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Organizing construction logistics outsourcing: a logistics strategy perspective

Construction Innovation

ISSN : 1471-4175

Article publication date: 26 June 2023

The construction industry shows an increased interest in how to manage logistics within construction projects. Often construction logistics is outsourced to a logistics service provider (LSP). However, construction logistics is normally approached either as a strategic decision or as an operational issue and rarely as a tactical concern. The purpose of this study is to explore how to organize the logistics outsourcing decision at strategic, tactical and operational levels.

Design/methodology/approach

This study is performed as a single-case study within a construction corporation, containing (amongst others) a building contractor (BC) and a construction equipment rental company (CERC) offering logistics services.

The study shows that to procure construction logistics service successfully, BCs need logistics capabilities at strategic and tactical levels to maintain an alignment between the use of logistics services and operational characteristics. Simultaneously, CERC’s need to design their service offerings to correspond to the needs of the BC.

Research limitations/implications

This study builds on a single-case study of a Swedish construction corporation. Further research is needed to better understand current logistics outsourcing and development practices and how these can be improved to foster better logistics management at the project level.

Practical implications

BCs find suggestions of different logistics organization structures and suitable outsourcing arrangements. CERCs and LSPs can use the findings to understand their customers’ needs and adapt service offerings.

Originality/value

To the best of the authors’ knowledge, this study is one of the first studies of how two companies within a corporation can work together to develop construction logistics service offerings.

Construction logistics
Outsourcing
Building construction
Logistics services
Supply chain management
Construction management

Haglund, P. and Janné, M. (2024), "Organizing construction logistics outsourcing: a logistics strategy perspective", Construction Innovation , Vol. 24 No. 7, pp. 223-238. https://doi.org/10.1108/CI-01-2023-0017

Emerald Publishing Limited

Published by Emerald Publishing Limited. This article is published under the Creative Commons Attribution (CC BY 4.0) licence. Anyone may reproduce, distribute, translate and create derivative works of this article (for both commercial & non-commercial purposes), subject to full attribution to the original publication and authors. The full terms of this licence may be seen at http://creativecommons.org/licences/by/4.0/legalcode

1. Introduction

Construction projects are characterized by an element of temporariness as production is carried out at the final place of consumption ( Ekeskär and Rudberg, 2016 ), with new production sites in each new project. This differs from other industry contexts where the place of consumption is decoupled from the place of production and the production facilities are, to a greater extent, fixed in their location. These differences indicate that logistics in construction needs to be managed in a more dynamic way as the project conditions will dictate how logistics is carried out on-site ( Spillane et al. , 2013 ; Spillane and Oyedele, 2017 ) as well as to and from sites ( Ghanem et al. , 2018 ; Ying et al. , 2021 ). At the same time, construction is material intensive and according to Scholman (1997) , 60%–80% of the gross work involves purchased materials and services and approximately 40% of the project cost is made up of logistics costs ( Jang et al. , 2003 ). All in all, this suggests that logistics management should be a priority in the construction industry. However, as noted by Navon and Berkovich (2005) , logistics management has traditionally been approached in an ad hoc manner by construction projects and not as an opportunity to improve the construction projects’ performance. Instead, construction projects have solved their daily logistics activities on a day-to-day basis ( Ying et al. , 2018 ). Lately, however, construction logistics has received more attention from the construction industry and research alike, and BCs are starting to see the benefits of managing logistics ( Dubois et al. , 2019 ). In the construction industry, outsourcing is the norm and construction projects are typically dependent on a multitude of subcontractors and suppliers being procured for each new project ( Dubois and Gadde, 2002 ). Outsourcing logistics activities is thus not farfetched, but rather keeping in line with the temporary structure of the industry ( Fredriksson et al. , 2021 ).

While logistics outsourcing in construction can bring benefits in terms of specialization ( Sundquist et al. , 2018 ) and better estimates of material handling costs ( Lindén and Josephson, 2013 ), the benefits of logistics outsourcing do not always outweigh the cost of acquiring a logistics service provider (LSP). The outsourcing norm in the construction industry typically favour short-term arrangements with LSPs, despite that LSP alliances or even in-housing logistics can generate greater benefits under certain circumstances ( Selviaridis and Spring, 2007 ). In general, when a firm is dependent upon an LSP, it is more likely to engage in a strategic alliance or in-house logistics functions to a greater extent ( Hofer et al. , 2009 ). The main rationale why contractors decide to outsource logistics is thus primarily due to institutional factors rather than for efficiency and effectiveness reasons.

Previous research indicates that the logistics outsourcing decisions, regardless of the outcome in terms of in-housing or outsourcing, need to be rooted in the buying firm’s logistics strategy ( Selviaridis and Spring, 2007 ). Autry et al. (2008 , p. 27) define logistics strategy as “strategic directives formulated at the corporate level […] used to guide more efficient and effective logistics activities at the operational level of the organization”. From the perspective of the BC, the logistics strategy thus plays a key role by guiding the decision-making at the project level as to whether to perform logistics in-house or to outsource it to an LSP. Previous studies on third-party logistics in construction suggest that logistics outsourcing can be a means of developing new capabilities that would not be possible with an internal logistics function ( Sundquist et al. , 2018 ). On the other hand, by internalizing the logistics function, the main contractor can set up a logistics system that is aligned with the type of product, production process and supply chain characteristics ( Haglund et al. , 2022 ).

Construction logistics literature has so far mostly focused on logistics outsourcing at the project level. Meanwhile, there are few examples of contractors with a formalized logistics strategy and an internal logistics function. Instead, construction logistics is seen as an operational issue to be managed within each construction project ( Ekeskär and Rudberg, 2016 ). BCs typically struggle to achieve sufficient economies of scale in construction logistics and thus opt for the outsourcing option ( Le et al. , 2021 ). This augments the temporary structure of the construction industry ( Dubois and Gadde, 2002 ) and limits long-term strategic approaches to logistics management in construction. Furthermore, there is typically a missing link between strategic- and operational-level logistics among BCs ( Thunberg et al. , 2017 ; Elfving, 2021 ). The missing tactical level of construction logistics should act as translating the operational needs of all projects into rough plans for the company’s resources within the scope of the logistics strategy ( Vollmann et al. , 2005 ). The missing tactical level means that there is a risk of procuring logistics services that are misaligned with the BC’s operational characteristics. Therefore, the logistics outsourcing decision needs to be rooted in a company-level logistics strategy ( Selviaridis and Spring, 2007 ), which guides decisions at the tactical and operational levels of the BC ( Thunberg and Fredriksson, 2018 ). The purpose of this study is thus to explore how to organize the logistics outsourcing decision at strategic, tactical and operational levels.

The purpose is fulfilled through a case study of a large construction corporation’s two sister companies: the BC and the construction equipment rental company (CERC). The BC has a history of different approaches to logistics development over the years, including an attempt to internalize logistics and more recently to outsource logistics. Recently, the CERC has acquired an LSP to offer third-party logistics services to its sister companies within the corporation.

2. Logistics outsourcing decision

2.1 logistics outsourcing in construction.

The decision to outsource logistics can be made for several reasons. A contractor can view an LSP as a substitute for investing in the resources and capabilities needed to manage logistics efficiently in construction projects ( Ekeskär and Rudberg, 2016 ) or as an opportunity to learn from a specialized LSP that already possesses such resources and capabilities that facilitate economies of scale ( Sundquist et al. , 2018 ). However, while lack of internal logistics capabilities can be in favour of outsourcing, another factor influencing the decision to outsource logistics is the logistical complexity of the project. Lindén and Josephson (2013) found that the lower complexity in repetitive projects (e.g. residential buildings and hotels) is in favour of logistics outsourcing. Therefore, there are two main dimensions that determine whether a contractor should outsource logistics to an LSP or keep the logistics as an internal function: the level of logistics capability of the contractor and the level of logistics complexity of the project.

Logistics complexity depends on several factors that influence the logistics outsourcing decision. The typical factors described in the literature are product, process and network characteristics ( Wiengarten et al. , 2017 ). Product characteristics refer to the special considerations that need to be taken in transportation, storage and handling of materials ( Rao and Young, 1994 ) and the product structure ( Hofer and Knemeyer, 2009 ). Physical properties of goods mainly influence the ability of a client to control the quality of products, which can provide incentives to retain physical logistics tasks in-house. On the other hand, complex product structures demand high service levels to ensure timely replenishment of components and materials, which is in favour of logistics outsourcing ( Bolumole, 2003 ).

Process characteristics comprise how critical timely deliveries are to the point of consumption (e.g. a production task) and the predictability of demand for materials and components ( Rao and Young, 1994 ). The unsteady demand of materials and components in site production is in favour of small lot sizes and frequent replenishment ( Schonsleben, 2000 ). As such, this requires a higher degree of coordination in the supply chain, which is in favour of outsourcing logistics for the client ( Bolumole, 2003 ).

Supply network characteristics are defined as the geographical dispersion of suppliers and the type of business relationship ( Hofer and Knemeyer, 2009 ). The geographical dispersion of suppliers determines the number and distance to nodes in the supply network. An LSP can be used in situations where network complexity is high, and the client does not possess the sufficient capital, capability and/or facilities to manage the wide dispersion of material flows ( Rao and Young, 1994 ). For instance, a contractor can use a construction logistics company that channel deliveries through a terminal, thus reducing the number of deliveries to the site ( Janné and Fredriksson, 2022 ). Besides the potential operations-related reasons for logistics outsourcing, experiences from previous business relationships with LSPs can determine whether a client favour outsourcing logistics or relying on in-house capabilities ( Rao and Young, 1994 ). Construction projects are a typical example where contractors and sub-contractors have been unfamiliar with logistics service arrangements, which has led to scepticism in relying on LSPs ( Ekeskär and Rudberg, 2016 ).

2.2 Logistics organizations designs

The non-supply chain management oriented is characterized by its absence of a logistics or supply chain department. Logistics activities are performed in the line organization within each functional area without the use of specialized logistics personnel.

In the functional type, logistics is separated into its own functional area, i.e. it has the same status as production, marketing and sales.

The matrix channel type is similar to the functional type, but rather than having the role as a functional area, it focuses on cross-functional coordination and takes a boundary-spanning role.

In the process staff organization, the logistics department is a form of internal consultant, where logistics activities are executed by unspecialized line staff of each functional area, but with the support of logistics specialists.

In the integrated line organization, the logistics department is positioned close to the strategic apex in the organizational hierarchy. In this type of logistics organization, the logistics manager possesses a senior management role and is typically part of the top management team, whereas day-to-day logistics tasks are performed in the line organization.

Because building construction is a project-based, engineer-to-order type of production, it is uncommon to find logistics departments at the central company-level or as a functional area within BC organizations ( Haglund et al. , 2022 ). Many BCs’ logistics organizations are therefore project-based versions of the non-supply chain management-oriented organizational type ( Kim, 2007 ) where logistics is managed decentralized at the project level ( Dubois et al. , 2019 ). This type of logistics organization design favours logistics outsourcing due to the lack of adequate internal logistics resources needed to achieve economies of scale ( Daugherty and Dröge, 1997 ). Projects need to bear their own costs, and when the cost of logistics resources are allocated to the projects rather than to the logistics department at the central level, outsourcing becomes a means of increasing specialization and achieving economies of scale in the absence of internal logistics resources ( Sundquist et al. , 2018 ).

2.3 Organizing construction logistics outsourcing

In the design of the logistics organization and the decision whether to outsource logistics or not, the latter is typically described as preceding to the former ( Daugherty and Dröge, 1997 ). The outsourcing decision thereby precedes structure. Non-supply chain management-oriented and/or staff-oriented logistics organization structures are the result of a decision to outsource logistics. When logistics is outsourced, there is no need for the buying company to set up corresponding logistics capabilities in-house. Functional logistics organization types will however outsource logistics to a lower degree.

However, it is not possible to rule out the possibility that the structure does not follow the outsourcing decision because a change in structure may incur the need to change the decision. As such, rather than being unidirectional, the relationship between logistics organization design and logistics outsourcing is bidirectional, where an existing logistics organization structure may influence the decision to outsource logistics. The structure of the logistics organization in BCs is in turn influenced by other factors than logistics outsourcing decisions, for instance, the degree of logistics complexity and predictability generated by the number and variety of products, the production strategy (make-to-order/make-to-stock), interdependence between the logistics function and other functional areas ( Persson, 1978 ; Haglund et al. , 2022 ). Such contextual conditions can therefore influence the logistics outsourcing decision via the logistics organization design and vice versa.

3. Research design and method

This study was based on a single-case study design ( Yin, 2018 ), where the interaction between the BC’s and the CERC’s strategic, tactical and operational levels was the unit of analysis (see Figure 1 ). The focus of the empirical investigation was how the BC and CERC organized logistics outsourcing at the three levels. In line with the recommendation by Van de Ven (1992) , the research is a combination of a retrospective perspective and real-time observation of the BC’s approach to logistics outsourcing, which led to the CERC becoming an LSP. The longitudinal data was collected several years prior to the field studies that constitute the empirical foundation of this study. The longitudinal data was used to contextualize the current organization of logistics outsourcing between the BC and CERC by following the events that had led up to the present situation. Therefore, even though the study was not designed as a longitudinal study in a strict sense, it carried elements of longitudinal data while studying the organization of logistics outsourcing at different organizational levels in real time.

3.1 Data collection

Different methods were used to collect data, although in-depth interviews were the primary source of data. Table 1 summarizes the data collection methods used in the study and which organizational level the data was used for. For the interviews, they ranged from being unstructured interviews with key informants at an early stage of the research process to explore the case to semi-structured interviews in a later stage as the research problem became clearer. More importantly, the data collection strategy aimed to capture the perspective of the BC and the CERC, and the strategic, tactical and operational decision levels. As such, the researchers used a contact person at the BC (referred to as the logistics developer in Table 1 ) who referred the researchers to suitable persons to talk to in the BC or CERC. The logistics developer thereby assisted in finding suitable candidates to interview that met the researchers’ sampling criteria ( King et al. , 2018 ).

Other data sources used were documents and direct observations. The documentation was retrieved from the BC and the CERC and included information about the BC’s past, current and planned (future) logistics organization, standard operating procedures and routines at the BC and descriptions of the CERC’s logistics services. One site visit at an ongoing construction project recommended by the BC’s logistics developer was conducted. In the project, the BC had one of their project logistics specialists working with site, production and delivery planning, while they also used the CERC’s logistics services, e.g. the CERC’s planning system and logistics specialists. The site visit provided valuable input on how the BC could use the CERC’s logistics services.

3.2 Data analysis

The analysis procedures were partly deductive and partly inductive. Initially, the researchers formed tentative propositions regarding how construction equipment rental companies could become LSPs. During the process of collecting and analyzing the data, these propositions were revised. This iterative process is referred to as “explanation building” ( Yin, 2018 ). For instance, in the case study, the study initially focused on the CERC’s new service development. However, the initial interviews with key informants at the CERC suggested that the BC played a large role in what services they developed. As such, the researchers partly abandoned the notion of new service development and instead shifted the focus towards the BC’s logistics organization and the CERC’s service offerings.

Furthermore, the initial screening of documentation suggested that the logistics outsourcing arrangement required attention on different organizational levels. Hence, the data analysis proceeded as thematic coding ( Flick, 2018 ), in which short case descriptions were created for each interview. This description included a summary of what the interview dealt with and how it was related to the overall purpose of the study (i.e. whether the respondent worked at the BC or the CERC, and at which organizational level the respondent was involved). The result of this is outlined in the right part of Table 1 with the perspective of each data source. Finally, the case descriptions were compiled into the findings that covered the strategic, tactical and operational levels at the BC and the CERC.

4. Findings

The following sections present the case study based on the findings from the interviews, site visits and documentation. Furthermore, the relationship between the BC and the CERC is presented using information about two main components within the outsourcing relationship: the BC’s internal logistics organization and the CERC’s service offerings. Finally, the findings are synthesized by presenting the BC–CERC dyad.

4.1 Logistics development in the construction corporation

The BC and the CERC are part of a larger construction corporation. The BC is a general-purpose contractor that designs and builds multi-family residencies, industrial buildings, commercial buildings and public buildings (e.g. hospitals, schools and elderly homes). They have been working sporadically with logistics development projects since 2008, but it has never fully gained traction within the organization. They put in considerable effort between 2008 and 2015, but this lost ground when the logistics manager at the time retired. Instead, the purchasing manager at the time started up a central logistics function to drive the company’s logistics development. In 2018, a logistics developer was hired to pick up where the former logistics manager had left off. The logistics developer made a thorough analysis of the company’s previous undertakings and their current situation. In particular, the logistics developer investigated what types of material and resource flows the BC typically had in their projects, what supplier base they had, the existing internal logistics capabilities within the construction company’s subsidiaries and started working towards an understanding for what logistics services were needed in their typical projects to be able to find a supplier of said services. The logistics developer identified and categorized five vital flows, i.e. site establishment resources , machine resources , project-specific materials , consumable materials and waste (1 in Figure 2 ). In 2020, this resulted in a vision; all projects should at least consider how the five identified flows were to be managed as part of planning the construction projects. However, this could not be integrated into the contracting business area with its focus on traditional contracting services. Instead, the CERC was approached because they already offered all these services, except for logistics (2 in Figure 2 ).

The CERC is one of Scandinavia’s largest companies in construction equipment rental, crane rental and other construction-related services. They already had the ability to manage the machinery and establishment resource flows, and they also provided a solution for monitoring energy efficiency, etc. on site and added this as part of their logistics service offerings (3 in Figure 2 ). In addition, the CERC partnered with a supplier of a smart delivery container where consumable materials could be delivered using an app that unlocked the container from the outside, enabling the suppliers to deliver consumables contactless. The focus from the CERC was thus primarily on physical assets and providing these types of services once the projects were up and running.

However, even though logistics is a large part of the CERC’s daily operations, they lacked more analytical and planning-based capabilities. As such, the CERC (in collaboration with the contractor’s logistics developer) started investigating if there were any logistics planning systems that could be licensed and supplied to the construction projects through the CERC. They entered discussions with an LSP who had a well-developed planning system and found that the owner of the LSP company was planning to sell the company and retire. A decision was made, and the CERC acquired the LSP in 2021 (4 in Figure 2 ), thus gaining the planning system and logistics analysis capabilities needed. The logistics analysis capabilities alongside the planning system and the physical assets the CERC already possessed were presented as an initial logistics service offering to the contractor’s logistics developer who gave input on what was needed in terms of logistics services in the projects (5 in Figure 2 ). These logistics services are now packaged as the logistics service offerings that the construction projects can choose to use (6 in Figure 2 ).

4.2 The building contractor’s logistics organization

The BC’s previous attempts with logistics development had set out to set up a logistics organization within the company, but this was never realized due to the failed implementation of the strategy and the previous logistics manager’s retirement in 2015. As such, the BC had no one in the organization that owned and maintained logistics set-ups at a company level. Yet, the BC had a need for basic logistics services, such as delivery planning, site disposition planning and intermediate storage. In response to these requirements, the logistics developer at the company initiated the development of a logistics setups configurator. The configurator, which is inspired by product configurators in terms of handling constraints and combinations of modules, aims to maintain a certain degree of flexibility in designing project-unique logistics set-ups based on a set of predetermined services. For instance, in projects where the BC already has a project logistics specialist, this option is greyed out in the configurator. This flexibility in designing logistics setups is deemed important to the BC because their projects vary in size, complexity and availability of logistics resources.

Currently, the BC does not have a formal logistics department, but the organization constitutes the logistics developer working at the corporate level, and several logistics specialists working at the regional and the project levels. The logistics developer mainly works with the long-term, strategic, logistics development. The project logistics specialists work in projects from start to end as expert support for site management and as a hub for site management and the CERC’s logistics specialists when these are used. In general, the BC lacks presence at strategic, tactical and operational levels due to the small number of logisticians relative to the company size. As such, the logisticians in the company’s current logistics organization has limited influence on the overall organization. However, the absence of logisticians is most profound at the tactical level, which corresponds to the BC’s regional divisions. Although there are routines and standard operating procedures across the company, the regional divisions operate autonomously to a great extent. A key point is that the BC’s core business (i.e. contracting services) takes place at this level where traditional roles dominate, such as regional managers, project managers and site managers. The tactical level can be described briefly as a regional manager who is responsible for tendering procedures and decides whether to place a bid or not, a regional operations manager who is responsible for business development and sales and operations planning of the projects in their regional area and a project is assigned to a project manager who is responsible for master planning of the project in terms of costing, purchasing, scheduling and client relationships. The absence of logistics at a regional level has not gone unnoticed. The logistics developer is planning on strengthening the regional divisions across Sweden with regional logistics managers and project logisticians in the upcoming five years.

4.3 The construction equipment rental company’s service offerings

The CERC has been offering logistics services since 2021 when they acquired an LSP. As the CERC is part of the construction company corporation, they had access to business area managers to get their input on what type of services are needed for the contractor’s different project portfolios. During the service development, the CERC worked closely with the contractor’s logistics developer, housing developers, business area managers and project managers to develop service packages. An issue that the CERC identified was that even though they are part of the same corporation, the construction industry’s local character meant it was difficult to reach all the regions of the contractor to pitch their service offerings. This in turn meant that the CERC started to focus more locally from their different subsidiaries, using them as sales organizations.

The CERC took its departure from what they already knew and offered to their customers. The philosophy from the CERC’s point of view was that “by paying a little more initially, we can reduce the total cost of operations for the construction projects”. This philosophy has in the past led the CERC to develop solution-based service offerings related to site establishment and machinery resources, taking total ownership of the site establishment process. Example of this is that the CERC has equipped all their heaters with sensors and remote controlling to be able to keep temperatures constant during concrete drying processes or to lower the indoor temperature of buildings when craftsmen are not on site in evenings and weekends to reduce projects’ total energy consumption. This not only creates value for the construction projects but also gives the CERC an overall control of their resources and assets. In addition, by taking the overall responsibility for delivering and retrieving machinery from sites based on the progression plan of the projects, the CERC has been able to reduce their tied-up capital and increase the occupancy rate of assets.

The CERC’s preferred trajectory is to become a solutions supplier, providing logistics services that can manage the five flows defined by the contractors’ logistics developer ( site establishment resources , machine resources , project-specific materials , consumable materials and waste ). As such, the CERC targets municipalities and large housing developers in their marketing efforts and prefers not to bid for procurement proposals unless they can be a solutions supplier. If, for instance, they are approached with a procurement proposal regarding on-site materials handlers, they prefer not to invest time in making an offer. However, the CERC is aware that not all construction projects have the need for all logistics services they offer. They thus work to develop service packages that can be of value in different project settings. An example of this is the logistics planning system that was acquired with the acquisition of the LSP company: the aim is to develop this system and to provide it in small, medium and enterprise versions to cater to different project sizes’ needs.

With the acquisition of the LSP came some more hands-on construction logistics know-how in the form of LSP employees joining the CERC. This means that the CERC can offer logistics analysis as part of their service offerings. As mentioned previously, the CERC wants to be included early in the project planning process and by offering the analytical work, they can ensure that they can affect the construction projects positively from a logistics perspective. The analysis also includes offering recommendations on services and service providers that the CERC themselves cannot offer. As the construction projects progress, the CERC provides continued analytics to show the value that the construction logistics services has given the project. The goal of these analytics is twofold: to show the value created for the project, but more importantly, to increase the logistics awareness in the construction project managers and to drive home the point that well-functioning logistics is a necessity for a well-functioning construction project.

4.4 Building contractor–construction equipment rental company dyad

Figure 3 illustrates the BC–CERC dyad, including key persons in the BC and the CERC and their position in the organizational hierarchy. The CERC has a similar structure to the BC in terms of geographical divisions. At the strategic level, there is a business developer that focuses on developing the logistics service offerings. The business developer is supported by an operations manager, whose main responsibility is the delivery of logistics services for the CERC’s logistics business unit. At the operational level, there are regional managers who work more closely with delivering services within a geographical region.

There are clear interfaces between the companies’ strategic and operational levels. There is close collaboration at the strategic level, where the logistics developer and the business developer have put in joint efforts into designing the CERC’s service offering in parallel with the BC’s logistics configurator. At the operational level, the BC’s project logistics specialists collaborate with an operations manager at the CERC. At the tactical level, the CERC’s operations manager does not have a counterpart because this level does not really exist in the BC. The logistics specialist (positioned to the left in the figure in the dashed box) works in multiple projects in one regional division in Sweden, which could be regarded as the tactical level, but there is no communication between them and the CERC’s tactical level. Furthermore, most regional divisions in the BC do not have a corresponding role. Hence, the tactical level in the BC’s logistics organization hierarchy is greyed out.

5. Discussion

The purpose of this study was to explore how to organize the logistics outsourcing decision at strategic, tactical and operational levels. The BC’s use of the CERC as an LSP differs from transactional, arms-length relationships in that it is a systematic use of an LSP. As such, this use of an LSP goes beyond merely buying themselves free from managing logistics, where logistics is not considered as a cost only, but that it adds value to their operations ( Tetik et al. , 2022 ). However, at a strategic level, there is still a mismatch between the BC’s need for logistics and the logistics services offered by the CERC. The BC’s logistics configurator is a means of developing customized logistics set-ups for each project, where some services can be excluded if they already possess corresponding capabilities in-house. On the other hand, even though the CERC recognizes that not all their services are required in every project, they clearly favour larger contracts with a wide variety of services that are bundled together. From a corporate perspective, this raises questions of what to prioritize because the two companies are part of the same corporation: profitability of the BC’s projects or profitability of the CERC? Typically, standardized “package” solutions are preferred when they serve the main contractors’ project portfolios while customized solutions are intended for unique, one-off projects ( Fredriksson et al. , 2021 ). As such, the CERC should be able to offer package solutions of logistics services to the BC. The problem with this set-up is that the BC lacks organizational procedures and routines for logistics which, in the absence of logistics expertise at the BC’s tactical level, results in that the BC only procures the CERC’s logistics services on a project-to-project basis. In other words, there is no dialogue between the BC and CERC at a tactical level, which limits the sales volumes for the CERC’s logistics services.

Tactical level planning in engineer-to-order contexts, such as construction, is characterized by a high degree of uncertainty ( Shurrab et al. , 2020 ). However, preliminary production plans and rough capacity requirements estimates can be derived from previous projects with similar characteristics ( Bhalla et al. , 2022 ). The BC thus needs to build up logistics organizations at tactical levels, corresponding to the BC’s regional divisions, to increase the scale of logistics services purchased from the CERC. This enables the CERC to increase sales volumes of their logistics services and the use of standard logistics service package set-ups. There is a tendency among BCs to focus on either the strategic corporate level or the operational project level ( Elfving, 2021 ). The tactical level is an important means of linking strategic plans of available resources within the company with project-level plans of required resources to carry out the projects ( Thunberg and Fredriksson, 2018 ).

At the operational level, the question is whether the CERC should take a more comprehensive role in coordinating production with transportation, delivery and materials planning, whereas the BC’s logistics specialists should work at higher planning levels. Currently, the BC’s project logistics specialist coordinates project-level production plans with material deliveries. The CERC’s logistics specialists are not involved in the site production but are involved in activities upstream of the construction site, such as planning of transports from suppliers to an intermediary storage or directly from suppliers to the construction site. Previous research indicates that logistics specialists that pursue multiple tasks that are interdependent (e.g. coordinating deliveries with production activities) can improve efficiency in the supply chain and at the construction site by reducing the number of transports while retaining service levels to the site production ( Dubois et al. , 2019 ). Although this is a feasible option for projects where the BC does not have a project logistics specialist, the CERC’s logistics specialist can be used as buffer resources during temporary periods of capacity constraints among the BC’s project logistics specialists. As such, the CERC needs to ensure that they have sufficient capacity to provide buffer resources for BC’s projects, whereas BC needs to carefully consider which projects they should allocate internal logistics resources to.

The findings from the case study suggest that both the BC and the CERC need to ensure that they have adequate logistics and service delivery capabilities, respectively, at all three organizational levels. At a minimum, the BC needs logistics capabilities at the strategic and tactical levels due to the company’s geographical dispersion. There are several different organizational configurations that are possible when the BC uses the CERC’s logistics services. Daugherty and Dröge (1997) identified two generic types that influence the degree to which logistics services should be outsourced: the “staff only” configuration and the “staff/line” configuration. These two configurations correspond to the functional type and the process staff type as defined by Kim (2007) . In the process staff type, the BC would perform strategic and tactical logistics planning activities, whereas the CERC handles logistics activities at the operational project level. In the functional type, the BC would primarily use internal logistics personnel to perform logistics activities at the operational level or a combination of the BC’s and CERC’s logistics resources. In general, the process staff type typically corresponds to a higher degree of logistics outsourcing, whereas the functional type corresponds to a lower degree of logistics outsourcing ( Daugherty and Dröge, 1997 ).

Even though the BC has a long history of trying to organize its construction logistics, the case study shows that there is still more work to do. Current efforts show the need for this work to be carried out in a structured way on the strategic, tactic as well as on the operational levels. However, as discussed by Sundquist et al. (2018) , managing logistics in-house can be difficult if the in-house logistics capabilities do not cover all three levels. This can lead to a situation where one person tries to tackle all issues at once, which we can see in the case of the BC. One logistics developer tries to develop logistics management routines for an entire corporation. Traditionally, not possessing the “right” logistics capabilities has been a contributing factor to outsourcing logistics to a third-party logistics (TPL) provider ( Selviaridis and Spring, 2007 ). Simultaneously, being overconfident in the in-house logistics capabilities can lead to a situation where a company does not know what to ask an LSP or TPL provider for ( Janné and Fredriksson, 2022 ), and this is where it becomes important that the BC and (in this case) the CERC work together to develop both the BC’s in-house logistics capabilities and the CERC’s logistics offerings. However, once again, the case study shows the importance of addressing logistics capabilities on all three organizational levels also in the BC–CERC dyad. Logistics outsourcing should be a strategic decision that is not delegated entirely to the project level. However, on the strategic level, there is a mismatch between what the BC requests and what the CERC wants to achieve from their standpoint. The BC wants modularized service offerings, whereas the CERC wants to be a solutions supplier. On the tactical level, there is no real dialogue due to the BC’s logistics developer focusing primarily on the strategic and tactical levels, i.e. the CERC does not have a counterpart within the BC’s organization. This is in line with what Elfving (2021) found; the tactical level is often forgotten in strategy development. Yet, this is the translation from strategy to operational level and should not be forgotten. Thus, the minimum level of logistics capabilities needed in-house is at the strategic and tactical levels. This allows the BC a chance to maintain an alignment between the use of logistics services and the operational characteristics. Mid-term planning is needed here to ensure that logistics resources are available at certain times of a construction project and not left idle at other times of the project ( Thunberg and Fredriksson, 2018 ).

The BC and CERC are both part of the same corporation, but from an organizational point of view, the respective logistics organizations are two small organizations within two large organizations within a large corporation. As such, the BC and the CERC must carry their own costs and deliver profits. Yet, there is an argument to be made for the BC and CERC collaborating to develop logistics capabilities within the two firms, as this can generate income for the CERC ( Fredriksson et al. , 2021 ) and lower costs for the BC ( Thunberg and Fredriksson, 2022 ). However, the corporation must be open to allow this collaboration in an area not seen as the respective firms’ core competence areas. If the BC and CERC are allowed to invest in developing collaborative construction logistics capabilities, the whole corporation can benefit from the collaboration.

6. Conclusions

The purpose of this study was to explore how to organize the logistics outsourcing decision at strategic, tactical and operational levels.

This study has shown that when organizing construction logistics services or set-ups, it is important to understand the connection between the strategic, tactical and operational levels within the organization, what logistics capabilities you possess within these levels and how these levels relate to one another. A suggestion is that the minimum level of logistics capabilities needed in-house is at the strategic and tactical levels to maintain alignment between the operational logistics characteristics of projects and the logistics services procured from an LSP. Understanding the in-house logistics capabilities will aid BCs in their outsourcing decision as it will help them realize what logistics capabilities they are lacking. Similarly, rental companies or LSPs need to understand what their customers (BCs) are requesting and adapt their service offerings to cater to the missing logistics capabilities of BCs. Even if the drive is there to develop and offer full logistics service solutions, this may not be what BCs or developers are looking to procure. It is thus important that CERCs or LSPs consider their customers’ in-house logistics capabilities as well and develop their service offerings in collaboration with BCs. To gain economies-of-scale in the construction logistics services offered, one suggestion is to develop modularized logistics services to allow BCs the chance to pick-and-choose the “correct” services from the project perspective.

Another important part of the outsourcing decision connected to the in-house logistics capabilities is to know what type of logistics organization aligns with the overall company logistics strategy. In this study, we suggest that BCs should aim for either a strategic/tactical process staff organization where operational construction logistics is outsourced to an external LSP or a functional type where BCs primarily use internal logistics personnel or a combination of internal and external personnel to perform logistics activities at the operational level.

There are inherent limitations to the single-case study approach in that a single case can only show the findings from that case. However, findings from this single-case study constitute a valuable starting point for further studies. To the best of the authors’ knowledge, there are no similar cases where a rental company that has become an LSP and a BC are part of the same corporation. The CERC is thus semi-internalized in the BC. Future studies should use multi-case designs that pursue theoretical replication by comparing the findings from this study with cases where logistics is fully integrated within the contractor’s organization and fully outsourced. Furthermore, this study has exemplified how the tactical level is overlooked amongst BCs. More research is needed to better understand the BC’s current practices on the tactical level and how these practices can be improved to foster better logistics management at the project level. Finally, rental companies face challenges in becoming LSPs. Their traditional equipment and machinery rental businesses differ from that of an LSP. Future research should investigate potential synergies and/or contradictions between the rental and LSP trades.

Unit of analysis in the single-case study

CERC’s development of “new” logistics service offerings

Logistics organizations and communication flows in the BC and CERC

Data collection methods

Data collection method	#	Time	Perspective
Data collection method	#	Time	Strategic	Tactical	Operational
Interviews with logistics developer at BC	4	30 min to 2 h	X	X
Interview with business developer at CERC	1	1.5 h	X
Interview with operations manager at CERC	1	1 h	X	X
Interview with project logistics specialist at BC	1	1 h			X
Interview with regional manager at CERC	1	2 h		X	X
Site visit at BC project	1	2 h			X
Documentation BC: strategy documentation, organizational charts, organizational procedures and routines	n.a.	n.a.	X
Documentation CERC: logistics service descriptions	n.a.	n.a.	X

Source: Authors’ own creation

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Acknowledgements

This research was supported by The Development Fund of the Swedish Construction Industry (SBUF), under grant 13843, and The Lars Erik Lundberg Foundation for Research and Education. The authors would like to thank the case companies and the key informants, for sharing data, experience and documents on the case study.

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Improving Construction Logistics a Case Study of Residential and Commercial Building Project

2020, International Journal for Research in Applied Science and Engineering Technology IJRASET

This study concerns logistics at the construction projects. Most construction projects suffer from unnecessary activities on site which indicates the need for improving construction logistics. Hence the purpose of this paper was to investigate, through site observations and interviews, the current logistics situation on the construction site and to suggest possible solution for improving construction logistics. The main focus of this study was on material deliveries and time that craftsmen spend on handling materials. The thesis concludes that skilled craftsmen are transporting the third part of all incoming interior materials by their selves. Due to poor logistics planning workers are also doing lots of rework and extra work. The study showed that, by implementing other logistics solutions, it is possible to reduce the production costs by 65 SEK/m2 of living area and also to shorten the production time by 3.3%. The study actualizes the importance of construction logistics which is often underestimated. The study also showed what consequences ineffective logistics solution could have on the construction project. While, on the opposite, proper logistics planning gives benefits to the project. I. INTRODUCTION A. General The construction industry is one of the most complex industries. The construction process consists of several phases where many different participants are involved during each phase. The uniqueness of this industry is that it is a project based industry, where each construction project could be considered as a temporary organization. However there is a similarity with other industries as well. The similarity is that all industries are interested in high production efficiency while keeping the overall costs as low as possible (Agerberg et al., 2010). Most construction projects are affected by several factors that have a high impact on the efficiency of the workforce by reducing their overall productivity. This affects quality, time and costs of the project. The reason for that is often poor management of materials, equipment and tools. Proper management of these three important components could increase productivity significantly. These components should be accurately managed on site, in order for the projects to be successful. (Almohsen, Ruwanpura, 2011) Due to its nature, the construction industry is one of the most challenging to work in. The information flow in construction is complex and the process is affected by various factors. One of these factors is logistics which is defined as the management of the flow of materials, tools and equipment from the point of release to the point of use. (European Construction Institute, 1994). As the construction industry is constantly developing, production costs are rising steadily as well, but the production efficiency and the way of working have not developed that much. Improving logistics by reducing activities that do not add value to the final product could be one possible solution to lower the production costs. Activities that do not add value to the final product are defined as "waste" which is directly related to the logistics issue. Waste has been studied earlier by among others Josephson and Saukkoriipi (2007) who concluded that it is possible to reduce the production costs with 30-35% by minimizing the total amount of waste.

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What Is Construction Logistics

Modified: December 7, 2023

Written by: Chloe Davis

Learn the importance of construction logistics in building construction projects. Explore the effective planning and coordination process for seamless project delivery.

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Introduction

Construction logistics is a crucial aspect of every building project. It involves the management and coordination of resources, materials, equipment, and personnel to ensure the smooth and efficient execution of construction activities. From the initial planning stages to the final delivery of a completed structure, construction logistics plays a vital role in optimizing productivity, minimizing costs, and ensuring timely project completion.

Construction logistics encompasses a wide range of activities, including procurement, transportation, inventory management, site layout, and waste disposal. By effectively managing these functions, construction companies can avoid delays, reduce construction waste, and maintain a safe working environment.

In recent years, the construction industry has witnessed significant advancements in technology and methodologies that have revolutionized construction logistics. From the use of Building Information Modeling (BIM) to automate project planning and visualization, to the adoption of GPS tracking systems for efficient vehicle routing, construction logistics has become more streamlined and data-driven than ever before.

This article explores the importance of construction logistics and the key components that contribute to its success. We will also delve into the challenges faced in construction logistics and discuss strategies for effective management. Additionally, we will examine real-life case studies that highlight successful implementation of construction logistics, as well as explore future trends in the field.

Whether you are a construction professional, a project manager, or simply curious about the complexities of building projects, this article will provide valuable insights into the world of construction logistics.

Key Takeaways:

Construction logistics is the systematic planning and management of resources, materials, and personnel, crucial for optimizing productivity, minimizing costs, and ensuring timely project completion in the construction industry.
Embracing advanced technology, collaborative approaches, and sustainable practices are essential for overcoming challenges and shaping the future of construction logistics, leading to greater efficiency and improved project outcomes.

Case Study 1: The Shard, London

The Shard, located in London, is one of the tallest buildings in Europe. Its construction presented unique logistical challenges due to its sheer height and central location. To overcome these challenges, the project team implemented innovative strategies:

Advanced Planning: The logistics team conducted detailed planning and sequencing of construction activities. They used BIM technology to visualize the project and identify potential obstacles or clashes before construction began.
Vertical Transportation: Given the height of the building, efficient vertical transportation was crucial. The project used a dedicated hoist system with multiple levels of elevators and cranes to ensure smooth movement of materials and workers throughout the building.
Just-in-Time Delivery: Due to limited space on the construction site, the logistics team coordinated just-in-time deliveries of materials. This minimized on-site storage and reduced the risk of damage or theft.
Off-Site Assembly: To expedite construction, certain components of the building were prefabricated off-site and transported to the construction site. This approach allowed for better quality control and faster installation.

The successful implementation of construction logistics enabled the completion of The Shard within the scheduled timeframe and budget, showcasing the importance of meticulous planning and innovative solutions.

Case Study 2: Panama Canal Expansion

The expansion of the Panama Canal involved the construction of new locks and the widening of existing channels. This complex project required sophisticated construction logistics due to its scale and geographical challenges:

Supply Chain Management: The logistics team established strong relationships with suppliers worldwide to ensure a steady and timely supply of construction materials. They implemented advanced tracking systems to monitor the movement of materials and mitigate logistical risks.
Optimized Transportation: The logistics team utilized a combination of land, water, and air transportation for the efficient delivery of materials. They developed detailed transportation plans, considering factors such as distance, weight, and road conditions to optimize routes and reduce costs.
Coordination with Stakeholders: Due to the involvement of multiple contractors and subcontractors, effective coordination and communication among stakeholders were key. Regular meetings, collaborative platforms, and clear communication channels were established to ensure seamless coordination of construction activities.
Risk Mitigation: The project team developed robust risk management strategies to mitigate potential challenges such as adverse weather conditions and labor fluctuations. Contingency plans were in place to address unforeseen events and maintain project progress.
Environmental Considerations: The logistics team implemented sustainable practices, such as recycling construction waste and utilizing eco-friendly transportation. They also adhered to strict environmental regulations to minimize the project’s impact on the surrounding ecosystem.

The successful completion of the Panama Canal expansion demonstrates the importance of effective supply chain management, stakeholder coordination, risk mitigation, and sustainability in construction logistics.

These case studies highlight the significance of meticulous planning, innovative solutions, and effective coordination in construction logistics. By learning from these examples, construction companies can apply best practices and strategies to overcome logistical challenges and achieve successful project outcomes.

Read more : What Is A Construction Laborer

Future Trends in Construction Logistics

The field of construction logistics is continuously evolving, driven by advancements in technology and changing industry trends. Here are some future trends that will shape the construction logistics landscape:

Automation and Robotics: The integration of automation and robotics in construction logistics will revolutionize processes and improve efficiency. Autonomous vehicles for material transportation, robotic arms for loading and unloading, and unmanned aerial vehicles (drones) for site inspections and inventory management are already being explored to enhance productivity and reduce labor costs.
Internet of Things (IoT) and Real-time Monitoring: IoT devices will play a crucial role in construction logistics by connecting various elements of the supply chain. Sensors and trackers embedded in materials, equipment, and vehicles can provide real-time data on location, condition, and performance. This data can be used to optimize routing, prevent theft or damage, and improve overall project management.
Artificial Intelligence (AI) and Predictive Analytics: AI algorithms and predictive analytics will enable construction logistics to anticipate and address potential issues before they arise. Through analyzing historical data, AI can predict material requirements, optimize schedules, and identify potential risks. AI-powered optimization algorithms can optimize logistics plans by considering various factors such as cost, time, and environmental impact.
Green and Sustainable Practices: The demand for sustainable construction practices will continue to influence construction logistics. Green transportation methods, such as electric vehicles and alternative fuels, will become more prevalent. Logistics plans will incorporate eco-friendly practices, including waste reduction, recycling, and carbon emission reduction strategies. Sustainable supply chain management will be a key focus for construction companies.
3D Printing and Modular Construction: 3D printing and modular construction techniques will transform the construction industry, including logistics. With the ability to create building components on-site or off-site, supply chain logistics will be simplified, transportation costs will be reduced, and construction timelines will be significantly shortened. The logistics focus will shift towards efficient delivery and assembly of prefabricated modules.
Digitalization and Integrated Platforms: Comprehensive digital platforms that integrate various aspects of construction logistics, such as procurement, tracking, scheduling, and communication, will become more common. These platforms will enable seamless collaboration and data sharing between project teams, suppliers, and logistics providers, improving transparency and efficiency throughout the construction process.
Augmented Reality (AR) and Virtual Reality (VR): AR and VR technologies will play a significant role in construction logistics. These immersive technologies can assist in site planning, equipment operation, and training. Virtual simulations can be used for training and troubleshooting, reducing the risk of errors and improving safety.
Drone Technology: Drones will continue to revolutionize construction logistics. Besides inventory management and site inspections, drones can be used for aerial surveys, mapping, monitoring construction progress, and even aerial transportation of lightweight materials. They offer fast and cost-effective solutions for various logistics tasks.

The future of construction logistics is exciting, with technology-driven advancements and a growing emphasis on sustainability and efficiency. By embracing these trends, construction companies can stay ahead of the curve and optimize their logistics processes to deliver projects more effectively and sustainably.

Construction logistics plays a critical role in the success of building projects. It involves the systematic planning, coordination, and management of resources, materials, equipment, and personnel to ensure the smooth execution of construction activities. By optimizing construction logistics, companies can achieve cost savings, improve productivity, enhance safety, and deliver projects on time and within budget.

Throughout this article, we have explored the key components of construction logistics, the challenges encountered, and the strategies employed to overcome them. We have also examined real-life case studies that exemplify effective construction logistics in action.

The future of construction logistics holds exciting opportunities, driven by advancements in technology and changing industry trends. Automation, artificial intelligence, IoT, and sustainable practices will shape the evolution of construction logistics, leading to greater efficiency, improved decision-making, and enhanced environmental stewardship.

In conclusion, construction logistics is a complex and crucial aspect of building projects. It requires careful planning, effective coordination, and a proactive approach to overcome challenges and optimize operations. By embracing the latest trends and technologies, construction companies can streamline logistics processes, improve project outcomes, and stay ahead in an increasingly competitive industry.

As the construction industry continues to evolve, the importance of construction logistics will only increase. By recognizing its significance and investing in its optimization, companies can ensure successful project delivery, client satisfaction, and long-term success in the dynamic world of construction.

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Case Study: Yusen Logistics Co., Ltd.

Supporting customers in reducing GHG emissions with sustainable aviation fuel

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Yusen Logistics makes the most of its network of 650 bases in 46 countries and regions worldwide to provide customers with optimized solutions, including ocean and air freight forwarding, warehousing, distribution services, and supply chain management. In order to meet the request of customers who wish to visualize and reduce greenhouse gas (GHG) emissions, the Company is introduces sustainable aviation fuel (SAF) for air freight forwarding services in Japan, leading the country in environmental responsibility KPMG Consulting helped designing this service model and preparing for its implementation.

[Interviewees]

Ms. Irene Tung , Head of Supply Chain Solutions Group, Yusen Logistics Global Management Limited Mr. Kevin Chia , Deputy Head of Air Freight Forwarding Group, Yusen Logistics Co., Ltd.

Naohiro Kaneko , Partner, KPMG Consulting Co., Ltd. Yusuke Nakano , Associate Partner, KPMG Consulting Co., Ltd.

Right: Ms. Irene Tung, Yusen Logistics Global Management Limited/ Left: Mr. Kevin Chia, Yusen Logistics Co., Ltd.

Air transport service using SAF to contribute to sustainable logistics

It is estimated that the greenhouse gases (GHG) emitted in the logistics business sector accounts for nearly 15-20% of total GHG emissions in the world. For this reason, reducing GHGs emitted during air, road, and ocean transport is becoming one of the important issues in realizing carbon neutrality by 2050.

SAF utilization is attracting public attention as a means of reducing GHG emissions during air transport. SAF is a general name for sustainable aviation fuel manufactured from recyclable raw materials, including waste oil such as used cooking oil, plants, and waste plastics, rather than kerosene produced from petroleum (conventional jet fuel).

One benefit of using SAF is to contribute to reducing GHG emissions (Scope 3) for shippers that utilize the services of SAF-uplifting airlines. In general, airlines who uplift SAF will issue a certificate, showing as environmental value, the amount of GHG emissions reduced through the use of SAF compared to kerosene-based jet fuel. Using such a certificate as evidence, shippers can claim the amount of GHG emissions reduced for air transport activity.

Besides offerings directly from airlines to the downstream, forwarder-oriented services utilizing the environmental value brought about by SAF have already begun. Yusen Logistics has started to work on such services in Japan earlier than market peers in the country.

“We are providing one-stop solutions to optimize the supply chain management of customers. In order to not only respond to conventional needs for faster, less expensive services but also help customers meeting the new challenge of realizing carbon neutrality, we have launched new services using SAF,” said Ms. Irene Tung, who oversees the Supply Chain Solutions Group at Yusen Logistics Global Management Limited.

Ms. Irene Tung, Yusen Logistics Global Management

Yusen Logistics is a forwarder that provides freight forwarding services to transport cargoes on behalf of shippers. While not operating as own means of transport, its role is to transport shippers’ freight by entering into agreements with airlines/shipping companies. Launched by Yusen Logistics in April 2023, “Yusen Book-and-Claim” is an add-on forwarding service in which the company uses the environmental value generated from airlines who use SAF as part of the aviation fuel for the respective amount of freight transported by air, and allocate to shippers with their desired amount of reductions (SAF allocations).

[Service Model of "Yusen Book-and-Claim"]

Case Study: Yusen Logistics Co., Ltd._Figure1

Source: KPMG Consulting

“Many airlines have already started to uplift SAF. The SAF procurement cost is extremely high, at several to ten-odd times that for kerosene, but SAF helps reducing GHG emissions by about 80%. Since SAF is one of the few measures that are expected to be effective in realizing carbon neutrality for air transport, the Japanese government has set the goal of replacing 10% of conventional aviation fuel with SAF by 2030. It can be said that "Yusen Book-and-Claim" is a pioneering service in Japan that will contribute to achieving this goal,” said Naohiro Kaneko, Partner at KPMG Consulting.

Issuing Yusen Logistics’ own certificates to visualize GHG emissions during air transport

In addition, Yusen Logistics has actively worked to realize carbon neutrality, including opening to the public “CO2 e-calculator,” a system to calculate GHG emissions during transport.

“Our current environmental goal is to achieve net-zero emissions for all of the services we provide to customers by 2050. The important direction is to make all means of transport such as air, ocean, and road more efficient and at the same time with reduced GHG emissions,” added Ms. Irene Tung.

Such an advanced attitude led to an initiative in which Yusen Logistics provided services using SAF earlier than any other forwarders in Japan. However, the content of the "Yusen Book-and-Claim" service immediately after its original launch was not satisfactory enough to Yusen Logistics.

Mr. Kevin Chia, Yusen Logistics

“At first, together with SAF allocations, we delivered the documents provided by airlines which certified the amount of GHG emissions reductions. However, since the basis for calculating emissions varied from one airline to another, this could potentially cause confusions to customers. Therefore, we considered whether we could issue our own GHG emissions reductions certificates, aggregating information from each airline.”

Thus said Mr. Kevin Chia, Deputy Head of Air Freight Forwarding Group at Yusen Logistics, who was involved in developing the "Yusen Book-and-Claim" service.

Issuing a GHG emissions reductions certificate independently required third-party certification to support its content trustworthiness. In order to acquire such certification, Yusen Logistics requested support from KPMG Consulting, which has an extensive track record in SAF-related consulting.

Explaining the reason Yusen Logistics chose KPMG Consulting as a partner of this project, Mr. Chia recalled, “KPMG Consulting responded most proactively and specifically, and we highly evaluated such a swift response. They understood the circumstances of SAF in Japan, not to mention trends in Europe and North America, which were both more advanced in SAF, and we felt they were reliable.”

Bringing the total strength of KPMG together to sort out challenges for accounting and tax process

Thus, Yusen Logistics started to deliver its own GHG emissions reductions certificates as a refined service of “Yusen Book-and-Claim,” in January 2024. This represented a Japanese forwarder’s pioneering initiative.

“We aim to become the world's preferred supply chain logistics company. To that end, we will actively take on new challenges earlier than anyone else in the industry. I believe that the ability to issue more user-friendly GHG emissions reductions certificates to customers independently is a major factor for distinguishing Yusen Logistics from others,” said Mr. Kevin Chia.

In addition to third-party certification for GHG emissions reductions certificates, Yusen Logistics asked KPMG Consulting for various kinds of support when expanding its "Yusen Book-and-Claim" service scope. One of the extended support was to sort out challenges for the handling of accounting and tax process for the SAF environmental value procured from airlines.

“The SAF price includes not only the value of fuel itself but also environmental value, which shows how much environmental impact can be reduced by using SAF. There is no established international rule to calculate such environmental value, presenting challenges for accounting and tax process,” explained Yusuke Nakano, Associate Partner at KPMG Consulting.

KPMG Consulting worked with KPMG AZSA LLC and KPMG Tax Corporation to support in designing the end-to-end business processes and IT tools associated with the provision of the "Yusen Book-and-Claim" service by comparing environmental value with economic value and related systems in Japan and abroad.

”This is a high-profile service that affects the entire value chain from fuel manufacturers and airline companies to forwarders and shippers, but since the business scheme was still being developed, a wide range of issues, including accounting and tax affairs, needed to be examined. We are very honored that we were able to involve ourselves in supporting Yusen Logistics’ challenging initiative at the dawn of this new business area as it was expected to continue undergoing changes in the future. We hope that we will be able to contribute to ensuring the sustainability of the logistics business as typified by SAF utilization in the years to come,” commented Kaneko.

As there are still many uncertainties around SAF in Japan, including its systems, Yusen Logistics took an advanced stance and already started to provide SAF-related services.

Ms. Tung said, “Yusen Logistics’ initiatives toward net-zero emissions and the areas in which it should meet customer needs are not limited to air transport. In the future, as a supply chain logistics company that develops business globally, we will continue to consider services like "Yusen Book-and-Claim" in ocean and road transport as well. We hope that KPMG Consulting will continue to offer useful suggestions.”

Back right: Naohiro Kaneko, KPMG; back left: Yusuke Nakano, KPMG/ Front left: Mr. Kevin Chia, Yusen Logistics; front right: Ms. Irene Tung, Yusen Logistics Global Management

KPMG Consulting will contribute to realizing a sustainable society by providing comprehensive support to Yusen Logistics and other customers.

Assessment and management of construction and demolition waste in tier 2 cities of Karnataka, India: a case study of Hubli-Dharwad and Davanagere

Published: 05 October 2024
Volume 196 , article number 1022 , ( 2024 )

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Kiran Dasalukunte Ananda 1 ,
Pushkara Sompura Vishwanath 1 ,
Jitvan Ramesh 1 &
Aparna Puradahalli Muthanarasimha 1

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The present study examines the current practices for managing construction and demolition waste (CDW) in two tier-2 cities of Karnataka state: Hubli-Dharwad and Davanagere. The research highlights the quantification, characterization, and effective management strategies for CDW. CDW dumping sites were identified through field visits conducted across all wards of the cities and recorded using a mobile-based app. At each site, data were collected on the types of vehicles dumping CDW, the frequency of dumping, the volume of waste in the vehicles, and the quantity of CDW removed for reuse. The dumping sites were categorized into large, medium, and small based on the area and volume of waste. In total, 130 unauthorised dumping sites were identified in Hubli-Dharwad and 62 in Davanagere. The study estimated that Hubli-Dharwad generates approximately 607 tonnes per day (TPD) of CDW, while Davanagere produces around 287 TPD. The characterization of CDW revealed that in Hubli-Dharwad, CDW consists of 14.4% concrete, 25.5% brick and mortar, 39.1% soil and aggregates, and 20% other materials. In Davanagere, the composition includes 19% concrete, 29% brick and mortar, 38% soil, and 14% other materials. Based on these findings, the study proposes a system for the collection and transportation of CDW and recommends suitable recycling technologies. While the approach outlined in this paper is well-suited for urban local bodies to assess CDW, the data on CDW reuse and recycling is primarily based on informal practices. This makes accurate quantification challenging and subject to variation over time due to a lack of regulatory oversight. Additionally, the study provides only a snapshot of CDW generation and management at a specific point in time, potentially missing seasonal variations or long-term trends in waste handling.

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A study on the waste generation rates and recycling potential for the construction and demolition waste in Dhaka, Bangladesh

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Acknowledgements

The authors express gratitude to Mr. Mallikarjun B.M. of Hubli Dharwad Municipal Corporation, Mr. Jagadeesh S.R. and Mr. Basavanna G.R. of Davanagere City Corporation, Commissioner, and all the dedicated staff of the respective ULBs for their invaluable assistance in conducting field studies and sharing crucial data. Special thanks to Amruth Kiran from the GSL Lab of IIHS, Bengaluru, for aiding in the preparation of location maps for the study. Additionally, appreciation is extended to the management of IIHS, Bengaluru, for their continuous encouragement throughout the course of this work.

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All authors contributed to the study conception and design. Material preparation, data collection and analysis were performed by Kiran Dasalukunte Ananda and Pushkara Sompura Vishwanath. The first draft of the manuscript was written by Kiran Dasalukunte Ananda, Jitvan Ramesh and Aparna Puradahalli Muthanarasimha and all authors commented on previous versions of the manuscript. All authors read and approved the final manuscript.

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Dasalukunte Ananda, K., Sompura Vishwanath, P., Ramesh, J. et al. Assessment and management of construction and demolition waste in tier 2 cities of Karnataka, India: a case study of Hubli-Dharwad and Davanagere. Environ Monit Assess 196 , 1022 (2024). https://doi.org/10.1007/s10661-024-13197-7

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There are several studies conducted in recent years that articulate novel methodologies in construction logistics scheduling; however, the industry still faces challenges in streamlining the whole ...
PDF Catalog of Construction Case Studies
If students ha ve a basic understanding of lean construction, users of the case study may wish to skip Section 1. In Section 2 of the case study, J. E. Dunn Construction has a contract for the renovation of three student housing buildings at Pittsburg State University. Situations are presented during preconstruction and project execution.
PDF Applicability of Logistics Management in Lean Construction: a Case
negative experiences of some construction companies presented briefly in three case studies and on experiences of companies from other sectors of the economy. KEY WORDS Logistics, supply chain, supply logistics, site logistics, lean construction, Brazil. 1 Civil Engineer, M. Eng. Candidate, Civil Construction Engineering Department, Escola
PDF Challenges in Transport Logistics for Modular Construction: A Case Study
a construction logistics model that can schedule deliveries and storage areas as well as logistics related information using lean construction principles. The underlying factor is to have better coordination among all the domain-speciﬁc stakeholders [10]. 3 Overview of the Case Study . 3.1 Background of Case Study
(PDF) SMART CONSTRUCTION LOGISTICS
The handbook first provides a description of the challenges of urban construction logistics and the governance of construction logistics. Secondly, it presents the Smart Governance Concept ...
A longitudinal study on logistics strategy: the case of a building
The purpose of this paper is to investigate the logistics strategy from a process of establishing fit perspective. analysed using a longitudinal single-case study for a period of 11 years (2008 -2019). Findings The case study reveals three main constraints to logistics strategy implementation: a dominant.
Organizing construction logistics outsourcing: a logistics strategy
The purpose of this study is thus to explore how to organize the logistics outsourcing decision at strategic, tactical and operational levels. The purpose is fulfilled through a case study of a large construction corporation's two sister companies: the BC and the construction equipment rental company (CERC).
Improving Construction Logistics a Case Study of Residential and
This study concerns logistics at the construction projects. Most construction projects suffer from unnecessary activities on site which indicates the need for improving construction logistics. ... 7.429 Volume 8 Issue V May 2020- Available at www.ijraset.com Improving Construction Logistics a Case Study of Residential and Commercial Building ...
Supply chain management in construction and engineer-to-order industries
The role of the third-party logistics providers is studied in the paper "Third-party logistics in construction: ... They provide results from a 2.5 years longitudinal case study of a hospital construction project. For the project, all manufacturers and supplier deliveries were sent to a checkpoint managed by a TPL, with material brought in by ...
What Is Construction Logistics
Case Studies in Construction Logistics. Examining real-life case studies can provide valuable insights into successful implementation of construction logistics. Let's explore two examples: Case Study 1: The Shard, London. The Shard, located in London, is one of the tallest buildings in Europe. Its construction presented unique logistical ...
Case Studies
ICAT Logistics Case Studies. Actions speak louder than words. We deliver the results. At ICAT Logistics, we have a serious appetite for solving the most challenging logistics situations—no matter how large or small. Nothing proves it better than these against-all-odds client success stories. ... Construction. Case Study All Precision & No ...
Case studies on automation and digitalization in intermodal ...
Case studies on automation and digitalization in intermodal freight transport and logistics. Languages and translations. English. File type1. ECE-TRANS-WP.24-2024-inf03e.pdf (application/pdf, 140.59 KB) This document is associated with the following: Event
Case Study: Yusen Logistics Co., Ltd.
Thus, Yusen Logistics started to deliver its own GHG emissions reductions certificates as a refined service of "Yusen Book-and-Claim," in January 2024. This represented a Japanese forwarder's pioneering initiative. "We aim to become the world's preferred supply chain logistics company.
Coordinated construction logistics: an innovation perspective
Coordinated construction logistics is an increasingly discussed topic in the Swedish construction industry. It is suggested as a means to increase efficiency in transportation, decrease material usage, coordinate health and safety on-site, etc. Much research on construction logistics has been done from a supply chain management perspective ...
Exploring Logistics Strategy in Construction
There is a lack of studies on logistics strategies in construction, therefore this study is explorative, using a case-based research method. The research design is divided into two phases. The first phase is a literature review taking a stance in the traditional logistics and operations management literature, searching for suitable factors for ...
Third-party logistics in construction: the case of a large hospital
Case study; construction logistics; construction supply chain; supply chain management; third-party logistics; Acknowledgement. This research has been made possible through a grant from the L E Lundberg foundation for Research and Education and from the organizations financing parts of this research project: Region Östergötland, Sankt Kors ...
Effects of shield construction on dynamic characteristics and
Shield tunneling method is widely used in urban underground tunnel construction because of its high speed and little influence on ground traffic (Wei et al. 2020).The case of existing tunnel under-crossed by a shield tunnel has been increasing with the development of underground space and metro system in urban area (Wei et al. 2023).For under-crossing construction, the deformation of the ...
Assessment and management of construction and demolition waste in tier
The present study examines the current practices for managing construction and demolition waste (CDW) in two tier-2 cities of Karnataka state: Hubli-Dharwad and Davanagere. The research highlights the quantification, characterization, and effective management strategies for CDW. CDW dumping sites were identified through field visits conducted across all wards of the cities and recorded using a ...

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SMART CONSTRUCTION LOGISTICS

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Organizing construction logistics outsourcing: a logistics strategy perspective

Design/methodology/approach

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Practical implications

Originality/value

1. Introduction

2. Logistics outsourcing decision

2.2 Logistics organizations designs

2.3 Organizing construction logistics outsourcing

3. Research design and method

3.1 Data collection

3.2 Data analysis

4. Findings

4.1 Logistics development in the construction corporation

4.2 The building contractor’s logistics organization

4.3 The construction equipment rental company’s service offerings

4.4 Building contractor–construction equipment rental company dyad

5. Discussion

6. Conclusions

Acknowledgements

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Assessment and management of construction and demolition waste in tier 2 cities of Karnataka, India: a case study of Hubli-Dharwad and Davanagere

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