European Journal of Purchasing & Supply Management 8 (2002) 173–183

A review of the progress towards the adoption of supply chain

management (SCM) relationships in construction
Mohammed Saada,*, Martyn Jonesb, Peter Jamesa
a
Bristol Business School, University of the West of England, Frenchay Campus, Bristol BS16 1QY, UK
b
Faculty of the Built Environment, University of the West of England, Frenchay Campus, Bristol BS16 1QY, UK
Received 14 March 2001; received in revised form 22 November 2001; accepted 9 March 2002

Abstract

This paper examines the early progress towards the adoption of supply chain management (SCM) relationships in construction. It
is based on a literature review and survey of the views of construction practitioners. We contend that SCM has many of the features
associated with a ‘fifth generation innovation’. This paper suggests that although construction practitioners have some knowledge
of SCM they need a better conceptual understanding of it and new and more systematic approaches to its implementation.
r 2002 Elsevier Science Ltd. All rights reserved.

Keywords: Construction; Supply chain management relationships and innovation

1. Introduction tion’. The second section examines the extent to which

Following the examples of other sectors of the
economy, a small but increasing number of construction
organisations are beginning to adopt supply chain
management (SCM) to improve their performance and
to address their adversarial inter-organisational purcha-
ser-supplier relationships and fragmented processes.
This paper considers SCM as an example of ‘fifth
generation innovation’ that Rothwell (1992) describes as
significantly influenced by the formation of greater
integration, networks, collaboration and alliances lead-
ing to a variety of external relationships. It is seen as a
demanding innovation, which builds on previous
changes such as total quality management (TQM) and
just-in-time (JIT). Although SCM in construction is still
in its infancy, the objective of this paper is to investigate
its adoption to date and to examine whether its
development corresponds to the key features of such a
class of innovation.
The paper consists of five sections. The first section
highlights the key features of ‘fifth generation innova-
*Corresponding author. Tel.: +44-117-3443463; fax: +44-117-
3443976.
E-mail addresses: mohammed.saad@uwe.ac.uk (M. Saad), mar-
tyn.jones@uwe.ac.uk (M. Jones), peter.james@uwe.ac.uk (P. James).
SCM is an innovation of this type. Through a review of
changes already introduced in construction, the third
section examines how this industry is progressing
towards the adoption of SCM and improving relation-
ships. Through a survey, the fourth section examines the
early adoption of SCM in construction. In conclusion,
the paper brings together the findings from the literature
review and the survey to evaluate the initial develop-
ment of SCM in construction against the key features of
‘fifth generation innovation’. This evaluation suggests
that the adoption of SCM in construction is charac-
terised by a significant number of limitations and
inconsistencies.
2. Review of the key features of innovation
Innovation is a complex process as it normally
involves many different functions, actors and variables.
It comprises a whole sequence of events that occur over
time and which involves all the activities of developing a
new product/service or process. The development of
innovation requires time for organisations and indivi-
duals to gain capability, experience, knowledge and
information. It is a cumulative and evolutionary process
(Clarke and Juma, 1987).

0969-7012/02/$ - see front matter r 2002 Elsevier Science Ltd. All rights reserved.
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174 M. Saad et al. / European Journal of Purchasing & Supply Management 8 (2002) 173–183
Innovation is increasingly defined as the interaction of
the dynamics of the process, the firm and the environ-
ment in which the firm operates. Its development
depends on feedback mechanisms between external
environments and technical developments (Freeman,
1987). Innovation is increasingly generated by networks
of relationships between firms, subcontractors and
government institutions rather than just within organi-
sations (Cooke et al., 2000).
The significance and influence of interactions and
feedback mechanisms on the development of innovation
are largely explored in the literature, which has shifted
the debate from an emphasis on internal structure to
external linkages and processes (Tidd et al., 1997;
Harland et al., 1999). These external linkages are
increasingly being used as a rapid response to fast
changing needs through the pooling of resources and the
sharing of risk. This type of innovation can be seen as a
way to deal with growing uncertainty, complexity and
competition, and to facilitate learning and further
innovation. It can be described as a collective process
which depends on many different interactions and
relationships between an organisation and its external
environment, and which includes suppliers, customers,
training bodies and government agencies (Gann and
Salter, 2000). Rothwell (1992) defines this type of
innovation as the ‘fifth generation innovation’,1 which
is seen as a multi-factor process requiring high levels of
integration at both intra- and inter-organisation levels.
The key factors associated with ‘fifth generation
innovation’, which will be used to assess the introduc-
tion of SCM in construction, include:
* a multi-factor process;
* a long process which is cumulative and evolutionary;
* a process comprising a number of stages including the
need to innovate, knowledge awareness, evaluation of
alternative innovations, planning and implementa-
tion;
* effective intra- and inter-organisational relationships
and strong interactions with the external environ-
ment;
* a strategic and long-term approach and continuous
learning;
* top management commitment and ‘champions’.
3. SCM: a fifth generation innovation
The objective of this section is to explore the concept
of SCM and its similarities with the ‘fifth generation
innovation’. SCM is a concept that originated in
manufacturing industry. It was developed from innova-
1
For more details about this fifth generation model and other
models see Rothwell (1992).
tions such as JIT (Vrijhoef and Koskela, 2000) and the
field of quality control and TQM (Wong and Fung,
1999).
SCM can be seen as an example of evolutionary and
cumulative innovation, which is often described as
emanating from internal programmes aimed at improv-
ing overall effectiveness. The focus is now not only
limited to increasing the internal efficiency of organisa-
tions but has been broadened to include methods of
reducing waste and adding value across the entire supply
chain (New and Ramsay, 1997; Harland et al., 1999). It
is seen as a set of practices aimed at managing and co-
ordinating the whole supply chain from raw material
suppliers to end customers (Vollman et al., 1997) and
which develop greater synergy through collaboration
along the whole supply chain (New and Ramsay, 1997).
This more holistic approach is associated with the
effective management of the interfaces between all the
organisations involved (von Hippel, 1986), and the
integration of both upstream and downstream processes
.
(Harland et al., 1999; Christopher and Juttner, 2000).
This significant emphasis on co-ordination and integra-
tion is strongly linked to the development of more
effective and longer-term relationships between buyers
and suppliers (Spekman et al., 1998; Kosela, 1999).
These new types of relationships are increasingly
perceived as a means to utilise resources better through
the whole supply chain (Dubois and Gadde, 2000). In
addition, they can also lead to greater openness and
transparency in transactions, and increased trust and
commitment (Ali et al., 1997). There are successful
examples of where SCM is delivering significant
performance improvements and increased competitive
advantage (Houlihan, 1985; Burgess, 1998). It can also
be an important element in innovation in products,
processes and organisation (Holti, 1997). Information
can be more readily shared and knowledge identified,
captured and disseminated throughout the organisations
in the chain (Edum-Fotwe et al., 2001).
However, SCM is a long, complex and dynamic
process. Its implementation requires a thorough under-
standing of the concept (Akintoye et al., 2000; Whipple
and Frankel, 2000; Edum-Fotwe et al., 2001). It is also
seen as closely dependent upon the ability to create,
manage and reshape relationships between individuals,
organisations and networks within the supply chain
(New and Ramsay, 1997; Spekman et al., 1998; Harland
et al., 1999). The shift from an adversarial to a longer
term and close relationship is associated with new
organisational arrangements (Savage, 1990) leading to
greater synergy (Harland et al., 1999), transparency,
openness, sharing and trust (Sako, 1992; Whipple and
Frankel, 2000). Such an approach, however, requires
considerable commitment and resources, and takes time
to develop. Further difficulties include a lack of
common purpose, multiple and often hidden goals,
 M. Saad et al. / European Journal of Purchasing & Supply Management 8 (2002) 173–183
power imbalances, different cultures and procedures,
incompatible collaborative capability, the tension be-
tween autonomy and accountability, over dependence,
and continuing lack of openness and opportunistic
behaviour (Huxham, 1996; Cox and Townsend, 1998).
As can be seen from the above review, SCM
demonstrates the key features of a ‘fifth generation
innovation’. It is the outcome of an evolutionary and
cumulative process, which started with other innova-
tions such as JIT and TQM. It is a multi-factor process,
which involves different functions, stakeholders and
variables, and a whole sequence of events. It is a
complex, dynamic and long process, which involves
actors from within and between organisations. SCM has
shifted the emphasis from internal structure to external
linkages and processes, and is dependent on the
interaction between the organisation and its external
environment, with strong feedback linkages and collec-
tive learning. Its success is associated with the challen-
ging and difficult development of a new culture based on
long-term and closer intra- and inter-organisational
relationships, mutual competitive advantage, shared
learning, greater transparency and trust.
4. Progress towards the adoption of SCM in construction
The objective of this section is to review the main
collaborative changes introduced in construction that
can be seen as contributing to the evolutionary and
cumulative process leading to the adoption of SCM.
This review, summarised in Fig. 1, is based on an
investigation of the main procurement approaches that
emerged in construction during the period between 1960
and 2000. This timeline is represented by the horizontal
axis. The vertical axis represents the type of relation-
ships between clients, consultants, contractors and
subcontractors in terms of the degree of collaboration
and integration. As can be seen, the traditional single-
stage approach to procurement, which was developed in
the early nineteenth century, continues to dominate the
approach of construction clients and their advisors to
procurement. This procurement method still accounts
for around 38.4% of construction work by value and
80.7% by numbers of contracts (Davis Langdon and
Everest, 2000). This approach is characterised by short-
term and adversarial relationships, deliberately frag-
mented processes, and tightly compartmentised func-
tions and roles.
A number of alternative procurement approaches and
forms of contract have emerged since the 1960s in
response to the changing needs of construction’s more
informed clients (Edum-Fotwe et al., 2001), and as a
growing realisation of the inherent problems of the
traditional route (Ball, 1988). These alternative procure-
ment routes, which include ‘two-stage competitive
175
tendering’, ‘Design and Build’, ‘Management Contract-
ing’ and ‘Construction Management’ represent some
differences in relationships, roles and power between the
design and cost consultants and main contractor, and
between the main or managing contractor and the
specialist and trade subcontractors. As can be seen in
Fig. 1, these new approaches to procurement have
resulted in some potential for greater collaboration
and integration. However, a number of authors remain
critical of construction’s attempts to reshape its procure-
ment approaches. Cox and Townsend (1998) argue that
there has been no theoretical framework underpinning
the development of these procurement approaches. This
suggests that construction lacks a systematic and
strategic approach to change which can be seen as
impeding the cumulative and evolutionary aspect of
SCM relationships—a key aspect of ‘fifth generation
innovation’’.
A further weakness associated with these procurement
approaches is that the culture of construction remains
essentially adversarial with continuing reliance on price
competition and firm contractual arrangements. Most
relationships are still largely arms-length and short-term
(Cox and Thompson, 1997; Dubois and Gadde, 2000),
with a strong tendency towards the use of litigation to
resolve disputes (Latham, 1994). Indeed in the case of
some new approaches to procurement, such as ‘Manage-
ment Contracting’, contractual relations have often
become even more complex than in the traditional
approach and provide further potential for conflict.
It was only with the emergence of project-specific
partnering in the late 1980s that there appears to have
been a significant move towards the more collaborative
relationships and integrated processes associated with
SCM. The Construction Task Force report (Egan, 1998,
p. 12) ‘Rethinking Construction’ defines partnering as
follows:
‘‘Partnering involves two or more organisations
working together to improve performance through
agreeing mutual objectives, deriving a way of
resolving any disputes and committing themselves
to continuous improvement, measuring progress and
sharing the gains’’.
The early ideas on partnering in construction revolved
around three key principles: agreeing mutual objectives;
making decisions openly and resolving problems in a
way that was jointly agreed at the beginning of the
project; and aiming to achieve measurable improve-
ments in performance through incentives. The progres-
sion towards the adoption of the principles associated
with SCM is more evident with the emergence in the late
1990s of the ‘second generation’ style of partnering
which includes a strategic decision to cooperate by the
key project partners (Bennett and Jayes, 1998). This
more developed form of partnering often places greater
176 M. Saad et al. / European Journal of Purchasing & Supply Management 8 (2002) 173–183

Fig. 1. Type of relationships in the construction industry.

emphasis on a more holistic approach based on a wider
range of performance criteria in addition to time, quality
and cost and acknowledges the strategic importance of
such longer-term business relationships. It also incorpo-
rates some of the key features of the ‘fifth generation
innovation’ such as developing stronger external lin-
kages and inter-organisational relationships throughout
the design and construction process. It is increasingly
being seen as a way to develop a culture based on
greater cooperation in longer-term and more stable
relationships (Barlow et al., 1997; Bresnen and Mar-
shall, 2000), and as a way of addressing the industry’s
fragmentation and lack of integration (Bennett and
Jayes, 1998).
However, partnering is still largely misunderstood
throughout much of the industry and is therefore not as
unified a concept as many of the other forms of
procuring facilities in construction (Cox and Thompson,
1997). There are a number of different perceptions of
partnering and, as in the case of earlier innovations in
procurement approaches, it appears to have evolved
rather than being a deliberate and systematic imple-
mentation of an innovation. In addition, it is often used
to describe the negotiation that takes place in other
 M. Saad et al. / European Journal of Purchasing & Supply Management 8 (2002) 173–183
forms of procurement, such as two-stage competitive
tendering, which again causes misunderstandings,
further devalues the concept and has engendered a
cynical view of it in much of the industry. Whilst
partnering has been used to considerable effect by
regular, frequent and more informed clients in more
routine and repetitive projects, its impact in the case of
infrequent clients and unique, one-off projects is clearly
more limited. Most partnering has, to date, focused on
developing collaboration in upstream relationships
between regular and frequent clients, consultants and
main contractors (Bresnen and Marshall, 2000; Edum-
Fotwe et al., 2001), with less involvement of organisa-
tions such as specialist and trade subcontractors down-
stream in the process (Jones and Saad, 1998). These
early experiences are revealing that there are also
considerable barriers to the implementation of partner-
ing. These barriers, such as lack of common purpose
and openness, hidden goals and opportunistic behaviour
have already been identified earlier in this paper as
impeding the adoption of SCM relationships. Thus,
partnering has not yet led to a widespread change of
culture needed for such a type of innovation. The
culture for much of construction remains essentially
adversarial, as demonstrated by the continued and
significant use of traditional procurement approaches
based on rigid contracts and competitive, fixed-price
tendering and the failure of a number of partnering
approaches. If much of construction is having significant
difficulties in implementing partnering, this raises
serious questions about its preparedness to adopt
SCM as ‘fifth generation innovation’.
5. SCM in construction
Despite the barriers to the implementation of
partnering in construction, parts of the industry have
started moving toward the adoption of SCM relation-
ships. This is being led by more informed private-sector
clients who were early adopters of partnering in the
early 1990s, as they attempt to both increase the degree
of collaboration that exists between their preferred
consultants and contractors and to extend this approach
downstream to include key subcontractors and suppli-
ers. Some public-sector clients are also leading the way
in building the purchaser-supplier relationships asso-
ciated with SCM. For instance, the Defence Estates, an
agency of the UK’s Ministry of Defence, is adopting
Prime Contracting which includes many of the key
elements of partnering, TQM and SCM. Its aim is to
promote collaboration through leadership, facilitation,
training and incentives, and replace short-term contrac-
tually driven project-by-project adversarial relationships
with long-term, multiple-project relationships based on
trust and co-operation. It includes the restructuring and
177
integration of project processes and supply networks
with fewer strategic supplier partners. These new
relationships incorporate continuous improvement tar-
gets to reduce costs, enhance quality, and focus on the
whole-life cost and functional performance of buildings
(Holti et al., 1999).
5.1. The survey
This section outlines a postal survey undertaken to
investigate the early adoption of SCM relationships in
construction. It also attempts to assess the industry’s
level of understanding of SCM and its degree of
preparedness for its successful adoption and implemen-
tation.
5.2. Methodology
The choice of the methodology was determined by the
need to capture the views of practitioners including
clients and their advisors, design consultants, main
contractors and specialist and trade subcontractors, on
the adoption of SCM.
A four-page questionnaire and accompanying letter
were sent to a sample of 800 construction organisations.
The questionnaire addressed the following issues related
to SCM:
* the key features;
* the benefits and problems;
* the project participants championing its introduction;
* the state of inter-organisational relationships includ-
ing the type, frequency of communication, and the
main issues at the interface between the organisations
involved;
* the choice of procurement method;
* the factors in the selection of partners;
* the measures to increase the effectiveness of SCM
and;
* the main sources of learning support.
Each section of the questionnaire contained a
composite question normally requiring between 10 and
12 responses and so provided over 140 inputs in total
from each individual respondent. For most of the
sections, those surveyed were invited to score their
responses using a Likert-style rating scale, with a score
of 5 indicating ‘very important’ or ‘very effective’ and a
score of 1 indicating ‘unimportant’ or ‘ineffective’.
Other sections required the ticking of boxes or the
stating of percentages.
5.3. Sample design
Given the large number and range of construction
firms in terms of size and type of work undertaken, and
178 M. Saad et al. / European Journal of Purchasing & Supply Management 8 (2002) 173–183

the constraints of time and resources, a probabilistic 5.4. Reliability

sample was considered to be too difficult to obtain and
therefore, impractical. A further complication is the
widening gap between organisations and projects in
terms of their approach to procurement and contracting
strategies, and the degree of collaboration in their
purchaser-supplier relationships. In order to manage
these difficulties, it was decided to restrict the size of the
overall sample by focusing on those firms that were
members of the organisations acknowledged as being at
the forefront of organisational innovation in the UK
construction industry. These included the Construction
Clients Forum, the Construction Productivity Network
and the Movement for Innovation. Stratified random
sampling was used to construct a non-probabilistic
sample from the members of these groups. This involved
dividing the population into a number of groups, in
which members shared a particular characteristic—in
this case their role within construction projects. Four
main groups were identified: clients and their advisors
design consultants, main contractors and specialist and
trade subcontractors.
The questionnaire was sent to 800 potential respon-
dents and the 118 replies were drawn from all parts of
the construction sector in the UK, and represented all
the main regions in the UK. The actual sample obtained
is shown in Table 1.
Table 1
Actual sample by type of organisation
The variables were checked for internal reliability and
consistency by calculating the Cronbach alphas/relia-
bility alphas for each measure. The responses to the
variables were divided into two groups and the
respondents’ answers across these groups were com-
pared and correlated.
For question one, Cronbach’s alpha for the nine
variables is 0.7342. For the second question, the figure
for the 13 variables is 0.7238. The Cronbach’s alpha for
the nine, twelve and thirteen variables of questions 3, 10
and 11, respectively, are 0.7101, 0.7684 and 0.8026, all of
which are above the value of 0.7 which indicates an
internally reliable set of variables (Nunnally, 1978).
5.5. Analysis of results
The analysis is structured around the following six
key features of SCM as a ‘fifth generation innovation’
which are:
* a multi-factor process;
* built around intra-and inter-organisational relation-
ships;
* requiring a strategic and long-term approach;
* dependent upon links with and support from the
external environment;
* necessitating continuous learning, and
* commitment from top management.

Type of organisation Percentage of 5.5.1. SCM: a multi-factor process

respondentsn In Section 1, the respondents were asked to use a
Client 13.5 Likert scale to rate the importance of the nine key
Architect 2.5 features of SCM. Almost two thirds of respondents
Engineer 5.9 (64%) gave a value greater than 2 for the importance of
Main Contractor 42.4
Specialist/Trade subcontractor 21.2
all nine variables. Over 80% of respondents believed at
Other 14.4 least five of the nine variables to be ‘important’ or ‘very
n
important’. As can be seen in Table 2, a majority of
Number of respondents=118.
respondents gave a value of four or five for all but one of

Table 2
Features associated with SCM

Variable number Variable description Number Mean value Percentage scoring

more than 3

V1 1 Linking processes by breaking down barriers 117 4.00 72.1

V1 2 Long term and stable relationships 118 4.48 92.4
V1 3 Reduction of the number of suppliers and customers 117 3.50 46.6
V1 4 Open exchange of data and information 118 3.90 76.2
V1 5 Earlier involvement 118 4.32 87.3
V1 6 Strong leadership in co-ordinating interfaces 116 3.78 63.6
V1 7 Clearer negotiation of common objectives 117 3.82 66.1
V1 8 Sharing learning and innovation 118 3.92 69.5
V1 9 Continuous improvement measured against clear targets 117 3.98 69.5

Cronbach’s alpha is 0.7342.

 M. Saad et al. / European Journal of Purchasing & Supply Management 8 (2002) 173–183 179

Table 3
The dependence of SCM on intra- and inter-organisational relationships

Variable Variable description Number of Mean Percentage scoring

number respondents value more than 3

V1 2 Long term and stable relationships 118 4.48 92.4

V1 3 Reduction of the number of suppliers and customers 117 3.50 46.6
V1 4 Open exchange of data and information 118 3.90 76.2
V1 5 Earlier involvement 118 4.32 87.3
V1 7 Clearer negotiation of common objectives 117 3.82 66.1
V1 8 Sharing learning and innovation 118 3.92 69.5
V2 9 Greater trust in relationships 116 4.22 78.8

Cronbach alpha=0.6882.

the variables in question 1. This suggests that most Table 4

respondents perceive SCM as a multi-factor process. Variable names and numbers used in correlation analysis

Variable Variable name: type Number of Average

5.5.2. SCM built around intra- and inter-organisational number of relationship respondents percentage
relationships given
The variables listed in Table 3 have been grouped V5 1a Adversarial (with 108 12
together as they relate to aspects of relationships within suppliers)
and between organisations. V5 1b Adversarial (with 105 11
customers)
Over 70% of respondents believed at least five of the V5 2a Arms length (with 109 26
seven variables relating to intra- and inter-organisa- suppliers)
tional relationships to be ‘important’ or ‘very important’ V5 2b Arms length (with 105 17
to SCM. However, only 21.2% of respondents gave customers)
values of over 3 for importance across all seven variables V5 3a Close and co- 109 42
operative (with
relating to relationships. This indicates that SCM is seen
suppliers)
by the respondents as being linked to the establishment V5 3b Close and co- 106 48
of intra- as well as inter- organisational relationships, operative (with
with over 92% of the respondents believing that ‘long customers)
term and stable relationships’ are ‘important’ or ‘very V5 4a Short (with 108 22
suppliers)
important’ features of SCM. However, the four vari-
V5 4b Short (with 105 25
ables receiving the lowest mean scores (reduction of the customers)
number of suppliers and customers; clearer negotiation V5 5a Long term (with 109 44
of common objectives; open exchange of data and suppliers)
information; and sharing of learning and innovation) V5 5b Long term (with 106 43
customers)
can be interpreted as a reluctance to rationalize supplier
V9 4 Strategic partnering 113 9
and customer bases, restructure supply chains and to V9 5 Prime Contracting 113 2
fully embrace the culture needed for an effective
implementation of SCM relationships.

5.5.3. SCM requiring a strategic and long-term approach
A Spearman’s Rho correlation analysis was also
carried out on the variables used in question 5 of the
survey—‘What proportion of the following relationships
do you have with your suppliers and customers?’, and
two variables in question 9—‘What proportion of your
work is undertaken in the following procurement
systems?’ This was carried out to ascertain whether
respondents were taking a strategic and long-term
approach by developing longer-term relationships with
the same partners (see Tables 4 and 5).
The type of relationships that a firm has with its
customer has significant correlations with those it has
with its suppliers. This would imply that the type of
relationships a firm has with its suppliers mirrors that
which it has with its customers, albeit adversarial, co-
operative, close, short or long term. There are also
correlations between relationships which are short in
nature and those which are arms length. Adversarial
relationships are also correlated positively to both arms-
length and short relationships. This confirms the
findings of the review of procurement in Section 4 of
this paper, which also suggests that relationships in
construction are mainly short-term and adversarial.
However, Table 4 shows that over 40% of respon-
dents consider their relationships with both suppliers
and customers to be close, co-operative and long
term. A further investigation of Table 4 indicates that
only 9% of respondents are involved in strategic
partnering and 2% in Prime Contracting which are the
180 M. Saad et al. / European Journal of Purchasing & Supply Management 8 (2002) 173–183

Table 5
Spearman’s Rho Correlations

Figures in bold: correlation is significant at the 0.01 level (two tailed).

Figures in italics: correlation is significant at the 0.05 level (two tailed) (where n=number).
Figures underlined are significance (two tailed).

only procurement approaches allowing formal and long- 5.5.4. Significant links between SCM and support from
term relationships. This may suggest a lack of clear the external environment
understanding of the type of relationships associated Table 6 shows no significant link between the
with SCM. adoption of SCM and support from the external
 M. Saad et al. / European Journal of Purchasing & Supply Management 8 (2002) 173–183 181

Table 6
External support

Variable number Variable name Number Mean valuen Percentage scoring less Percentage scoring
than 3 more than 3

V11 9 From trade associations 98 2.28 59 15

V11 10 Business links 101 2.50 50 20
V11 11 Regional Supply Office 94 1.74 73 6
V11 12 Training and Enterprise 93 1.66 78 5
Council
V11 13 Local authorities 93 1.71 73 8
n
Values given on a five point Likert scale (a score of 5 indicating very effective).
Cronbach analysis=0.8002.

Table 7
The role played by learning in SCM

Variable number Variable name Number Mean valuen Percentage scoring less Percentage scoring
than 3 more than 3

V1 8 Sharing learning and 118 3.92 5.93 69.49

innovation
V11 3 External consultant 98 2.07 69.39 8.16
V11 4 Universities 95 1.96 71.58 6.32
V11 5 Exchange of staff 96 2.04 65.63 6.25
V11 6 In-house training 106 3.47 17.92 51.89
V11 7 Attending external 106 3.33 18.87 48.11
workshops
n
Values given on a five point Likert scale (a score of 5 indicating very effective, for V1 8 a score of 5 indicates very important).
Cronbach alpha=0.6260.

environment. On responding to the question ‘How is Table 8

your company/supply chain increasing the effectiveness The champions for the introduction of SCM into construction
of SCM?’ the majority believes that the external actors Type of champion Percentagen
are either ‘ineffective’ or ‘very ineffective’. This can be
Private client 62.71
interpreted either as a lack of awareness about the need Public client 62.71
for external support required for the development of Client’s project manager 27.12
such a complex innovation or the inadequacy of the Architect 7.63
external support available (Table 7). Engineer 6.78
Quantity surveyor 8.47
Main contractor 70.34
Specialist/trade subcontractor 26.27
Supplier 20.34
5.5.5. Continuous learning Others 9.32
Nearly 70% believe that sharing learning and n
Number of respondents=118.
innovation is either an ‘important’ or a ‘very important’
feature of SCM. However, when asked about forms of
learning, only ‘in-house training’ and ‘external work-
shops’ were considered ‘effective’ or ‘very effective’ ways 5.5.6. Champions of SCM
of increasing SCM effectiveness through learning. The The respondents consider the main champions of
two main types of learning mechanisms identified by the SCM to be clients (both public and private) and main
respondents can be seen as appropriate for awareness contractors (see Table 8). Other notable champions
raising but not sufficient to generate the shared learning (who all ‘polled’ less than 30% of respondents) are the
required for an effective implementation of SCM. It can client’s project manager, specialist trade subcontractor
also be argued that most construction in-house training and suppliers. When the client’s project manager is
may not be appropriate to address the complexity of considered as a ‘client’, the percentage that chose at least
such an innovation (Table 7). one of the three variables rises to over 87%. [43% of the
182 M. Saad et al. / European Journal of Purchasing & Supply Management 8 (2002) 173–183
Table 9
Importance of championing SCM (in percentages)
Categories
Very unimportant
Unimportant
Neither unimportant nor important
Important
Very important
n
From a sample of 107.
Table 10
The importance of the ability to champion SCM when selecting
partners (in percentage)
Categories
Very unimportant
Unimportant
Neither important nor unimportant
Important
Very important
n upstream and essentially between clients, consultants
From a sample of 111.
sample chose two of these three actors whilst 11% chose
all three as SCM drivers]. This would reinforce the view
that the respondents consider clients in general to be the
most significant champions of SCM.
Although 44% of the respondents considered the
championing of SCM in construction as either ‘im-
portant’ or ‘very important’, nearly 64% of the
respondents, when choosing a partner, fail to consider
the ability to champion SCM as ‘ important’ (Tables 9
and 10). This may again indicate a lack of understanding
of the scope of such an innovation and the need for
effective championing of change if SCM is to be
cascaded down the supply chain.
6. Conclusion
This paper has shown that there is significant
awareness of the importance of SCM and its main
benefits in construction. It is seen as a multi-factor
innovation, which can help construction overcome its
fragmentation and adversarial culture, improve its
relationships and better integrate its processes. Its
effective implementation is also perceived as dependent
upon continuous and shared learning and strong
commitment from key partners such as clients.
However, the literature review and the results of the
survey have identified some inconsistencies that raise
the two following fundamental issues related to the
effective implementation of SCM as a ‘fifth generation
innovation’:
(i) the degree of preparedness of the industry in
effectively adopting SCM and,
Percentagesn (ii) the understanding of this concept and the pre-
requisites associated with its successful implementa-
9.35
11.21 tion.
35.51
28.97
14.95 This paper has demonstrated that construction is
moving to the adoption of SCM without having
benefited from earlier innovations, such as JIT and
TQM. It is only, relatively recently, with the emergence
of partnering that the industry has started moving
towards the more collaborative relationships and
integrated processes that can be interpreted as laying
the foundations for successful SCM. Even where
Percentagesn
partnering has been adopted, it is largely misunderstood
and has not yet led to a widespread change of culture in
8.1 construction, which remains essentially adversarial with
16.2
arms-length relationships and a significant use of price-
39.6
23.4 competitive procurement approaches and rigid con-
12.6 tracts. In addition, partnering is mainly being adopted
and main contractors and has yet to be extended to
those parts of the supply chains downstream of the main
contractor.
Although the practitioners surveyed scored long-term
and close relationships as being an important factor in
the adoption of SCM, most respondents showed some
inconsistencies by indicating their unwillingness to
rationalise their supplier and customer bases, establish
a clear common purpose, exchange information openly
and share learning. This can be interpreted as a further
indication of their reluctance to embrace a new culture
associated with SCM relationships.
The survey also indicates an additional inconsistency
in that although learning is perceived as important, the
type of learning being undertaken does not match the
competencies and the cultural changes needed for such a
complex, multi-factor and dynamic innovation.
The results of the survey confirm the role of clients
and their advisors in leading and championing change in
construction. They also view the role of the champion as
important but again reveal some inconsistencies in their
understanding of SCM by not scoring it as a significant
factor in partner selection.
A further indication of the limited understanding of
the scope and complexity of this type of innovation is
demonstrated by the low importance attached by the
respondents to external support. There was limited
formal and planned interaction with the external
environment until the formation of the Construction
Industry Board following the publication of the
government-sponsored Latham Report in 1994. How-
ever, this interaction with the external environment has
intensified since the publication of the Egan Report in
1998 through, for example, the work of the Movement
 M. Saad et al. / European Journal of Purchasing & Supply Management 8 (2002) 173–183
for Innovation and the Construction Best Practice
Programme.
This paper has demonstrated a number of weaknesses
in the progress of construction towards the adoption of
SCM relationships when evaluated against the key
features of ‘fifth generation innovation’. Both the
literature review and the results of the survey suggest
that much of the industry have yet to acquire a thorough
understanding of this type of innovation, and the key
pre-requisites for its successful implementation.
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