Logistics Strategy for Building Contractors : CONTEXT, CONTENT, AND PROCESS

Abstract: A logistics strategy is at the foundation of how a company manages the flow of resources in the supply chain. It ensures that the logistics function of a company contributes to fulfilling strategic goals. In the project-based building construction industry, logistics is a means of supporting building operations by ensuring that resource flows are managed efficiently in the supply chain and at the construction site. However, 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 favour “one size fits all” solutions. These approaches to construction logistics are problematic because building contractors target different market segments through their type of products, production methods, and supply chains. Therefore, there is not a “one best way” of managing logistics in building construction. This thesis focuses on how a building contractor can adopt a more strategic and long-term approach to logistics. Strategy is typically regarded in terms of 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. The purpose of this licentiate thesis is therefore to investigate the fit between logistics strategy context and content for building contractors.To fulfil the purpose, the following two research questions are answered: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?To answer the research questions, a combination of conceptual and empirical research methods has been used. The conceptual part comprises a literature review that was used to derive constructs to develop 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 further develop 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 important to facilitate logistics’ role as a support function for a cost/delivery or flexibility-oriented competitive strategy. However, 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 comprises between 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 that there are trade-offs in selecting a logistics strategy that supports a cost/delivery or flexibility-oriented strategy. These trade-offs emerge as a consequence of different degrees of pre-engineering, type of production systems, and supply chain structures employed by building contractors, which building contractors needs to address during logistics strategy formulation. A logistics strategy profiling template was developed, which is 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 that takes responsibility for strategic logistics decisions, regardless of their logistics strategy context.