Challenges and Perspectives of Supply Chain Management in Emerging Markets: A Case Study Approach

Challenges and Perspectives of Supply Chain Management in Emerging Markets: A Case Study Approach

Eni Ahmeti (Epoka University, Albania) and Alba Demneri Kruja (Epoka University, Albania)
DOI: 10.4018/978-1-7998-2867-9.ch006

Abstract

Supply chain management (SCM) as a concept first originated in the manufacturing industry from logistics and just-in-time production. Used to successfully utilize SCM elements and diminish lingering issues in construction, its importance lies in the focus that it gives to plan different features of the supply chain by also involving other parties of the chain in the process. SCM in construction supports firms by aiding in the improvement of competitiveness between firms and the increase of the company's profits and control over projects. Although generic supply chains should be simple and linear, the construction sector is much more complex. These problems are present in different parts of SCM due to interdependence in the organization and supply chain. Through a case study analysis and semi-structured interviews, this chapter aims to identify and better understand the role of SCM, challenges and complications in different levels of the supply chain, and how firms utilize it to create greater value in construction operations, and specifically in Albania.
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Introduction

Albania has experienced a major transformation over the last quarter century, emerging from a particularly isolated form of communism in the early 1990s to face the substantial challenges of forming a responsive, democratic system of government and developing a modern economy (O`Brien et al., 2017). Universities’ role in the socio-economic development is important as they improve and diffuse scholarly knowledge (Kruja, 2013, p.14).

Albania is a country dominated by trade sector, providing the highest number of established enterprises, employment and turnover too (Kruja, 2020). Even though construction sector is one of the most important sectors of Albanian economy and it has undergone a significant increase since 2002 (instat.gov.al). It has greatly contributed to the development and modernization of the country through improved technology and infrastructure.

A significant impact in improvement of construction sector has been made by the implementation of Supply Chain Management (SCM). Essentially, SCM is the planning and management of all activities from sourcing to logistics activities. In addition, it coordinates the organizations involved in the chain such as suppliers, service providers and customers.

A proper management of materials and information flows are two very important aspects for construction companies. By doing so, they are provided with significant benefits and can offer their clients greater value in what they purchase. In this regard, SCM is a very useful approach. Because construction operations are characterized by high degrees fragmentation, coordination and management of the supply chain, it has to be accurately managed so that good results can be obtained.

However, practitioners have noticed that SCM application in construction operations has brought up underlying issues and challenges in different stages of the supply chain. Vrijhoev and Koskela (2000) claim that these problems are caused from myopic control. Another factor is that the nature and fragmentation of the sector itself may be an indicator for them. Nevertheless, construction firms aim to utilize supply chains to measure their performance, create competitive advantage and maximize customer satisfaction.

This research aims to identify the role of SCM in construction operations in Tirana, capital city of Albania, identify the problems that arise from its application and explore the opportunities of gaining competitive advantage and achieving customer satisfaction through its use. Based on these objectives, this study seeks to answer the following questions:

  • R1: What is the role of SCM in construction operations?

  • R2: What are the problems that arise from SCM application?

  • R3: How do firms use supply chain to gain competitive advantage and achieve customer satisfaction?

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Theoretical Background

During the recent years, SCM is used as a tool by companies in order to improve their overall performance and gain competitive advantage in the market. Even more important is its presence in construction operations. Through this theoretical background, we will gain insight about supply chain networks, supply chain management, what are its characteristics and role in construction operations and the problems present in it.

Key Terms in this Chapter

Construction Supply Chain Management: Seeks optimization by taking into consideration production activities of independent production units through offers new tactics in cost reduction and increase of reliability and operation’s speed in construction by providing a coherent source to improve coordination and project control.

Triple Helix Model: Is a model of continuous interaction between university-industry-government through assuming some of the capabilities of the other as each maintains its primary role and distinct identity.

Supply Chain Management (SCM): A management philosophy focusing on planning and managing effectively and efficiently in collaboration with suppliers and customers all the activities involved in the sourcing, procurement and conversion of materials to final products.

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