DERIVING VALUE THROUGH MANAGEMENT OF SUPPLY CHAIN INTERFACES

When looking into Supply Chain Management one of the most difficult problems that practitioners and researchers face is the number of interlinked connections between firms, projects, markets and technologies (or systems)... There are so many variables and uncertainties in construction projects it is very hard to map the associations between vast number of supply chain firms involved in a construction project. However, in this post I will briefly discuss the importance of a management of supply chain interfaces so that more value can be derived from supply chain interaction process.

The interfaces where two or more firms come together depends on nature and type of above-mentioned factors. An interface can be between people, technologies and systems.  It is very important to identify the key interfaces as these interfaces can shape the interrelationships (at project and organisational level). Identifying the key interfaces is also important to manage them more effectively. Not all interfaces of supply chain interactions can be managed at project or organisational level . In other words in a supply chain relationship, it is not possible to manage all the entities of a relationship.  As I mentioned in the beginning, this is largely due to the fact that there are so many interlinked connections between various actors, resources and firms in construction supply chains.

To give an example, the key interface in a relatively small scale project may be the inter-personal relationships between high-level managers.  Therefore managing the inter-personal relationship may be more important and commercially beneficial for the interest of both firms. In much larger scale construction projects the key interface may be the technological integration between supply chain firms, or the interface at the construction site where multiple firms come together to physically engage with the site and construction activities.  To avoid any friction and improve inter-firm relationships, the interface between dyadic and supply-chain firms at construction site may need the majority of effort and focus... Just to remind that the key interfaces in a supply-chain interaction can be different project-to-project so priorities for  managing these interfaces can be different.  Hence identifying the key interfaces can help to improve value generation, performance in terms of cost and time, and relationship aspect of supply chain processes.