Effects of a Preferred Vendor Relationship on an Electrical Component Supplier and Electrical Contractor - A Case Study

Caren A. Crutcher1, Kenneth D. Walsh2, James C. Hershauer3 & Iris D. Tommelein4

1Graduate Research Assistant, Del E. Webb School of Construction, Arizona State University, Tempe, AZ, USA, 85287-0204, 480-965-3615, FAX: 480-965-1769, caren.crutcher@asu.edu
2Associate 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
3Professor, Department of Management, Arizona State University, Tempe, AZ, USA, 85287-4006, james.hershauer@asu.edu
4Professor, Civil and Environmental Engineering, University of California at Berkeley, 215-A McLaughlin Hall, Berkeley, CA 94720-1712, USA, 510-643-8678, FAX: 510-643-8919, tommelein@ce.berkeley.edu

Abstract

Proven supply chain management techniques hold much promise for the further development of construction as an industry, in terms of gaining efficiencies and streamlining processes. Because construction processes rely so heavily on people working together, examining new ways that participants on a project communicate and form relationships is vital to the advancement of the construction industry. This paper focuses on a case study that explores the effects of a strategic partnership directly observed in practice. This partnership evolved to support an alliance formed between a major owner/client, a general contractor, a mechanical contractor and an electrical contractor. The partnership is a preferred vendor relationship between the electrical contractor and an electrical component supplier. In this sense, the partnership on which the case focuses is one tier removed from the alliance, from a supply chain perspective. The implementation of this strategic partnership involved restructuring the process for procuring non-engineered, commodity type electrical components. This restructuring resulted in marked increases in productivity, reduction of inventory, and in efficiencies gained in material handling.

Keywords

Supply chain management, construction supply chain, strategic partnering, inventory management, electrical contractor, distributor.

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Reference

Crutcher, C.A. , Walsh, K.D. , Hershauer, J.C. & Tommelein, I.D. 2001, 'Effects of a Preferred Vendor Relationship on an Electrical Component Supplier and Electrical Contractor - 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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