Work Floor Experiences of Supply Chain Partnering in the Dutch Housing Sector

Abstract

Introduction and research approach The construction industry is known for its waste of money and materials, low innovative capacities, and low productivity (Cox and Thompson, 1997; Vrijhoef, 2011). One reason is that the relationships between client and contractors is often perceived as a problematic one (Tazelaar en Snijder, 2010; Vrijhoef, 2011). Since decades, attention has been paid to supply chain partnering (SCP) in the construction industry, as a promising strategy to decrease waste of time and money and increase quality and address the problematic relationships (Boukendour and Hughus, 2014; Bygballe et al., 2010; Eriksson, 2015; Hong et al., 2012; Vrijhoef, 2011). Despite the attention, it is hard to exactly pinpoint the concept of SCP. Many definitions, synonyms and related concepts circulate and it seems that SCP has increasingly become a buzz-word that represents ‘good practices’ in the construction sector. Nevertheless, applying SCP may involve ‘hard’ factors, such as early involvement of the contractor in the project, open book accounting, re-allocation of risks, and working with preferred partners. SCP may also involve ‘soft’ factors, such as increasing mutual trust between partners, increasing competences of conflict resolution or trying to establish more effective communication between partners. Some scholars argue that SCP should be considered as an emergent practice which can take on many different shapes (e.g. Bresnen, 2009; Hartmann and Bresnen, 2011; Marshall and Bresnen, 2013a; Marshall and Bresnen, 2013b). This study focuses on SCP as an emergent strategy. An emergent strategy, contrary to a deliberated strategy, is a strategy that arises in ongoing daily complex responsive processes between individuals. While a deliberated strategy looks forward and prescribes what people should do, an emergent strategy looks back and describes what people already do. Studies that dig deeper in those work floor practices and truly consider SCP in construction industry as an emergent practice is relatively scarce. It is said that current literature on this topic is stylized and too abstracted from daily work practice. Individual experiences are averaged away in an attempt to develop a general theory. There is too little insight in what people actually do in daily work practice and how they form a strategy such as SCP. Work floor experiences of SCP should be studied, because without the insight, it is difficult (if not impossible) to intervene in an efficient and effective way and to improve performances. To study work floor experience of SCP, a specific part of the construction sector was chosen. After all, experiences in different fields may differ. This study focuses on Dutch housing associations. Dutch housing associations own a third of the total Dutch housing stock. Being one of the biggest clients, they dominate the sector. Due to several reasons, Dutch housing associations have to cut back expenditures. Supply chain partnering is one way to try to do this. Within the context of Dutch housing associations, we chose to study the work floor experiences of the project leaders, because project leaders are important in translating principles of SCP into daily work floor routines. Thus, the problem is that not enough attention has been paid to what goes on at work floor level when project leaders try to apply principles of supply chain partnering. This insight is necessary, because supply chain partnering is formed by ongoing processes of interactions between professionals in daily work practice. Therefore, to improve performances and intervene effectively, insight in work floor practices should increase. This research aims to describe work floor experiences of professionals who work for Dutch housing association and who attempt to apply SCP. To reach this target the following question will be answered: What are work floor experiences of project leaders that work for Dutch housing associations who try to apply principles of SCP? Just one broad open research question was formulated, so that work floor experiences could be studied holistically. By not formulating specified sub-questions beforehand, the right circumstances were created for themes to emerge inductively. These themes are: • The importance of the intra-organizational supply chain in effective collaboration • Leadership. • Inconsistent use of values that are associated with the concept of SCP. • Power dynamics and ethics. This study relies on the assumption that current literature about construction partnering is too abstracted from daily work life. In order to justify this assumption, a literature review was conducted. Another assumption on which this research relies, is that all knowledge is socially constructed and that this knowledge can only be known from an individual subjective frame of reference. Therefore, every notion of reality that people have is non-objective and limited by the boundaries of language. That means that this research presents a researcher’s interpretation of a social construct, which is in this case work floor experiences of supply chain partnering. This research consists of a literature review, three case studies, and an overarching study in which the insights that are gained in the three case studies are synthesized. Although the research approach in each case differs slightly, in each case study narrative techniques are used. The main method to gather data was conducting open, semi-structured interviews in which the participants were asked for their experiences with SCP and the context that enabled or restrained them for applying SCP. The main method to analyze data in each case study was constructing a narrative about and with the participants in the case study. For each case study narratives were created and validated by presenting the narrative to the participants. The cases were brought together in two ways. On the one hand, predetermined dimensions were used to compare the data and on the other hand themes have emerged inductively. Not surprisingly, the results of both ways overlap and interrelate. Results The first case study presents the results of a study in which a work floor professional together with a researcher tried to contribute to the implementation of SCP within renovation processes of a Dutch housing association. The managing director purchased and introduced BIM-software, and some project leaders began to organize ‘BIMsessions’. That means that the project leader invited internal as well as external supply chain partners, to a develop plan for a housing complex. It appeared to be difficult for the project leader to lead this conversation. There is a lot of discussion about many topics, structure lacks and discussions end without conclusions. Questions about the organization’s policy about for example sustainability remain unanswered, even when the project leader asks his colleagues within his own organization. Finally, the project leader and the co-makers managed to develop a plan for the housing complex. However, while a lot of time was spend on developing the plan, a misunderstanding with the internal client caused serious uncertainty whether this project could continue at all. The second case study followed multiple project leaders in a Dutch housing association who try to apply SCP. The department had just been reorganized. Among other structural differences, a new department of Purchasing was founded. Some project leaders considered this new department as an extra chain in the supply chain. One of their tasks was to select contractors, which was something that the project leaders used to do themselves. The narrative tells that a duo started to develop their own selection procedure and selectively ‘forgot’ to involve the department of Purchasing. Also other intra-organizational dynamics are described, for example the relationship between project leaders and their team leaders was not always easy. It was found that key values of SCP as understood by the project leaders - such as sharing responsibilities and addressing feedback towards each other openly - are applied inconsistently. The third case study evaluated a team of professionals from a Dutch housing association and a contractor who perceive themselves as a successful supply chain. The collaboration grew in an organic way, because the contractor was selected multiple times in multiple selection procedures. The perceived successes seem to be based on the repetition in their collaboration. Remarkable in this case was that the individual interviews show that some people of the client organization within the successful supply chain, were considered as not so successful after all. About these people it was said, for example, that they try to control the contractor too much. Those people were aware of their image, but a conversation about it never took place. Instead, as one of the contractors said, they try to work around those people. The narrative also describes that during this case study, within the client organization it was decided not to work with preferred partners. That means that in the future the contractor still has to go through selection procedures and that makes continuation of the success in the future insecure. Conclusions Before conclusions of the case studies are detailed, first the results of a literature study about the nature of qualitative construction partnering research are discussed. Current literature about construction partnering research is said to be too abstracted from daily work life. Reviewing the nature of qualitative construction partnering research identified the following gaps. 1) Literature underexposes processes of data analysis. 2) Reflection on the role of the researcher(s) in the research process is underexposed. 3) The individual level of analysis is underexposed. 4) The way in which the results are generalized remain somewhat opaque, especially reflections on internal generalization are underexposed. All identified gaps have in common specific time and place dependent details that may have influenced understanding of studied individuals are underexposed and that may explain a feeling that current literature is abstracted from individual work experiences. What are work floor experiences of project leaders who work for Dutch housing associations and who try to apply the principles of SCP? The narratives describe that with or without a managerial intervention, some of the project leaders start experimenting with applying SCP. Individual initiatives have risen, albeit in a somewhat patchy and uncoordinated manner. The number and nature of supply chain partners is large, diverse, complex and dynamic. It appeared to be difficult to unify all the participants with different agendas and frames of reference. The cases address many issues in intra-organizational relations that hamper the collaboration with external partners. The work experiences also show that key values associated with SCP are applied only to some groups and individuals within the supply chain. Similarities between the cases in terms of strength, scope, duration and depth The cases were compared using four dimensions that were provided by Eriksson (2015). The dimensions are strength, scope, duration and depth of SCP. This resulted in multiple observations. None of the project leaders worked with preferred partners (by-passing expensive and time-consuming procurement and selection procedures) in any case, and there is no indication that this will change in the future. In all three cases, it was expected that applying SCP would reduce costs, but there was no agreement as to what those costs were specifically. In general, pricing and cost remained a complex topic, and all project leaders referred to different aspects of this topic. Formally, the duration of relationship with the contractors was one project only. Informally, the respondents acknowledged that they expected to cooperate again with most of the contractors in the future. One reason for this could be the limited size of the regional market. The maintenance phase was not involved in the collaboration in any of the cases. The contractor’s timing of involvement varied between projects. However, in all cases, the outlines of the project, such as approximate budget and main technical interventions, were predetermined, and difficult and time consuming to change. Implementation of SCP (especially when applied for the first time in a project setting) was not perceived as something that necessarily leads to shorter duration of (parts of) the project. In all three cases, the managing directors of the departments of renovation supported SCP. However, the managers’ actual involvement in daily work practice was limited. Moreover, the support did not lead to changes in the formal strategy for the other departments in the organization outside the department of renovation and maintenance. As described in the introduction of this thesis, this research deliberately started with one broad open research question for themes to emerge inductively. These four themes are: 1) the importance of the intra-organizational supply chain in effective collaboration. 2) Leadership. 3) Inconsistent use of key values that are associated with the concept of SCP. 4) Power dynamics and ethics. The four themes are elaborated below. The importance of the intra-organizational supply chain in effective collaboration All three cases show the importance of the intra-organizational supply chain on relationships with external partners. All three cases show examples of project leaders who try to collaborate with contractors, but were hindered by intra-organizational issues. For example, the first case study shows that a serious misunderstanding with the internal client caused uncertainty of the progress of a project in which a time was invested by the contractor. In the second case study, the newly founded department of purchasing was perceived by some project leaders as an extra chain in the supply chain, which makes processes of selecting partners more complex instead of lean. The third case study shows that continuation of the success was insecure, because within the client organization it was decided not to start working with preferred partners. Based on these examples, it was concluded that different types of non-functional intraorganizational dynamics slowed down the collaboration processes with the external partners, or made continuation of perceived good practices insecure. Leadership From the perspective of the project leaders, it seems that their managers’ focus is not on facilitating daily work practice of SCP, neither on designing and communicating a deliberate SCP-strategy. It seems that some project leaders feel victims of contextual vagaries, not always able to get a grip on managing the supply chain effectively. Interventions that were undertaken by project leaders and their managers, are patchy, contradictory, and/or unfinished. Many individual initiatives have arisen, but continuation of good practices appeared uncertain. In all three cases, the project leaders’ managers (in different hierarchical levels) initiated and/or supported the implementation of SCP. For example, BIM-software was purchased, a presentation was organized, or the project leaders are supported with words. And in each case a procurement policy still prevailed and management’s expectations of what project leaders should do or aim for were not clear. The social relation between the project leaders and their managers appeared to be problematic in many individual cases. Especially the project leaders in the first and second case experience that the managers have too little insight and ear for what the project leaders do and the problems they encounter in daily work life. When those project leaders try to discuss their experiences, they often feel unheard and misunderstood. Inconsistent use of key values that are associated with the concept of SCP The cases show that certain values were associated with applying SCP. In the first case trust and trustworthiness are discussed. In the second case values such as ‘sharing responsibilities’, ‘pro-activity’, and ‘you must give each other open and honest feedback’ were discussed. In the third case, among other things, informal evaluations and expressing appreciation from the client’s project leader towards the building site workers were mentioned as important values. The exact formulation of these key values always differs slightly, but there is no reason to assume that the mentioned key values differ significantly from what has often been mentioned in literature about construction SCP. It could be argued that these key values are similar to general ideas of professional behavior and should therefore be applied in non-SCP-situations as well. But that debate falls outside the scope of this study. New insight that this study provides is that the key values that are associated with SCP were applied to limited parts of the supply chain only and applied inconsistently. For example, the internal client was not involved in the application of SCP at all, and therefore the values of SCP were not applied to this party. Another example, in the third case study, people who were perceived as ‘not that far in their thinking’, were not provided with a short informal evaluation, although that was mentioned as a factor of success. Especially the intra-organizational supply chain seems to be treated differently than the inter-organizational supply chain. This dynamic of shifting application of values and the actions that provokes, seems not to be a matter of bad intentions. There is no reason to question individual intentions. Rather, possible reasons could be that project leaders are not always (fully) aware of the extent of the supply chain they are working with, or they feel unable to apply the key values, or they do not believe in a positive result of doing so, or they fear the consequences. Power dynamics and ethics Whatever the reason for the shifting application of key values of SCP is, the participants together have created situations that provoke ethical questions. Related to this discussion, is the discussion about power dynamics. In this study power is not seen as something that one possesses, rather it is something one gains through interactions. A constant power shift is ubiquitous in all normal daily social interactions. The cases show that in normal daily work life, people constantly negotiate, construct, conduct process of trial-and-error, and in those processes, they may gain or lose power. Power arises in normal social interactions at work floor and power dynamics can be visible or hidden. An example of a form of visible power is when the client’s project manager claims that contractors are not allowed to make money on smart purchasing of materials. He proposes a system involving a risk buffer, something which the contractor’s head of the regional branch agreed to, although he does not think this is fair. An example of hidden form of power is when a purchaser might have formal power over project leaders in terms of selection of contractors, but the project leader might gain back his power by selectively ‘forgetting’ to involve the purchaser in a selection procedure, and so on. It is well possible that an internal client, who appeared to be not engaged and informed about the change of the department of renovations and maintenance towards SCP, does not even realize the power he may have on the process. That means that certain people unexpectedly and unconsciously may appear to have a great power in the process of collaboration. It seems that, although perhaps unintendedly and unconsciously, supply chain partnering is used strategically to gain power. The word ‘SCP’ (or one of its synonyms) can be used as an argument to easily convince somebody else to do something that one would otherwise not do. After all, SCP is a buzz-word that seems to represent ‘good practices’ in the sector, rather than it is a deliberated strategy. Key values that are associated with SCP are hard to not agree with. By strategically referring to key values of SCP power can be gained. Perhaps the clearest example of such an issue is shown in especially the first and third case studies. A possible interpretation of the case studies is that applying SCP leaded to a situation in which the contractors still go through time consuming and expensive selection procedures, are involved in earlier phases of the process (thus provide extra work), still have limited influence in the technical interventions, have more responsibilities, and are supposed to (gradually) save 20% of the costs (although it is undefined how this cost-reduction is calculated). It is highly questionable whether this is fair and whether all the effort that was put in applying SCP will solve the problems that people expect. This also feeds the impression that despite the attention, engagement, and effort put into applying the principles of SCP, intraand inter-organizational collaborations have not improved fundamentally. Reflection on research, academic and practical implications Before implications and recommendations of this study are discussed, the study should be reflected and limitations should be acknowledged. The first point of reflection concerns finding the right position of the researcher in the field. Whatever position the researcher has in the field, the most important aspects are awareness of that role in the field, and awareness that the researcher is just as well part of the ongoing complex responsive processes. Another methodological quest was what it means to analyze at an individual level of analysis. Throughout this study, it was experienced that abstracting from direct experiences happens gradually. Based on this research an ideal level of abstraction cannot be determined, but also at this point the researcher has to be aware and make conscious decisions (and be transparent) at all times. Another point of attention is about objectivity and neutrality of the researcher. Instead of pretending to be objective and neutral, I think it is better to acknowledge that no person is capable of being objective and neutral. Therefore, although this may be difficult, the researcher has to be as transparent as possible about it. Then the reader has more opportunities to value the research in an honest way. Academic recommendations concern development of theory as well as methodology. A first academic recommendation is to keep considering work floor experiences of implementing SCP – or the introduction of any other phenomenon, such as Total Cost of Ownership, or circular building. Research that is abstracted from ongoing daily work practice, may easily overlook relatively small, unexpected, but influential factors. A second academic recommendation, is to study ethics in relationships at work floors. This research provides reasons to think that some groups are treated with different values than others, and the question is whether this is justified. Also, it was observed that participants together create situations that provoke ethical questions, while there is no reason to question individual intentions. A third academic recommendation concerns the low diversity among the project leaders. Most project leaders in this study are white male with a technical or business Bachelor-degree. Only one of the studied project leaders was female. We think this represents the diversity within the total population. The relation to low diversity and performance in this sector should be studied. Methodological recommendations concern qualitative construction partnering research and are directly based on the four methodological gaps that are identified in the literature review, and is four-folded: 1) more attention should be paid and/or transparency should be increased about the process of data analysis. 2) the researcher should reflect more on his/her role in the research process is underexposed. 3) more analysis at individual level is necessary. 4) There should be more attention and transparency about the way in which the results are generalized. Practitioners in housing associations – and other parties in other supply chains – can use the findings in multiple ways. The description of work floor experiences may provoke many ideas for practical interventions, but the results of this study can never be an argument to intervene in other situations. Professionals who are inspired by this research are recommended to, before coming to action, evaluate their own situation thoroughly. The conclusions can be a point of attention within that evaluation, but professionals may also be inspired by the methodologies that were used in this study to evaluate work floor practices. Important tools in evaluating one’s own situation is conducting interviews and observations from different perspectives in different hierarchical levels within parties in the supply chain. This may be done in a formal and informal way and it might be more a matter of attitude than action. After all, a professional is part of ongoing conversation with all kinds of people daily. Therefore, there are plenty of opportunities to conduct interviews and observe the situation situations with an evaluative eye. A second recommendation is that, if practitioners decide to intervene, they should focus on the effects of the intervention, at least as much as the intervention itself. The action does not stop when the intervention is done, rather the action begins after intervening. Again, this is a matter of attitude, rather than a matter of action. A third recommendation is to explore the role as managers and leaders. The study shows project leaders feel that their managers not always take the lead, and project leaders themselves seem not always able to take the lead either. There is a lot of management literature about the seemingly paradox of managing unmanageable processes, that can help in exploring this role. Whatever the outcome of the self-exploration process will be, the cases show that many project leaders feel unheard and misunderstood by their managers. This dynamic is relatively easy to overcome, and that takes effort from both the manager and the project leader. Simple conversation rules, such as non-violent communication principles, may help in increasing mutual understanding and increasing competences of listening. Fourthly, we observe that some parts of the supply chain are thought of (and treated) with different values than other parts. To change this, self-awareness of use of such key values and answering the question whether this is justified should be answered individually. All practical recommendations have in common that they require a high level of self-reflective competences, and therefore it is recommended to keep increasing self-reflective competences. Again, this is a matter of attitude, rather than undertaking extra actions. There are different ways to achieve this. People can start by considering their daily communication as if it were interviews or observations and start acting like reflective practitioners. This action will likely also increase skills of listening. Further, one can ask help of a coach. Or one can consider meditating. Becoming and being reflective is an ongoing process.