Akmonlink College

MBA Program
Individual Assignment on Article Review for the Partial Fulfilment of the course
Operations Management
All students are required to collectively select one article from a reputable and peer-reviewed journal on
the course contents of Operations management (Operations Strategies, Product and Service Design,
Location Decision, Quality control, supply chain management and aggregate planning); submit a
maximum of 5-pages report for the review. As part of exclusion and exclusion criteria, the article is
supposed to be based on primary study. The review should include:
A. Description of the Study
 What was the purpose of the research?
 Why is the research being conducted & why is it considered significant?
 Were the research questions, objectives or hypothesis (es) clearly stated?
B. Literature Evaluation
 Does the literature review seem thorough & recent (within the last 5 years)?
 Does the content of the literature review relate directly to the research problem?
C. Conceptual Framework
 Does the research use a theoretical and/or conceptual model?
 Does the model guides the research and seem appropriate?
D. Sample
 Who were the subjects?
 Were the inclusion/exclusion criteria specified?
 How representative is the sample?
 was there any selection bias evident in the sample selection?
E. Method and Design
 Describe the study design – is it appropriate?
 How was the research conducted? (The study procedure itself) & data collected
 Were the subject’s rights protected?
F. Analysis
 How were the data analyzed?
 Do the selected statistical tests appear appropriate?
 Were the results significant?
G. Results
 What were the findings of the study?
 Are the results presented in a clear and understandable way?
 How did the authors interpret the results?
 Were there any study limitations discussed?
H. Subject matter significance
 What were the implications of this study to practitioners? 2
 How does the study contribute to the body of knowledge?
 Could the study be replicated?
 What additional questions does the study raise?
What is Procurement Strategy in Construction?
20th Sep, 2019
Thought Leadership
Procurement is the acquisition of the materials, supplies or services needed to successfully operate a
business or complete a project. In construction, this refers to the goods and services needed to
successfully complete a build from start to finish. So, what is procurement strategy in construction?
Procurement needs to be approached in a strategic way for a construction company to maximise their
efficiency on each project.

A construction firm must take a carefully planned approach to procurement by purchasing the supplies
required in the most cost-effective way. The procurement strategy needs to take multiple factors into
consideration, like the timeline, budget and quality of the project.

Routes to Strategic Procurement

There are several different routes a company can take when it comes to strategic procurement in the
construction sector. When selecting a route, the long-term objectives of the client’s business plan must be
carefully considered. Key factors that will influence procurement include:

Speed
Cost
Quality
Risks and opportunities
Budget and financing
Specific constraints on the project
Some of the most commonly used procurement routes include the following:

Traditional Contract

The traditional procurement route is also sometimes known as design-bid-build. This is a single-stage
project where a consultant works to develop the design in partnership with the client. After this, a
contractor will be appointed under a lump-sum construction contract. In this case, the contractor may
have no responsibility for any of the design, with the exception of temporary works.

Design and Build

The design and build procurement route starts with the appointment of a main contractor to design and
construct the works. In this way, it gives the client a single point of responsibility for delivering the
project.

A design and build project may follow either a single-stage or two-stage tender process.

Single-stage tender: The typical route for procuring in the construction industry, where the contractor
submits a tender return with a fixed lump-sum cost. This means the complete contract can be awarded
based on tenders received.
Two-stage tender: This route is used to allow for early appointment of a contractor, before all the
information needed to calculate a fixed price is complete. During the first stage the contractor usually
submits their programme, preliminaries, project team and overheads & profit. The selected contractor is
then appointed under a pre-construction services agreement to work for the client under a consultancy
basis. During the second stage a fixed price will be negotiated for the project works.
Management Contract

In the case of a management contract, the works will be constructed by a number of different contractors,
all of whom are hired and managed by a management contractor; who is usually appointed on the basis of
a fixed fee which will usually be paid a fee in the form of a percentage.

Construction Management

The process for construction management is largely similar to that of Management Contracting with the
exception that within this route the Client is not in direct contractual relationships with the trade
contractors as it is with the former. They appoint a management team and a construction manager on a fee
basis which can be obtained in competition.

Private Finance Initiative (PFI)

A single contractor will be appointed to build, design and operate the project, in order to deliver services
demanded by the public sector. This contractor will have expertise in design, construction, facilities
management and funding capability. The contractor will finance the project and lease it to the client for
an agreed period. After this, the development will revert to the client.

For professional, industry-leading advice on the best procurement strategy for your next project, speak to
an expert at TowerEight.
4 Major Types of Sourcing Strategies in the Construction Industry
Kait Ries
October 14, 2020
The construction industry encompasses many unique challenges, particularly in sourcing materials for
their complex projects. From building a single custom home to being responsible for an extensive housing
development or a towering skyscraper, much of the success (and the profitability) of a construction
project rests on the shoulders of the team responsible for sourcing the materials for its projects.

Typical factors that other industries have to deal with come into play, such as the suppliers, cost, quality,
and availability of raw (building) materials. But construction can be far more complex because of many
other variables unique to the construction industry, including weather, the condition of the building site,
and the availability of skilled trades. Also, many construction projects involve multiple parties. Some are
stakeholders, some will be contracted for specific stages of the project, and some may be partners.

With so many possible variations in scale and approach, not every construction project uses the same
sourcing strategy. Here are four of the most common.

Traditional Sourcing Practices

When the contractor for a construction project is responsible solely for the building component of the
project, traditional sourcing practices are often used. Under this model, the design and major decisions are
made by an engineering or consulting firm that runs the overall project. The contractor is responsible for
sourcing any required labor, materials, and heavy equipment rentals—but they do so under cost limits and
timelines set by the firm that is running the project.

Management Contracting
A construction project that can be broken down into defined components frequently employs a
management contracting approach to sourcing. With management contracting, there is essentially an
additional layer added to the organization. The client and an engineer or consultant are still there, but the
project general contractor takes on responsibility for managing the overall project. Subcontractors or
specialized contractors are hired to undertake the various components of the build, reporting up to the
general contractor.

Naturally, this approach also adds to the complexity of sourcing. Among the major challenges is
undertaking sourcing for the project when one party is responsible for build and delivery, while another is
responsible for the financial aspects.
Design and Build
Many home buyers hire a contractor who is responsible for both designing and building their home or
building. A consultant is often brought in to oversee and manage the contract terms. But, the contractor is
responsible for all aspects of the design and construction of the project—within the limits of the budget
and timeline set out in the contract.

This is where a design and build approach to sourcing is typically employed. The contractor, the client,
and the consultant will need to collaborate closely. The contractor will carry the risk of the project, so
they will want to make sure they have a firm grasp of material, services, and subcontracting costs. Any
cost over-runs are usually the responsibility of the contractor, making their sourcing team even more
critical to the profitability of the project.

Working As Partners Or a Joint Venture

Collaboration is a valuable approach in the construction industry. Companies that work together on a
successful project may decide to expend that relationship, working in partnership or on joint ventures
going forward.

This approach requires a considerable adjustment to the sourcing process for all the companies involved.
Which procurement department is responsible for which aspects of which projects? One department
might have a superior relationship with a supplier, which would make it advantageous for them to be
responsible for that aspect of sourcing.. Collaboration plays a key role for procurement teams to keep
costs down, quality high, and projects on time.

Bid Ops Supports All Construction Industry Sourcing Strategies

When you look at the four most common sourcing strategies used by the construction industry, a few
things jump out.

First, we see the procurement team for a construction project tracking a lot of variables that can change
rapidly. Many of these factors are subject to outside forces, such as bad weather. There’s no better
example of this variability than what’s happened to the price and availability of lumber during the
coronavirus pandemic. Lumber mills were shut down during pandemic lockdowns; then, many
homeowners decided to embark on home renovation projects. As a result, lumber has been in short supply
nationwide. According to Market Watch, the price of lumber has also increased by up to 60%.

The procurement departments at construction companies have been scrambling to source the lumber
needed for projects. Supplier relationships and the ability to negotiate deals quickly are critical to avoid
having a project held up because of a lack of material.
Perhaps the bigger takeaway from the different construction industry sourcing strategies is the importance
of collaboration and transparency. In most cases, procurement departments don’t work alone; they work
in tandem with the sourcing team at other companies involved in a project. If the procurement teams
don’t work together, they miss out on opportunities like volume discounts.

Strategic Sourcing Software for the Construction Industry

Bid Ops is strategic sourcing software that’s ideal for the construction industry, no matter what sourcing
approach is chosen.

Bid Ops is a centralized, up to date supplier database with the ability to manage the full supplier
relationship using messaging, tasks, reminders and file sharing. Providing visibility to enable your
organization to make true apples-to-apples comparisons and award decisions to get better quotes faster.

In addition to the design and features that support companies that are collaborating or partnering on
projects, Bid Ops saves money. The AI-powered software supports advanced features like automated
processes to reduce staff time spent on repetitive tasks. Artificial Intelligence also means Bid Ops offers a
key competitive advantage: intelligent first offers that allow sourcing teams to award contracts faster than
competing negotiators, and with better pricing outcomes.

If your organization is in the construction industry, your sourcing team will be far more efficient,
effective, and engaged using Bid Ops. Whether building single homes, towers, or housing developments,
schedule a demo to see how Bid Ops can take the stress off the shoulders of your team.