Considerations for Streamlining a Vertically-Integrated Company - A Case Study

Nadia G. Akel1, Iris D. Tommelein2, J.C. Boyers3, Kenneth D. Walsh4 & James C. Hershauer5

1Ph.D. Student, P.E., Civil and Envir. Engrg. Department, 215 McLaughlin Hall, Univ. of California, Berkeley, CA 94720-1712, TEL/FAX 925/944-9598, ngakel@uclink4.Berkeley.edu
2Professor, Civil and Envir. Engrg. Department, 215-A McLaughlin Hall, Univ. of California, Berkeley, CA 94720-1712, 510/643-8678, FAX 510/643-8919, tommelein@ce.berkeley.edu
3Corporate Alliance Team Operations Manager, Butler Manufacturing Company, 700 Karnes Blvd. (64108) P.O. Box 419917, Kansas City, MO, 64141-0917, 816/968-3914, FAX: 816/968-4385, jcboyers@butlermfg.com
4Associate Professor, Del E. Webb School of Construction, Arizona State University, Tempe, AZ, USA, 85287-0204, 480/965-3615, FAX: 480/965-1769, ken.walsh@asu.edu
5Professor, Department of Management, Arizona State University, Tempe, AZ, USA, 85287-4006, james.hershauer@asu.edu

Abstract

This study focuses on the application of vertical integration, supply chain management, and lean construction practices to Butler Manufacturing Company, a pre-engineered metal building manufacturing company. Butler engineers, designs, manufactures, and erects building systems and architectural products for the nonresidential construction market. It is currently the leading producer in the 5 billion-dollar metal pre-engineered metal building market. Butler is vertically integrated. Nevertheless, its design, manufacturing, and construction businesses operate more-orless independently. The company therefore is not able to reap the benefits of a truly integrated enterprise. In addition to describing the industry and Butler’s organization, the purpose of this case study is to explore vertical integration within Butler for two reasons: (1) to identify means for achieving true integration amongst the company’s various businesses and (2) to guide the company in becoming a “lean” organization. This study investigates the possibilities of achieving closer alignment between Butler’s design/manufacturing arm and its construction arm. Such alignment may be achieved by implementing lean production principles not only within but also across organizational boundaries. This study also briefly touches on the company’s supply chain. This paper points out that Butler’s design/manufacturing arm and its construction arm are not taking advantage of available opportunities presented by vertical integration, supply chain management, or lean production practices. It recommends that these divisions of Butler learn to work together more closely and toward joint exploitation of these opportunities.

Keywords

Vertical integration, supply chain management, lean construction, pre-engineered metal building systems, Butler Manufacturing, BUCON, corporate strategy.

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Reference

Akel, N.G. , Tommelein, I.D. , Boyers, J. , Walsh, K.D. & Hershauer, J.C. 2001, 'Considerations for Streamlining a Vertically-Integrated Company - A Case Study' In:, Ballard, G. & Chua, D., 9th Annual Conference of the International Group for Lean Construction. Singapore, Singapore, 6-8 Aug 2001.

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