Managing risks of precast concrete supply chain: a case study

Abstract

Precast concrete has typically long lead time, starting from order placement, production stage, to delivery to project site, all of which requires good supply chain management. As a consequence, the risks of its supply chains are inevitable and must be anticipated to ensure the success of a project. The aim of this research is to assess the risks of the supply chain of precast concrete from production to delivery to projects. WKB, a government-owned company that produces precast concrete, has been used as the case study. Activities along the supply chain were mapped based on five dimensions of Supply Chain Operation Reference (SCOR), i.e. Plan – Source – Make – Deliver – Return, upon which risks were identified. Data was collected through in-depth interview and questionnaire survey to key persons of WKB. A 1-5 Likert scale was used to quantify the occurrence and severity of risks along the supply chain. The identified risks were classified into four levels based on the multiplication of the occurrence and the severity, i.e. critical, major, moderate, and minor. A total of nine critical risks were found along the supply chain, i.e. sales forecast and planning for production (Plan); production capacity of natural material vendors (Source); sudden change of production, shortage of skilled workers, additional cost for land stockyard rental, and renewal for industrial land lease license (Make); risk of non-standard transportation (Deliver); defective and failed products (Return). This research provides a valuable understanding of the risks of the precast concrete supply chain and the mitigation strategies.