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Identifying, Analyzing And Evaluating the Impact of Quality of Supply Chain in

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 Sustainable Economic Development and Advancing Education Excellence in the era of Global Pandemic

Identifying, Analyzing And Evaluating the Impact of Quality of Supply Chain

in Construction Sector Using Lean Six Sigma Methodology
Suhaila Ali Abdula

MS QBE, Abu Dhabi School of Management, Abu Dhabi, UAE

Suhaila-ali@hotmail.com

Dr. Muhammad Usman

Abu Dhabi School of Management, Abu Dhabi, UAE

usmankazi100@gmail.com, m.tariq@adsm.ac.ae

Abstract

The construction sector is highly prone to non-value additional activities and uncertainty regarding a disturbance in
labor and material on site. These factors make projects prone to overruns and humongous costs. Being the hub of
massive construction projects, UAE is a popular tourist attraction and an investor's eye candy. However, the
construction firms have been keen on making their projects defect-free to provide minimum variability and
maximum customer satisfaction. In this regard, the SCM principles, especially Lean Six Sigma (LSS) principles,
have served as a beacon to improvise the UAE's construction sector. The paper thoroughly evaluates the LSS
techniques and tools to study the SCM impact on the UAE's quality of the construction sector. Under the analysis in
this report, the company's Arabtec Holding incurred losses of 774.5 million dirhams in 2019 from a profit of 256.3
million dirhams in 2018 (Gulf News Reporter, 2020).

Keywords: Quality Improvement, Quality in service, Lean Six Sigma, JITT, TQM.

Introduction

Today, manufacturing businesses are more inclined towards reducing product defects. They are focused on product
optimization, improvement of quality day in and day out while streamlining the production line. Construction
businesses are no far behind in this regard. The companies are using multiple quality management systems such as
TQM (total quality management), JIT (just in time), DFM (design for manufacturability), and LSS (lean six sigma),
among many others for waste reduction and quality improvement by eliminating defects in production (Ricardo
Antunes, Vicente Gonzalez, 2015). Being the hub of massive construction in the twenty-first century, Middle
Eastern construction companies that venture on mega construction projects of building skyrocketing tower s and
robust stadium share the same concern about quality management.

Delivering residential and commercial construction projects throughout the Middle East, Arabtec has gained
expertise in building the most complex yet flawless infrastructures. The Arabtec Construction, established in 1975
as the largest subsidiary of Arabtec Holding PJSC, aims at providing maximum value to the customer while
maintaining the quality of construction projects. The three-phase strategic roadmap of Arabtec envisages
maintaining a leaner organization at the target benchmark level (Nahyan, 2017). Experience of more than 40 years
combined with a highly skilled team let Arabtec Construction completed more than 240 projects, including the
world’s tallest building, Burj Khalifa, in Dubai, and the inspirational Louvre at Abu Dhabi (Arabtec UAE Team,
2020).

After having a profitable ending of the year 2018, Arabtecncurred a huge loss of $210 million by the end of the year
2019 that resulted in the resignation of its group CFO (Dadlani, 2020). The company has handed over six big
projects since the third quarter of 2019 and is expected to complete nine more legacy projects by the end of 2020. It

Cite this Article as: Suhaila Ali Abdula and Muhammad Usman “Identifying, Analyzing And Evaluating the Impact of Quality
of Supply Chain in Construction Sector Using Lean Six Sigma Methodology” Proceedings of the 36th International Business
Information Management Association (IBIMA), ISBN: 978-0-9998551-5-7, 4-5 November 2020, Granada, Spain.

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shows that the economy did not get slow, but the issues arose inside the company. Therefore, this report will
thoroughly evaluate the Lean Six Sigma tools and techniques for identifying Arabtec's relevant issue.

Literature Review

The construction sector tends to be the most important sector for the economic development of a country. The
construction activities are gradually becoming complicated, and traditional management methods have failed to
manage over the years (Shaharudin et al. 2018). The complexity of designs is the major problem that needs different
goods and services from different suppliers. It has become an issue with selecting experienced and specialized
suppliers in any project. In the projects' design, suppliers handle each fragment at their specialized end, which helps
to complete the whole project on time. Here, Supply chain management plays the most important role to efficiently
manage all the complexities of the whole project (Peter et al. 2020).

So, Supply Chain Management plays a very important role in the construction industry for the following reasons:

1. Decentralization lessens the time which is needed to attain efficient control.

2. Management of contractual agreements become very difficult to manage as many different suppliers are
involved.
3. The intersection of different suppliers/ contractors could lead to conflicts.
4. Technological advancements have moderated timings for project completion, so there is very little time to
concentrate on the clients (Lekan et al. 2019).
Regardless of these challenges, Supply Chain Management helps the construction industry around the globe.
Construction projects consist of many types and complexities. Supply Chain Management has improved the
construction industry's performance in this competitive world by minimizing costs (Okagbue et al. 2018).

“Procurement”: Procurement is the most important component in the construction sector. Supply Chain
Management is the system of interrelated people including suppliers, manufacturers, and logistics required to
complete the procurement process. With the use of technology, there is a modification in the procurement process
and traditional methods are fading away (Tansakul et al. 2018). The implementation of technological advance ments
ensures continuous Supply Chain management in the construction industry procurement, which helps increase
profits and reduce costs (Vardhana & Venugopal, 2019). Research about the originality of suppliers (Wang et al.
2017) and efficient supply quality at different phases of projects reduces the stress of delays, time, and resource
wastage (Thunberg & Fredriksson, 2018). It also helps to make sure that rules are not invaded (Morrison &
Trushell, 2016). Management of materials also requires strategy, so the quality is maintained and procured
throughout the supply chain (Caldas et al. 2015). Despite all these strategies, there are still some challenges present.
The complexities of the supply chain evaluate quality complicated (AlMaian et al. 2016). The partitioned nature of
projects by different parts helps the tasks be completed in some restricted time and makes the supplies quality-
oriented. This affects the quality at the pre-construction stage (Seng et al. 2018).

Supply Chain Management Models

Models are designed and practically applied when there are some gaps in managing the supplying chain. The
complexities, timings, and size in the construction industry can be managed through supply chain models. The
models can help to lessen the rework changes, cost reduction, time management, helps logistics, and information
flow management (Nuss et al. 2016). The construction industry can improve logistics by applying models that help
assess the propinquity of suppliers (Dallasega et al. 2018). Cost models for the supply chain can help to manage the
total cost of the project. This can be managed by assessing each fragment's impacts as the total construction cost is
related to it (Kim et al. 2016). Different suppliers have different decisions and objectives which end in creating
conflicts among them and it becomes very difficult to achieve similar goals and intrusts for the project (Peter et al.
2020). Models designed for the partnership with suppliers and managing the life cycle of the product help improve
the effectiveness of supply chain management in the construction sector (Ju et al. 2017). Furthermore, collective
risk can be excluded from the construction projects by determining the risk models (Liu et al. 2017). If the risks are
ignored, the construction projects can be exposed to supply chain troubles (Peter et al. 2020).

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Improvement in Construction Supply Chain Management

The construction sector consists of huge industries and needs to have the best and efficient supply chain
management for the construction chain. Construction companies need structured approaches to achieve the best
relationships with suppliers and the best results for the whole supply chain. Strategic planning is the first and
important step in the Supply Chain Management process. All the other steps are based on the planning stage. The
working of contractors affects the whole project. Construction companies should develop initiatives to improve the
performance of suppliers. These initiatives should include training, providing feedback, and consultation of
suppliers. Effective training also positively affects managerial and employee performance and commitment. It
reduces the obstructions and enhances the supply chain performance (Papadopoulos et al. 2016).
Measurement of Performance: Measuring performance has become a competition for all the construction
companies. In this competitive era, construction companies provide their managers with the guidelines so they can
evaluate the performance of suppliers. Firstly, the managers need to set some benchmarks for the suppliers to
measure their performances. Secondly, the usage of the information after measuring the performance to improve it
(Acquaye et al. 2018).
Benchmarking: The development of benchmarking is still in the initial phase. Benchmarking is based on
comparing the performance of metrics to determine objectives to attain in a specific period. So, it would be very
beneficial for the construction sector if they upgrade benchmarking for their projects. However, setting benchmarks
for the construction project becomes very difficult without supply chain management (Kärnä & Junnonen, 2016).
Information Management: During the supply chain management process, suppliers and contractors get the chance
to get information about the whole supply chain, which helps implement the knowledge to improve the performance
during the whole construction project (Pucihar et al. 2017).
Waste Identification and Exclusion: it is very important to identify the non-value-added services and activities
present in the supply chain process to eliminate the costs, wastage of energy, and material. It can be done at the
operational level during purchasing, managing, stocking, etc (Papadopoulos et al. 2016).
Application of Information Technology in Supply Chain Management: In this technological era, it is very important
to know about the developed technology. The construction industry should apply technological advancements
throughout the supply chain management process to achieve the best and effective results (Kaushik, 2018).

The construction projects are quite dynamic with myriad participants involved and many processes, making it
difficult to implement the supply chain management principles. However, the same reason becomes the basis of
implying SCM principles (Johnson & Babu, 2020). Thus, the Lean construction model has significantly helped to
generate active coordination among highly fragmented sectors of the construction project (Algan Tezel, Yasemin
Nielsen, 2013). As reported by the Khaleej Times, the value of ongoing construction work in UAEs estimated to be
$3 trillion (Abbas, 2019). The construction projects are expected to continue until 2030, making UAE the second -
largest hub of construction. Such issues affect the cost of labor and material and thus affect supply ch ain
management.

Arabtec construction firm is facing challenges with the start of the current year, swinging to a third-quarter loss in
revenue of about Dh774 m in 2019 (John, 2020). In a former statement, the company has attributed the loss to its
construction industry. It poses a high time for the firm to realize a lean model for its projects (Gulf News Reporter,
2020). One such model is Lean Six Sigma that is the blend of Lean Manufacturing and Six Sigma. It is developed to
create a comprehensive system that removes waste and reduces process variation for efficient manufacturing and
optimum product yield (Saad Sarhan, Andrew Fox, 2013).

Lean Six Sigma principally uses Six Sigma processes and methods, including DMAIC and the belt system as the
mainstay of the system to drive dedicated improvements in manufacturing while incorporating many techniques and
tools from Lean to reduce wasteful steps and processes (Dear Systems Staff, 2018). Some of the renowned methods
of six sigma used by Lean Six Sigma are DMAIC (that stands for Define, Measure, Analyze, Improve and Control)
and DMADV (that stands for Define, Measure, Analyze, Design and Verify). While DMAIC is for the existing
projects, six sigma uses DMADV for new projects and designs (Algan Tezel, Yasemin Nielsen, 2013).

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Figure 1: Six Sigma Methodologies

In construction projects, the key issue is having an increased non-value, adding actions regarding the flow of
material and labor on-site (Hasim et al. 2020). This waste can be related to material like excessive material stock,
vandalism, or mass production or it can be labor efficiency-related such as delays in work in process, laziness, poor
working status, etc. (Ricardo Antunes, Vicente Gonzalez, 2015). In brief, there are eight key concerns for
construction projects that are identified by different researchers namely; the flow of on-site material challenges such
as inventory-related challenges, overproduction, over-processing, transportation (freight costs), and flow of labor
on-site such as skills mismatch (Saad Sarhan, Andrew Fox, 2013). Issues related to Arabtec can be regarding the
flow of labor and material on the construction site.

Research Methodology

This study's primary objective is to analyze the impact on quality in the supply chain in the construction sector in
UAE (concerning analyzing the Arabtec project). The methodology envisages a thorough review of the literature to
identify that if the flow of material and labor on site is a major issue in the United Arab Emirates or not. To analyze
that either flow of labor and material on site does affect the satisfaction of the customer or the services provided by
the construction company, a survey was conducted based upon ten questions. There were a total of 30 responses for
each question.

Data Analysis & Results

From the survey, the following data were analyzed:

Figure 2 shows that 80% strongly agreed that the flow of material and labor on-site is a main and continuous worry
within the construction industry, 10% partially agreed while 10% disagreed.

Figure 2: Flow of Material

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Figure 3 shows that 53.33% strongly agreed that SCM in the United Arab Emirate’s construction industry needs to
modify the flow of material and labor on-site, 20% partially agreed, while 23.33% partially disagreed and 3.33%
strongly disagreed.

Figure 3: SCM in UAE

Figure 4 shows that 76.67% faced difficulty with the construction industry's construction process due to the flow of
material and labor on-site, and 23.33% didn't.

Figure 4: Construction Industry Process

Figure 5 shows that 43.33% strongly agreed that the flow of material and labor on-site strategies and ways should
be modified, 23.33% partially agreed, 6.67% were neutral, 6.67% disagreed, and 20.00% strongly disagreed.

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Figure 5: Labor on-site strategies

Figure 6 shows that 73.33% agreed that the modified flow of material and labor on-site within the supply chain
management overcame the issues between the supplier and client, 20.00% disagreed, and 6.67% weren't sure about
it.

Figure 6: Final Product Change

Figure 7 shows that 36.67% agreed that the final product's quality changed due to the material and labor movement
on construction sites, 43.33% disagreed, 13.33% said sometimes, and 6.67% didn't know about such stuff.

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Figure 7: Companies Relationships

Figure 8 shows that 70% agreed that the relationships between companies and their client could be fruitful with a
sustainable flow of material and labor on-site, 3.33% were partial, 6.67% disagreed, and 20.00% strongly disagreed.

Figure 8: SCM principles

Figure 9 shows that 80% said a need to change the supply chain management's principles and rules regarding the
flow of material and labor on-site, 16.67% disagreed, and 3.33% wasn't aware of such issues.

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Figure 9: Lean Construction

Figure 10 shows that 43.33% were aware of the lean construction models regarding the United Arab Emirates
construction industry, 33.33% weren't, 20.00% knew a little bit, and 3.33% were experts in it.

Figure 10: Construction Industry Transparency

Figure 11 shows that 60% strongly agreed that the construction industry still needs a transparent and decentralized
approach regarding the flow of material and labor on-site, 16.67% partially agreed, 6.67% disagreed and 16.67%
strongly disagreed.

Figure 11: Construction Industry Decentralized Approach

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Discussion

The data analysis identified two key factors that hamper the performance of Arabtec Construction in the UAE.
These key factors are the disturbance in the flow of labor and material on site. The above data analysis showed that
disturbance in labor and material on site causes a lot of trouble in Supply chain management. Because of this,
customers and clients don't seem much satisfied with the services and final products. Following is the fish map
showing the issues and possible challenges in the Supply chain management regarding material and labor issues:

Flawed structure Late project completion

Unskilled
Shortage of labour Mishandling
Personnel

Unhappy customer

Lack of cash Shortage of material

No completion on time

Less Capital Measurement

Incomplete project

Figure 12: Cause and Effect Diagram

Any project in the construction industry can be successful if accurate labor has relatable skillfulness and material is
delivered at the right time with reasonable finances. The project will be unsuccessful if the flow of material and
labor on-site goes wrong or disturbed due to the wrong material in the wrong location at the wrong time. To obtain
the labor and material on time, it's necessary to have the capital and cash flow without which this all is impossible.

There are multiple tools and techniques of lean six sigma that can be used in this situation at Arabtec to better labor
and material flow. Some of the tools and techniques of Lean Six Sigma that can be useful in this situation are as
follows:

• A one-piece flow model enables the manufacturer to focus on flow efficiency.

• JIT – Just in Time: Reducing production time, supplier, and customer response time.
• Kanban: This is a technique to eliminate MUDA (waste) by ensuring continuous workflow.
• Kaizen: A methodology to incorporate small, ongoing changes in the system to ensure regular
improvements.
• 5S (Sort, Set Order, Shine, Standardize, and Sustain)
• Value Stream Mapping: It shows the flow of materials and information in one of the processes and
developed to improve and optimize flow throughout the organization.
• Six sigma conversion table: It identifies the main issues in the disturbance of material and labor on-site by
studying the project's weekly activities.

Recommendation

Following is the figure of the Lean construction model, which can assist in overcoming the challenges faced
regarding the flow of labor and material on site:

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Figure 13: Lean Construction Cycle

Also, there is a need to have skilled planning regarding the material and labor on-site flow for the projects, a
thorough analysis of the projects to curtail indicators mentioned in the fish map. To minimize disturbance of the
flow of material and labor on-site in high-rise construction, Arabtec Construction must use multiple lean six sigma
tools and techniques from the ones mentioned in the report's discussion, including JIT, Kanban, 5S, and standard six
sigma conversion tables.

The data gathered through six sigma conversion tables will help to construct control charts, thereby mitigating the
uncontrollable uncertainty to a certain extent. The sigma level could be improvised after a thorough analysis of data.
Another important consideration for this project is classifying and identifying sustainability factors based on risk
management standards. The company should also consider it imperative to improve productivity through a special
focus on utilizing the Value Stream Mapping tool.

Conclusion

Lean Six Sigma is a well-regulated and data-based method for the improvement of quality. The tools and
approaches adopted in Lean Six Sigma are similar to other quality improvement techniques, but the structured
methods used for improvement procedures give it a recognized value. However, Lean Six Sigma in the construction
sector is a novel idea in developing nations like India, China, etc, and is being adopted in developed countries.
Because of non-standardized procedures and insufficiency in advanced quality capabilities in the construction
sector, it falls behind the other important industries like services and manufacturing. The recent challenge to satisfy
customers' demand for enhanced quality and good products at reduced costs needs sustainable tools and structured
methods for quality improvement.

Leans Sig Sigma confirms that there are no issues and decreased variations in a procedure and concentrates on
consumer satisfaction. It also supports reducing energy, waste, and pollution during construction and presents the
concepts and key plans for sustainable development. Lean Six Sigma is a prominent solution for all the issues
related to quality in construction. It supports the improvement procedures, which result in the reduction of cost and
waste. Lean Six Sigma can also introduce a culture that guarantees uninterrupted improvement and perform
appropriate re-evaluation of procedures, which supports sustaining a competitive position in the international
market environment.

. Additionally, SS can develop a culture that ensures continuous improvement and conduct a timely and purposeful
reassessment of processes, which will help maintain a competitive edge in the global business environment.

The impact of Supply chain management on the UAE construction industry has been noticeable. However, there is
still room for a more transparent and decentralized project management approach. Incorporating Lean Six Sigma
(LSS) tools and techniques, customized as per project needs, is imperative for a rise in customer satisfaction and
revival of monetary gains, especially for Arabtec Construction and other construction companies in general.

The UAE's construction industry will grow with project timelines as long as the year 2030. Such timelines need to
have more synergized processes, with each process well integrated with the final output to retain customer

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satisfaction. Among the many tools for such projects, LSS is the most advisable option for UAE construction firms'
managers. The models have a proven impact on the quality of the product ranging from manufacturing, software, IT
firms to the infrastructure industry.

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