Abstract: Customer satisfaction and continuous improvement are the fundamental goals of construction logistics. While much research has been focusing on exploring the relationship between the contractors and the ultimate customers, known as the owner, to improve the understanding of the significance of customer satisfaction, the need to examine the relationship between material suppliers and contractors is highly in demand. The purpose of this study is to extend the framework for construction material logistics in customer satisfaction from owner to project manager level.
This paper examines how construction logistics affect a project manager’s level of satisfaction. A survey established the general importance that a project manager must place on the construction logistics. Accordingly, the most significantly correlated factors in customer satisfaction were obtained from a project manager’s point of view. Two hundred twenty-three experienced project managers provided valuable data to the study. Five important factors related to satisfaction were found through interviews with project managers and a literature review.
These included personnel, material flow, schedule adherence, contractor’s organization, and information flow. The study results suggest that material flow and information flow are worthy of the most attention. Satisfying the above factors will greatly improve the construction logistics that will, as a result, immensely increase the project manager’s level of satisfaction. Key words: construction logistics, customer satisfaction, project manager, survey. Resume : La satisfaction de la clientele et l’amelioration continue sont les objectifs fondamentaux de la logistique en construction.
Bien que beaucoup de recherche cible la relation entre les entrepreneurs et le client en bout de ligne, ou proprietaires, afin d’ameliorer la comprehension de l’importance de la satisfaction des clients, le besoin d’examiner la relation entre les fournisseurs de materiaux et les entrepreneurs est grandement en demande. Le but de la presente etude est d’elargir le cadre de la logistique aux materiaux de construction pour englober la satisfaction des clients du niveau du proprietaire jusqu’au gestionnaire de projet.
Le present article examine comment la logistique en construction peut affecter le niveau de satisfaction d’un gestionnaire de projet. Un sondage a etabli l’importance generale qu’un gestionnaire de projet doit accorder a la logistique en construction. De meme, on a correle les facteurs les plus significatifs a la satisfaction des clients, selon le gestionnaire de projet. Deux cent vingt-trois gestionnaires experimentes ont fourni des donnes precieuses a l’etude. Cinq facteurs importants relies a la satisfaction ont ete decouverts durant les entrevues avec les gestionnaires de projet et dans une revue de la litterature.
Ce sont le personnel, l’acheminement des materiaux, le respect de l’echeancier, l’organisation de l’entrepreneur et la circulation de l’information. Les resultats de l’etude suggerent que l’acheminement des materiaux et la circulation de l’information meritent le plus d’attention. En repondant aux facteurs enumeres plus haut, la logistique en construction sera grandement amelioree ce qui, en retour, augmentera grandement le niveau de satisfaction des gestionnaires de projet. Mots cles : logistique en construction, satisfaction des clients, gestionnaire de projet, sondage.
[Traduit par la Redaction] Jang et al. 1142 Introduction Logistics is the part of the supply chain process that plans, implements, and controls the efficient flow of goods, services, and related information to fulfill customers’ requirements (CLM 1999). Efficient management of construction material planning tasks requires an integrated approach toward various logistical functions. In particular, the funda- mental construction operations of facilities, inventory control, and communication planning need to be closely coordinated.
Thus, the role of the project manager (PM) who executes these operations with all parties in a contract is very important to the successful completion of a construction project. Overall understanding and proper planning of the project are factors necessary to optimize satisfaction of both the construction company and the customer. Received 27 February 2003. Revision accepted 24 July 2003. Published on the NRC Research Press Web site at http://cjce. nrc. ca on 18 December 2003. H. Jang,1 J. S. Russell, and J. S. Yi.
Department of Civil and Environmental Engineering, The University of Wisconsin-Madison, 2320 Engineering Hall, 1415 Enineering Drive, Madison, WI 53706, U. S. A. Written discussion of this article is welcomed and will be received by the Editor until 30 April 2004. 1 Corresponding author (e-mail: [email protected] com). Can. J. Civ. Eng. 30: 1133–1142 (2003) I:\cjce\cjce3006\L03-068. vp December 11, 2003 2:13:52 PM doi: 10. 1139/L03-068 © 2003 NRC Canada Color profile: Disabled Composite Default screen 1134 Can. J. Civ. Eng.
Vol. 30, 2003 Fig. 1. Construction logistics tasks. A senior-level manager briefs the PM on the project, so that the PM can have full understanding of where the project fits in the general scheme of things in the parent organization and its priority related to other projects on the system and to the routine work of the organization. The PM must also get to know the client to ensure that the proper facilities and any supplies required in the beginning of project process are available when needed and also take care of the routine
details required to begin the project (Meredith and Mantel 1995). Literature review While customer satisfaction studies have not been undertaken in the construction industry, the housing industry has conducted such studies. Traditional construction management studies of housing refurbishment (Holm and Brochner 1999) and home buyers (Torbica and Stroh 1999), have focused on the relationship between the customer and the contractor. However, most of these studies have been undertaken to characterize the relationship between the customer
(owner) and the construction companies. Compared with the notable scarcity of investigations concerning customer satisfaction in the field of construction, a rapidly growing number of studies in the service industries have been published over the past few years. The results of the studies demonstrate strong correlation between customer satisfaction, or service quality, and economic returns (Holm 2000). Logistics management and total quality management (TQM), in general, appear to have many characteristics in common with operational service expectations.
To establish the positive correlation of logistics tasks and customer satisfaction, operational service management is reviewed in this paper in an attempt to identify principles with potential application to construction logistics. The goal of this investigation is to provide practical suggestions for the logistics by gathering information based on previous reviews of construction material logistics research. Construction logistics Logistics management research can be classified into three broad perspectives: (i) competitive strategy, (ii) firmfocused tactics, and (iii) operational efficiencies.
Competitive strategy issues have a long-term impact on the firm. Firms that focus upon tactical issues operate in a shorter time frame. Operational efficiencies involve day-to-day deci- sions that can be altered quickly (Ganeshan et al. 1999). The construction industry is greatly concerned with aspects of daily operations, which are typically operational decisions, reflecting day-to-day operations up to 2 weeks ahead. The construction industry attempts to optimize daily operations of facilities through careful planning, organizing, directing, and controlling activities before and during the construction.
In terms of construction logistics, multidisciplinary processes are categorized as follows: (i) material supply, storage, processing and handling; (ii) manpower supply; (iii) schedule control; (iv) site infrastructure and equipment location; (v) site material flow management on a job site; and (vi) management of information related to all physical and services flows. Although implementation and operational service management are significant aspects of construction logistics that affect day-to-day operations, one must keep in mind that logistics is rooted in senior-level decision making.
Logistics functions In general, logistics functions in a construction firm can be divided into supply logistics and site logistics. Figure 1 illustrates the construction logistics tasks. Supply logistics are related to activities in the production process that are cyclic. These activities include specification of supply resources (materials, equipment, and personpower), supply planning, acquisition of resources, transport to a site and delivery, and storage control. Site logistics are related to physical flow, namely, planning, organizing, directing, and controlling on-site processes.
The management of handling systems, safety equipment, site layout, defining activity sequence, and resolving conflicts among various production teams related to the on-site activities are all part of site logistics (Fred and Francisco 1999). The most appropriate system to describe the material logistic tasks is developed at hierarchical levels at the point of interaction between internal and external systems. It should always be kept in mind that the main objective of a logistics process is to meet the customer’s requirements.
Juran’s triple role and construction logistics process Every party in a process plays three roles: supplier, processor, and customer. Juran (1988) defines this interchanging role as the “triple role” concept. These three roles are carried out at every level of the construction process — corporate, © 2003 NRC Canada I:\cjce\cjce3006\L03-068. vp December 11, 2003 2:13:59 PM Color profile: Disabled Composite Default screen Jang et al. 1135 Fig. 2. Juran’s triple role and construction logistics process. division, department, and individual.
This triple role concept is illustrated by the right-hand side of Fig. 2. The owner is a customer of the designer. Using the designer, the owner processes the design and supplies plans and specifications to the constructor. In this process, the constructor becomes the customer of the designer, who uses the designer’s plans and specifications, processes the construction, and supplies the completed facility to the owner. Traditionally, the roles of the three parties have not been viewed this way, but this assists in demonstrating that construction is a process.
Moreover, the logistics principles that have been applied to the processes of other industries are potentially applicable to the construction industry. Customer service area As shown in Fig. 2, the construction logistics process can be divided into internal and external components. An external logistics component covers the relation between a constructor and his(her) suppliers, whereas an internal logistics component deals with the relationships among various parties involved in the project, namely, constructor, designer, and owner (Jones and Riley 1985).
Generally, traditional studies have approached customer service areas based on the relationship between constructors and their final clients. However, this paper focuses on the customer service area between the external logistics and internal logistics. Service level is determined by the constructor’s capacity to provide resources to internal agents on a site at the right time and at the right place while satisfying the correct specifications. Figure 2 illustrates the changing relationship between customers and suppliers in terms of service level.
A constructor can play the role of a customer in its relationship with a ma- terial supplier, while it can also play the role of a supplier in its relationship with an owner. The customer service area that this paper focuses on is represented in Fig. 2. The issues of customer satisfaction and service quality generally dominate theories of customer service management. If we consider the whole body of research in the field of service management, it is a fundamental and recurring observation that higher customer satisfaction leads to better economic returns. This can be explained by key concepts
such as customer reliability and a positive reputation for the firm. Customer satisfaction The function of the construction industry is to provide customers with facilities that meet their needs and expectations. One principle of logistics is a management philosophy that effectively determines the needs of the customer. Ensuring operational quality at each stage in the construction process should ensure that the quality of the final product will satisfy the final customer. How to achieve customer satisfaction There is no general consensus on the relationship between
logistics and customer satisfaction, but the thrust of logistics research has been focused in the area of operations service management (Ganeshan et al. 1999). Parasuraman et al. (1994) have proposed a model suggesting that the customers’ overall satisfaction in a transaction results from a combination of operation service quality, product quality, and pricing. Other researchers also adhere to the idea that service quality leads to customer satisfaction (e. g. , Woodside et al. © 2003 NRC Canada I:\cjce\cjce3006\L03-068. vp December 11, 2003 2:14:19 PM Color profile: Disabled
Composite Default screen 1136 Can. J. Civ. Eng. Vol. 30, 2003 Fig. 3. Characteristics of the respondents. 1989; Reidenbach and Sandifer-Smallwook 1990; and Adersson et al. 1994). Furthermore, Cronin and Taylor (1992) state that an antecedent of consumer satisfaction is operation service quality. Survey summary The survey instrument consisted of 43 questions and addressed many facets of logistics processes and customer satisfaction, such as personnel, material flow, schedule adherence, characterization of contractor’s organization, and information flow.
Most respondents completed the survey by mail, although several faxed or e-mailed their responses. The survey was distributed on 31 October 2001. A total of 1080 surveys were distributed to various construction companies in the United States, including design and (or) engineering firms, general contractors, mechanical and (or) electrical firms, heavy construction firms, and construction management firms. Respondents were senior-level managers with titles, such as owner–president, vice president, PM, project engineer, or superintendent.
A total of 223 surveys from 180 different organizations were returned (returned rate = 21%). Figure 3 shows the characteristics of the respondents. Respondent firms consisted of general construction, construction management, heavy construction, and mechanical and electrical construction. The majority of respondents worked for general construction and construction management firms. Measurement of customer satisfaction Surveys indicate that material costs amount to approximately 39% of the overall project cost.
This demonstrates the importance of the material logistics tasks and shows that they comprise a large segment of the construction industry. A survey was conducted to reconfirm the importance of the material logistics tasks. Two hundred twenty-three project managers in the United States provided valuable data to this study by participating in the survey. The survey consists of four main topics: (i) relationship between construction logistics and satisfaction of the PMs, (ii) variation in each satisfaction variable, (iii) measurement of project process, and (4) measurement performance management.
The first two parts, logistics and satisfaction section, used a questionnaire survey to collect customer satisfaction data on material operational logistics in the construction industry. The results of this study indicate the areas that require most attention to increase satisfaction level of PMs. Exhaustive logistics literature reviews and interviews were conducted to gain a better understanding of the relationship between logistics and customer satisfaction and to determine which aspect of logistics has the greatest impact on customer satisfaction.
The study included a project process questionnaire to define the manner in which the contract and building process is carried out. This section includes satisfaction with scope of work, financial planning, requirement procedures, and submittal methods. The performance survey played an important role in determining the opinions of the respondents and visions for success of the construction material logistics tasks. The survey also examined the concentration of managers on short-term costs versus long-term benefits.