Industry wastes 3bn a year through poor logistics

The construction industry loses more than £3bn a year because of poor logistical planning, a report released today has revealed.

The Construction Products Association’s Improving Construction Logistics, which is published by the Strategic Forum, claims that:

• Site workers waste 10% of the day waiting for or collecting materials.
• Poor logistical planning is a cause of low-quality buildings, health and safety lapses and the industry’s negative public image.

In the introduction to the report, Peter Rogers, the chairman of the Strategic Forum, criticises the industry’s lack of logistical awareness and says financial losses would be cut if designers, contractors and suppliers liaised better.

He said: “Construction has been slower than other industries to realise the benefits that good logistics can provide. To quote that much overused phrase, ‘It’s not rocket science’.”

The report singles out ineffective construction managers, saying their inability to do the job efficiently wastes money, and often means that logistics specialists have to be brought in to sort things out. Manufacturers and suppliers are also criticised for failing to explain how big a role distribution plays in pricing policy.

The report calls for main contractors, which are responsible for site operations, to draw up a logistics plan in consultation with their supply chain at the start of each project.

Construction has been slower to realise the benefits that good logistics can bring

Strategic Forum chairman Peter Rogers

It is also proposed that QSs prepare a bill of materials as part of the logistics plan. This would assess the flow of materials on a project and minimise the need for stockholding. It is estimated that if logistics were improved the output of the construction industry could rise 4%.

The report says the industry finds it hard to tackle these problems because projects are not designed far enough in advance, and that there is a lack of transparency in costings and a lack of incentive to improve matters because it is difficult to identify who benefits.

The report focuses on four areas where logistical improvements could boost performance: design, transport, stockholding and the efficient use of on-site labour.

It holds up Bovis Lend Lease’s Mid-City Place development in London as a case study of best practice. There, the contractor had a strategy to reduce multi-handling and the repeated moving of materials, and the scheme was completed 11 weeks ahead of schedule and completed 675,000 man hours without a reportable accident.

Constructing Excellence will co-ordinate the follow-up action plan and report next spring.