.
Supply chain management
Supply chain management has been practised in the automotive and aerospace industries for many years. It has, however, only recently been introduced to the construction industry. A possible reason for this is the unique nature of so many building designs.
In industries where supply chain management was originally practised articles were mass produced (cars) and components (tyres etc.) were supplied in great numbers over a period of time. It clearly made sense to optimise those contracts for cost, quality and delivery and establish long term relationships between supplier and purchaser. By contrast the constructiion industry regards every building as a one-off. Products are produced to match the architects' designs rather than to reduce the number of suppliers to any one contractor or to optimise the supply chain. Purchases of cladding, windows and so on were normally made on a site by site basis with no co-ordination of the main contractor's purchasing. Procurement has changed as contractors have realised that small savings and efficiencies in the purchasing of millions of pounds of goods will considerably increase their profits.
Supply chains may be managed by partnering, particularly long term, which has recently been in vogue in the construction industry. However, partnering doesn't always work. Particularly at the lower levels where a good specialist contractor is able to satisfy say ninety percent of the work put to him by a lead contractor but cannot do highly specialised jobs of a particular kind.
However, the principal requirement is for everybody at every level to know and manage their suppliers better. This generally means using fewer suppliers but the number of suppliers will still be large given the diversity of materials and products used. The increasing availability of computers is facilitating the collection of knowledge about suppliers. There is also a cultural change with many contractors placing a greater emphasis on purchasing and setting up central purchasing organisations.
Studies of other industries have shown that within a linear supply chain control can only be exercised to a depth of two or three levels. Clearly a purchaser passes instructions to a supplier and may include instructions that constrain or control his purchasing. Thus the control extends down two layers of supply. To do more than this becomes difficult for contractual reasons and also because the original specifier has inadequate knowledge to specify in sufficient detail the base components and materials used.
In the context of the cladding this means that the client will appoint the main contractor and frequently has a say in which specialist contractor will undetake the cladding contract. Only on the larger contracts or where particular technical problems have to be resolved will the client take an interest in who supplies the glass or the aluminium stick system.
Increasingly design responsibility is being devolved down the supply chain so that specialist contractors and component suppliers are required to supply against a performance specification.
The Construction Industry Board has published 'Advice on Partnering' which includes the following views of clients and suppliers that apply throughout the suply chain.
Curtain walling and cladding are often of high value, certainly as a proportion of the contract value. The client frequently perceives them to be a high risk component of any building project and so responds in the way shown here.