Reducing Material Management Costs Through Lateral Transshipment

Chien-Ho Ko1

1Associate Professor, Department of Civil Engineering, National Pingtung University of Science and Technology, 1, Shuefu Rd., Neipu, Pingtung 912, Taiwan, phone: +886-8-7703202, fax: +886-8-7740122, e-mail: [email protected]; Research Director, Lean Construction Institute- Taiwan; Executive Director, Lean Construction Institute-Asia


Materials required for precast fabrication are dissimilar to those cast at construction sites. Fabricators who lack materials must wait until specific suppliers deliver the required materials. Transshipping material from lateral suppliers may be beneficial for reducing waiting time and material management cost. The objective of this study is to reduce total material management costs in the supply chain system through the most advantageous transshipment strategies. A material supply chain framework that enables fabricators to implement lateral transshipment is first proposed. Transshipment strategies are then formulated into a mathematical model. The most advantageous transshipment strategies are analyzed using computer simulation. Diverse order lead times, demands, transportation costs, and shortage costs are simulated to approximate operational conditions encountered in supply chain systems. Through various experiments, the most advantageous strategy for precast fabrication industry could be found. In addition, rules are developed based on simulation results to enhance transshipment decision making.


Precast fabrication, supply chain management, material transhipment, computer simulation.



Ko, C. 2012. Reducing Material Management Costs Through Lateral Transshipment, 20th Annual Conference of the International Group for Lean Construction , -.

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