Civil Engineering Reference
In-Depth Information
control, the logistical fl ow of those goods to the point of need, a reduc-
tion in the number and size of storage requirements, and waste reduc-
tion. The use of common components and materials also allows the
possibility of achieving consistency of design across the programme for
certain elements. Using common components can create an aesthetic
unity and a consistent quality across different buildings and structures.
This is often required across a portfolio of projects, where a client's
corporate identity may need to be refl ected in the architecture as a con-
dition of the brief. Common components also simplify and make the
facilities management and maintenance of the completed programme
much more effi cient during its whole life cycle.
Factors infl uencing the procurement of common components
A number of factors determine whether or not procuring common com-
ponents at a strategic procurement level is helpful. These factors include
market leverage, supply chain security, future maintenance, and opera-
tions and design effi ciencies.
Market leverage
According to Martin and Grbac (2003), market leverage is one of the
benefi ts of manipulating the supply chain to increase profi tability, a
method of gearing up of sales and turnover by using the credit of sup-
pliers. Leverage can also give the client one or more of the following
advantages. It allows for bulk supply leading to economies of scale and
the potential for discounts to be obtained. Because of secured quantities
with planned delivery, manufactured products may be improved. Lever-
age also helps to secure the supply chain for the programme, an espe-
cially important consideration when components are critical or their
delivery is on the critical path. It also reduces the risk associated with
late delivery by securing lead-in times. Finally, by developing relation-
ships with the supply chain, innovation may be encouraged.
An alternative interpretation of market leverage is that it is a measure
of a fi rm's negotiating strength or power, which is a function of the share
of a market held by a fi rm either on the supply side or the demand side.
For example, the demand created by one programme may form a signifi -
cant percentage of the output of the targeted sector or specifi c supplier
fi rms.
