Logistics Strategy for Building Contractors: context, content, and process

A logistics strategy is at the foundation of how a company manages the flow of resources in the supply chain. It ensures that a company’s logistics function contributes to fulfilling strategic goals. For example, logistics support building operations in the project-based building construction industry by ensuring that resource flows are managed efficiently in the supply chain and at the construction site.

There is a tendency to focus on operational logistics issues and to adopt established logistics principles from other industries to solve logistics-related problems in building construction, which typically favors “one size fits all” solutions. However, these approaches to construction logistics are problematic because building contractors target different market segments through their types of products, production methods, and supply chains. Therefore, there is no “one best way” of managing logistics in building construction. 

A thesis by Petter Haglund of Linköping University focuses on how a building contractor can adopt a more strategic and long-term approach to logistics. Strategy is typically regarded in three dimensions: context, content, and process. Consequently, building contractors need to understand the logistics strategy context, how it influences the logistics strategy content, and the process of formulating and implementing a logistics strategy. Therefore, the purpose of this licentiate thesis is to investigate the fit between logistics strategy context and content for building contractors.

To fulfill the purpose, the following two research questions are answered in the thesis:

RQ1: What elements of logistics strategy context and content can be used to assess the fit of building contractors’ logistics strategies?

RQ2: What leads to fit/misfit in building contractors’ logistics strategies?

A combination of conceptual and empirical research methods has been used to answer the research questions. The conceptual part comprises a literature review used to derive constructs from developing conceptual research frameworks. The literature review also served as input to defining research questions and as guidance for collecting empirical data. The empirical methods used are based on case studies to develop further and verify the conceptual research framework.

The main findings of this thesis are four logistics strategy context elements and five content elements that can be used to assess the fit between a building contractor’s logistics strategy context and content. This fit is vital for logistics as a support function for a cost/delivery or flexibility-oriented competitive strategy. However, the fit is difficult to achieve in practice, and the logistics strategy process can be constrained by the building contractor’s previous investments and the support given by internal stakeholders. This means that fit is not solely a deliberate choice made for efficiency/effectiveness reasons but includes previous and future directions and managerial discretion. 

This thesis contributes to the logistics strategy body of knowledge concerning the context, content, and process dimensions of logistics strategy within building construction. The thesis shows trade-offs in selecting a logistics strategy that supports a cost/delivery or flexibility-oriented strategy. These trade-offs emerge due to different degrees of pre-engineering, types of production systems, and supply chain structures employed by building contractors, which building contractors need to address during logistics strategy formulation. A logistics strategy profiling template was developed, a tool that managers in building contractor organizations can use to analyze and reconfigure a logistics strategy. Furthermore, the thesis highlights that building contractors should establish a central logistics function responsible for strategic logistics decisions, regardless of their logistics strategy context.

Source: Linköping University, Faculty of Science & Engineering

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