DEPARTMENT OF ARCHITECTURE AND CIVIL ENGINEERING CHALMERS UNIVERSITY OF TECHNOLOGY Gothenburg, Sweden 2020 www.chalmers.se Improving project performance through logistics outsourcing in an urban construction project A case study at Veidekke Master’s thesis in Design and Construction Project Management HANNA PETTERSSON FREDRIKA SKOGLUND Master’s thesis 2020: ACE X30 Improving project performance through logistics outsourcing in an urban construction project A case study at Veidekke HANNA PETTERSSON FREDRIKA SKOGLUND DF Department of Architecture and Civil Engineering Division of Construction Management Chalmers University of Technology Gothenburg, Sweden 2020 Improving project performance through logistics outsourcing in an urban construction project: A case study at Veidekke HANNA PETTERSSON FREDRIKA SKOGLUND © HANNA PETTERSSON & FREDRIKA SKOGLUND, 2020. Supervisor: Viktoria Sundqvist, Dep. of Architecture and Civil Engineering Examiner: Viktoria Sundqvist, Dep. of Architecture and Civil Engineering Master’s Thesis 2020: ACE X30 Department of Architecture and Civil Engineering Division of Construction Management Chalmers University of Technology SE-412 96 Gothenburg Telephone +46 31 772 1000 Printed by Chalmers Reproservice Gothenburg, Sweden 2020 iii Improving project performance through logistics outsourcing in an urban construction project: A case study at Veidekke HANNA PETTERSSON FREDRIKA SKOGLUND Department of Architecture and Civil Engineering Chalmers University of Technology Abstract The enhanced desire of living in urban areas contributes to increased demands for housing. Building in dense areas often lead to logistical challenges since the amount of space is limited. Additionally, previous research claim that productivity is low within construction projects and not following productivity developments in other industries. Both rearrangements of construction logistics and implementation of supply chain management is argued to be possible solutions to increase performance of the construction supply chain. Therefore, this thesis aims to investigate how out- sourcing of logistics can improve the performance of the construction supply chain, as one way to increase the productivity in a dense city construction project. The study contributes to the understanding of the effects of applying third party lo- gistics to the principles of supply chain management in construction. In order to reach results that align with the aim, an abductive research approach is chosen. Observations from a case study at one of Veidekke’s construction projects has been executed, together with interviews and discussions. In total, nine interviews have been conducted. The findings from the study shows that by outsourcing logistics, the workers at the project can focus on executing value adding work tasks leading to increased pro- ductivity. Outsourcing of materials handling relieves one hour every day for the construction workers. It is found that a supervisor spend approximately 22 hours during a week on activities that can be outsourced to a TPL-company. If these activities are outsourced, the supervisor can spend this time on planning for future activities in detail. More detailed planning will reduce the risk of unforeseen prob- lems that can hinder the productivity. By planning every activity in detail, the need to have time buffers in the schedule will not be necessary. TPL-services can to some extent help achieve supply chain management within the construction supply chains. It is concluded that, to fully achieve construction supply chain management, one must also enhance the standardisation further. The results in this thesis provides Veidekke with suggestions that can increase the productivity of their projects. Keywords: Construction Logistics, Construction Supply Chain Management, Project Performance, Third Party Logistics. iv Acknowledgements This master thesis is an end of an era, a summary of the conducted knowledge of our five years at Chalmers University of Technology and the beginning of a new chapter as civil engineers. This thesis has been written on behalf of the construction company Veidekke during the spring semester of the year 2020. The report is the final degree project of 30 credits in the masters programme Design and Construction Project Management at the division of Construction Management. We would like to express our biggest gratitude towards our supervisor at Chalmers, Viktoria Sundquist. You have always contributed with good ideas and guidance on how to move forward. Thank you for taking your time to help us throughout the processes of writing this report. Furthermore, we would also like direct a big thank you to our supervisor at Vei- dekke, Sofia Dehre. Thank you for your guidance and the valuable knowledge of the company and the construction industry that has contributed to our understanding of the investigated issue. Not to forget, we would also like to thank our interview participants and the people working at the project Mandolingatan for taking their time to help us with our research. Hanna Pettersson & Fredrika Skoglund, Gothenburg, June 2020 v Contents List of Figures viii List of Tables ix 1 Introduction 1 1.1 Background . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 1.2 Third Party Logistics Company . . . . . . . . . . . . . . . . . . . . . 2 1.3 Problem Statement and Aim . . . . . . . . . . . . . . . . . . . . . . . 3 1.4 Research Questions . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 2 Theoretical Framework 5 2.1 Construction Industry: Strong Project Focus . . . . . . . . . . . . . . 5 2.1.1 Performance and productivity in construction . . . . . . . . . 6 2.2 Construction Supply Chain Management . . . . . . . . . . . . . . . . 9 2.2.1 Focus areas for implementation of SCM in construction . . . . 12 2.3 Construction logistics . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 2.3.1 Barriers against effective logistics management . . . . . . . . . 15 2.3.2 Construction Logistics Services . . . . . . . . . . . . . . . . . 16 2.3.3 Outsourcing Construction Logistics . . . . . . . . . . . . . . . 19 3 Methodology 21 3.1 Research Design . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21 3.2 Research Process . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24 3.2.1 Literature Research . . . . . . . . . . . . . . . . . . . . . . . . 24 3.2.2 Empirical Data Collection . . . . . . . . . . . . . . . . . . . . 24 3.3 Research Quality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27 3.4 Ethical conduct . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28 4 Empirical Study 29 4.1 Third Party Logistics Services . . . . . . . . . . . . . . . . . . . . . . 29 4.1.1 Involvement of Third Party Logistics . . . . . . . . . . . . . . 29 4.1.2 Logistics within the construction industry . . . . . . . . . . . 30 4.1.3 Logistics Services . . . . . . . . . . . . . . . . . . . . . . . . . 32 4.1.4 Implementation of Third Party Logistics . . . . . . . . . . . . 32 4.2 The Construction Company Veidekke . . . . . . . . . . . . . . . . . . 34 4.2.1 The construction department . . . . . . . . . . . . . . . . . . 34 4.2.2 How the contractor perceives the effects of TPL . . . . . . . . 35 vi Contents 4.3 CS Logistics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37 4.3.1 Offered services . . . . . . . . . . . . . . . . . . . . . . . . . . 38 4.3.2 Effects of the provided TPL-services by CS Logistics . . . . . 39 4.4 Case: Mandolingatan . . . . . . . . . . . . . . . . . . . . . . . . . . . 40 4.4.1 Current logistical conditions . . . . . . . . . . . . . . . . . . . 42 4.4.2 Coordination and collaboration at Mandolingatan . . . . . . . 42 4.4.3 Observing the supervisors . . . . . . . . . . . . . . . . . . . . 43 4.4.4 Planned logistics at Mandolingatan . . . . . . . . . . . . . . . 47 4.4.5 Planning and following the schedule at Mandolingatan . . . . 48 5 Analysis 50 5.1 Logistics challenges in dense city construction projects . . . . . . . . 50 5.2 TPL - Services and functions . . . . . . . . . . . . . . . . . . . . . . 52 5.2.1 The connection between sustainability and increased perfor- mance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56 5.3 Utilisation of the four roles in construction supply chains . . . . . . . 57 5.4 Potential effects of applying TPL in SCM . . . . . . . . . . . . . . . . 61 5.4.1 Role 1: Improving the connection between the contractor and suppliers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62 5.4.2 Role 2: Decreasing inventory and increasing order on site . . . 65 5.4.3 Role 3: Enhanced standardised principles . . . . . . . . . . . . 67 5.4.4 Role 4: Achieving construction supply chain management . . . 68 5.5 Increasing productivity by rearranging activities . . . . . . . . . . . . 69 5.5.1 Utilising TPL-services to create stable construction supply chains . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72 6 Conclusions 74 6.1 Improving project performance . . . . . . . . . . . . . . . . . . . . . 74 6.2 Recommendations for Veidekke . . . . . . . . . . . . . . . . . . . . . 75 6.3 Further Research . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76 Bibliography 80 A Appendix - Interview Questions I A.1 Third Party Logistics: Set 1 . . . . . . . . . . . . . . . . . . . . . . . I A.2 Third Party Logistics: Set 2 . . . . . . . . . . . . . . . . . . . . . . . III A.3 Third Party Logistics: Set 3 . . . . . . . . . . . . . . . . . . . . . . . V A.4 Mandolingatan - Supervisor: Set 1 . . . . . . . . . . . . . . . . . . . VI A.5 Mandolingatan - Supervisor: Set 2 . . . . . . . . . . . . . . . . . . . VIII A.6 Mandolingatan - Site Manager . . . . . . . . . . . . . . . . . . . . . . X A.7 Mandolingatan - Client perspective . . . . . . . . . . . . . . . . . . . XII B Appendix - Duration of activities from observations XIII B.1 Mandolingatan - Observation: Supervisor A . . . . . . . . . . . . . . XIII B.2 Mandolingatan - Observation: Supervisor B . . . . . . . . . . . . . . XIII B.3 Mandolingatan - Observation: Supervisor B . . . . . . . . . . . . . . XIV vii List of Figures 1.1 The connection between the investigated areas in the thesis. . . . . . 3 2.1 Observed activities of a construction worker (Strandberg & Joseph- son, 2005). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 2.2 Different views of the connection between logistics and SCM (Sand- berg, 2015). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 2.3 General structure of a construction supply chain (Xue et al., 2007). . 12 2.4 The four roles of SCM (Vrijhoef & Koskela, 2000). . . . . . . . . . . . 12 2.5 How a CLC can be used in a construction project (Janné, 2018). . . . 17 2.6 How a checkpoint can be used in a construction project (Janné, 2018). 18 2.7 On-site logistics and off-site logistics connected to an involved TPL- company (Sundquist et al., 2018). . . . . . . . . . . . . . . . . . . . . 19 3.1 The process of systematic combining (Dubois & Gadde, 2002b). . . . 22 4.1 Organisational structure of Veidekke Sweden. . . . . . . . . . . . . . 34 4.2 A possible constellation of a project organisation in a construction project where CS Logistics is involved. . . . . . . . . . . . . . . . . . 37 4.3 The four blocks at Mandolingatan. © Liljewall Arkitekter . . . . . . 41 4.4 Material storage at the construction site. . . . . . . . . . . . . . . . . 44 4.5 Before and after materials are moved. . . . . . . . . . . . . . . . . . . 45 5.1 First role . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58 5.2 Second role . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59 5.3 Third role . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60 5.4 Fourth role . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60 5.5 How the construction supply chain is perceived. . . . . . . . . . . . . 61 5.6 TPL acting as a connection between the operations on site and the supply chain. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62 5.7 Increased value of value adding work . . . . . . . . . . . . . . . . . . 64 5.8 Reducing inventory levels by applying TPL in SCM. . . . . . . . . . . 66 5.9 Moving activities from the construction site to the supply chain. . . . 68 5.10 Fully achieved integration of the supply chain with the construction site. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69 viii List of Tables 2.1 Characteristics of the construction supply chain . . . . . . . . . . . . 11 3.1 Interview participants: . . . . . . . . . . . . . . . . . . . . . . . . . . 25 3.2 Observations made during the study. . . . . . . . . . . . . . . . . . . 26 5.1 Suggested activities that could be moved or will be eliminated from workers on site. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64 5.2 Identified non-value adding activities performed by a supervisor at Mandolingatan during five days . . . . . . . . . . . . . . . . . . . . . 70 B.1 First observation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . XIII B.2 Second observation . . . . . . . . . . . . . . . . . . . . . . . . . . . . XIII B.3 Third observation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . XIV ix Glossary Client - Beställare Construction Engineer - Entreprenadingenjör Construction Elevator - Bygghiss Construction Manager - Arbetschef Construction Site Plan - Arbetsplatsdispositionsplan (APD-plan) Construction Workers - Yrkesarbete Contractor - Entreprenör Intransport - Inbärning Site Manager - Platschef Schedule - Tidplan Supervisor - Arbetsledare Supplier - Leverantör Supply chain - Försörjningskedja Notations CLC - Construction Logistics Center CLS - Construction Logistics Service CSCM - Construction Supply Chain Management TPL - Third Party Logistics SCM - Supply Chain Management VDC - Virtual Design Construction x 1 Introduction This chapter presents the introduction to the thesis. Firstly, the background to the selected subject including a problem formulation is presented, covering the impor- tance of the investigated problem. The introduction ends with a presentation of the aim and the research questions that will be investigated in the study. 1.1 Background The desire to live in the big cities is increasing and leading to an enhanced need for urban development (Spillane & Oyedele, 2017). According to the United Nations (2019), it is estimated that the urban population in Sweden is estimated to rise up to 93.2 % in the year of 2050. The increased urbanisation brings a number of challenges to the construction industry. Janné (2018) states that when the population in the cities increases, the need for more housing, hospitals, office buildings and infrastruc- ture is enhanced. The two main challenges that construction in urban areas face are the urban transport problem and the problem of coordinating multiple stakehold- ers (Janné, 2018). The urban transport problem consists of four challenges: space limitation, environmental concerns, accessibility and noise restrictions (Janné, 2018). The construction industry is dependent on materials arriving to the construction site when needed (Lindén & Josephson, 2013). The process of managing this flow of materials is called logistics and in a construction setting, this is referred to as con- struction logistics (Janné, 2018). Janné (2018) defines this as dealing with supplying the right materials to the right customer and construction site with the goal to meet customers’ requirements. Hulthén et al. (2017) claim that an important aspect of the challenges when building in urban areas is construction logistics. Agreeing with previous author, Janné (2018) emphasise the importance of logistics as one way to address these challenges. Although it exists proof of the benefits of putting extra resources in logistics, the construction industry has been slow to recognise them (Sullivan et al., 2011). It is estimated that between 10-20 % of all construction costs are related to transports but despite this, there is little consideration given to how the materials and equipment are delivered to the construction site (Sullivan et al., 2011). Moreover, Thunberg & Persson (2014) state that less than 40 % of deliveries to construction sites arrive in right amounts, at the right time and at the right loca- tion. Traditionally there has been little attention paid to logistics in the construction industry, only the final leg of materials delivery to the construction site are being recognised as important (Sullivan et al., 2011). Ekeskär (2016) claim that better 1 1. Introduction planned logistics, regarding both how to receive and handle materials, will decrease production costs and increase productivity on site. To improve construction logis- tics, Sundquist et al. (2018) suggest a potential change of arrangement; to rely on specialised actors in handling material flows. Moreover, Lindén & Josephson (2013) recommend outsourcing of logistics to service providers that are specialised in ma- terials flow operations, so called TPL-actors. These organisations have contributed to enhanced logistics and supply chain management in other industries (Sundquist et al., 2018). The construction supply chain is characterised to be a converging chain that is di- recting all materials to the construction site where the element is assembled from incoming materials (Vrijhoef & Koskela, 2000). The site is a temporary “construc- tion factory” that is set up around the single product. The existing construction supply chain is claimed to be the main cause of the poor performance in the indus- try (Dubois et al., 2019). There are many actors involved in a construction supply chain, such as subcontractors, suppliers, and other stakeholders (Xue et al., 2007). Briscoe & Dainty (2005) state that there is a lack of will to implement supply chain management practices and obtain supply chain integration in the industry. With the existing construction supply chain, problems such as adversarial relationships and lack of exchange of information and communication can occur (Xue et al., 2005). According to Vrijhoef & Koskela (2000), the construction industry suffers from poor performance and low efficiency. To increase efficiency in the construction industry, Vrijhoef & Koskela (2000) suggest that a better managed supply chain can be a so- lution. According to Hulthén et al. (2017), the lack of planned logistics systems can lead to problems at the construction site regarding the handling and movement of materials which can increase the risks of damages and waste. This leads to enhanced costs and consequences for the quality of the building materials and will therefore reduce the efficiency of the construction process (Hulthén et al., 2017). Additionally, the demands for a more sustainable construction industry with regards to reduction of resources and transportation is increasing. To reach these effects, Hulthén et al. (2017) state that logistics is a crucial factor. Construction logistics and supply chain management are identified as possible solutions to enhance performance and effectiveness (Hulthén et al., 2017). Agreeing with Hulthén et al. (2017), Vrijhoef & Koskela (2000) argue that problems within the construction supply chain could be resolved by applying principles and methodologies of supply chain management. 1.2 Third Party Logistics Company Veidekke is a Norwegian construction company, that except from Norway also op- erates in Sweden and Denmark (Veidekke, n.d.). The company is the fourth largest within its industry in Scandinavia. CS Logistics is a third party logistics com- pany (TPL-company) owned by Veidekke, that offers different construction logistic services. The TPL-company offers services such as logistics analysis, construction logistics centre and intransport of materials (CS Logistics, n.d.). This thesis will ex- 2 1. Introduction plore the potential effects of outsourcing logistics to CS Logistics to one of Veidekke’s construction projects. 1.3 Problem Statement and Aim As an effect of the existing challenges connected to logistics when building in urban areas, the company CS Logistics has been created to support construction projects with various logistics services. In this thesis, a construction project will be studied and will be referred to as “Mandolingatan” . The project is situated in a dense area in Gothenburg with some logistical challenges. To be able to motivate the usage of third party logistics services, the aim of the thesis is to investigate how outsourcing logistics can improve the performance of the construction supply chain, as one way to increase the productivity in a dense city construction project. The figure 1.1 below gives an overview of the different areas that will be explored in the thesis and how they are connected to each of the research questions. Figure 1.1: The connection between the investigated areas in the thesis. 3 1. Introduction 1.4 Research Questions In order to fulfil the aim of the thesis, following research questions will be answered: 1. What are the main logistical challenges in dense city construction projects? 2. What type of third party logistics services exist today and what are the pros and cons of utilising them? 3. How are the principles of supply chain management utilised in the production phase of a construction project? 4. What are the effects of applying third party logistics services to the principles of supply chain management? 4 2 Theoretical Framework This chapter presents the theoretical framework. The theoretical framework is based on a literature study with the aim to give context to the chosen area of research. The disposition of this chapter consists of three sections. Firstly, the construction industry and its characteristics will be explained and the strong focus on projects within the industry will be emphasised. Further, the term construction supply chain management and the concept construction logistics are explained and distinguished from each other. 2.1 Construction Industry: Strong Project Focus According to Persson et al. (2009), the construction industry is project-based; each construction site is considered as an individual project and it is common that several projects are executed simultaneously by one construction company. Construction is about coordination of differentiated and specialised tasks at the site (Shirazi et al., 1996). This site-specific activities provide two central features of the construc- tion industry; the focus on individual projects and the need for local adjustment at the construction site (Dubois & Gadde, 2002a). The focus on individual projects is in terms of decentralised decision-making and financial control. The reason for decentralised decision-making is founded by the managements’ unfamiliarity with the local environment and resources. The need for local adjustments is necessary because of uncertainty factors such as lack of complete specification, lack of unifor- mity and an unpredictable environment (Dubois & Gadde, 2002a). Koskela (2000) have found that the construction industry have three distinctive traits. The first is that every construction project is a unique prototype. Secondly, each project is carried out on a production site which means that it will be exposed to different site conditions, such as weather. Lastly, a construction project is assembled by a team that can differ from project to project. The lack of consistency have great impact on the coordination of materials and information which is one of the main problems in the industry (Lindén & Josephson, 2013). In general, the construction industry does not behave as an “industry”, more like a group of different industries or an “industry of industries” (Fernández-Solís, 2008). According to Fernández-Solís (2008), the construction industry is expected to be as efficient as other manufacturing industries such as the automobile or the aircraft industry. There are differences between the desired effectiveness of the construction industry and other industries when they are compared in practice (Fernández-Solís, 5 2. Theoretical Framework 2008). Azambuja & O’Brien (2008) state that compared to manufacturing indus- tries, the product demand is less uncertain in construction, since the amount of materials that is required is normally known in advance. The project site is depen- dent on labor productivity and availability, the use of tools and the open environ- ment. There are also lack of standardisation and tolerance management at the sites (Azambuja & O’Brien, 2008). In construction projects, uncertainties are the result of temporary conjunctions in a turbulent environment (Bertelsen, 2003). According to Dubois & Gadde (2002a), the construction industry is blamed to be inefficient and has failed to adapt techniques that have improved the performance in other industries. A common view is that the construction industry would benefit of to change its behaviour and adapt more to other industries’ norms (Dubois & Gadde, 2002a). 2.1.1 Performance and productivity in construction The construction industry is continuously being accused of having worse produc- tivity compared to other existing industries (Lind & Song, 2012). Productivity is defined by Lind & Song (2012) as how large the output of resources is in relation to the input of resources. According to Lind & Song (2012), the statistics also con- firms these allegations as the productivity development almost has stagnated since the beginning of the 1990s. Dubois & Gadde (2002a) claim that the project-based characteristics of the industry is one possible suggestion to why the industry is lack- ing behind other industries with regards to the productivity. Moreover, Dubois & Gadde (2002a) argue that the short and weak relationships between different actors that a project-based industry consist of, is the reason for the industry’s difficulty to follow productivity developments. According to Landin & Oberg (2014), productiv- ity cannot be considered without regard to the role of labour as a primary resource as a result of the construction industry being crucially reliant on labor-intense ac- tivities on construction sites. In the construction industry’s constant competitive environment, there exist a continuous pressure to reduce costs, especially targeting to decrease costs for on-site labor. Concerning this, Landin & Oberg (2014) state that increased efficiency directly lead to profit for an organisation. However, Lind & Song (2012) argue that the construction industry is not that far behind other in- dustries regarding productivity development and that statistics are proving wrong. Since the measurement for productivity of the Swedish construction sector does not consider increased quality, Lind & Song (2012) conclude that the productivity devel- opment most likely is underestimated. According to Lind & Song (2012), the current quality adjustment is not adequate and that it is not possible to make a statement regarding the productivity development of construction with today’s measurements. Similarly, productivity development is questioned in the infrastructure industry. For that specific topic the Swedish government appointed a committee with the mission to improve both productivity and pace of innovation (Lind & Song, 2012). To reach the goals the report suggest some actions to support the industry increase pro- ductivity. These actions include enhanced amount of design-build contracts with functional requirements, development of functional requirements for design-build 6 2. Theoretical Framework contracts, take advantage of repetition and standardisation, development of the work with evaluation and follow-ups, measuring productivity development and level of innovation (Lind & Song, 2012). Construction projects have a strong tendency for tight schedules but despite this, both the contractor and subcontractors include a variable amount of “acceptable” waste in their cost calculations and in their schedules (Koskenvesa et al., 2010). Waste is defined by Basu & Wright (2012, p. 71) as “any human activity that absorbs resources but creates no value”. Koskenvesa et al. (2010) state that if it is desirable within the construction industry to manage truthfully and build more productively, the waste need to be identified and controlled so that the amount of waste will be able to reduce. According to Josephson & Saukkoriipi (2007), one of the highest priorities both for individual construction companies and the whole construction industry should be to reduce waste. Waste in a construction project can in some cases reach up to 30-35 % of the total production cost (Josephson & Saukkoriipi, 2007). Moreover, Josephson & Saukkoriipi (2007) have identified four categories of waste in construction projects: 1. Defects and checks 2. Use of resources 3. Health and Safety 4. Systems and structures Studies indicate that the costs for defects during the production phase corresponds to 2-6 % of the production cost (Josephson & Hammarlund, 1999). Defect and checks is divided into visible and hidden defect costs. Visible defects costs are the costs that can be detected and registered, contrary to hidden cost where the knowledge to discover them or the measurements to register them is required. For example, hidden defects costs infer defects that occur on a material at the factory where it is produced and is something the contractor in the end have to pay. According to Josephson & Saukkoriipi (2007), costs for defects could reach up to 9.4 % of the total production cost for a construction project. Furthermore, the second category of waste that Josephson & Saukkoriipi (2007) identifies is the use of resources. The use of resources includes how utilisation of work time, machinery and engineering materials is used. According to Josephson & Saukkoriipi (2007), it is of large interest to do observations studies of the work of a construction worker. The authors state that this reflects the view of how well the project organisation, the project management and the production planning is working. Strandberg & Josephson (2005) has executed an observation study of con- struction workers and identified the following activities performed by construction workers; direct value adding work, preparation, waiting and waste. The following figure (2.1) illustrate a more detailed view of how time is utilised by a construction worker on site based on the study by Strandberg & Josephson (2005). 7 2. Theoretical Framework Figure 2.1: Observed activities of a construction worker (Strandberg & Josephson, 2005). Direct value adding adds value to the product, while waste is of the form of com- pletely unnecessary work that can be eliminated without having any impact on the product (Josephson & Saukkoriipi, 2007). However, preparations are necessary work to be able to perform the direct value adding work but does not by itself increase value to the product. The direct value adding work correspond to 19.5 % performed by the observed construction workers. Preparations is divided in three parts, where the total preparations of 45.4 % equals; 25 % of indirect work (handling equipment and material, safety work), 14 % of material handling (mostly spent moving materi- als to the workplace) and 6 % consisted of planning work (Strandberg & Josephson, 2005). Waiting is mostly spent when moving between different working spots. How- ever, waiting because of lack of machines, equipment or materials only is representing 1.3 % of the total time (Strandberg & Josephson, 2005). Furthermore, Strandberg & Josephson (2005) state that the observations shows that a construction spend 33 % of their day executing non value adding activities, in other words waste. Furthermore, Josephson & Saukkoriipi (2007) examine other waste related connected to use of resources and claim that the utilisation of machinery is rather low on the construction site. Smaller machines was only used 5 % of the time, compared to 48 % utilisation for larger vehicles. The total waste regarding utilisation of machinery then results in 2-5 % of the total production cost. The third category of waste, health and safety, includes waste of work-related illness and accidents (Josephson & Saukkoriipi, 2007). Furthermore, Josephson & Saukkoriipi (2007) the last identified category is systems and structures (Josephson & Saukkoriipi, 2007). Systems and structure includes cost related to organisational structure and management systems in project, companies or federal authorities Josephson & Saukkoriipi (2007). The category deals with costs related to the duration of time it takes to develop new plans regarding land use. The authors mentions some examples in the Gothenburg 8 2. Theoretical Framework region were the process regarding plans for new land use took five and two and half years. Moreover, Josephson & Saukkoriipi (2007) mentions the Swedish tendering system as another example of waste in the same category. 2.2 Construction Supply Chain Management For companies to gain competitiveness on the market, one option is to improve the performance of their supply chain (Pettersson & Segerstedt, 2011). Supply chain management, SCM, means that a company focus on their supply chain and strive for as low costs as possible connected to the supply chain as well as good service to the end customers (Sandberg, 2015). Sandberg (2015) suggest that SCM could be achieved by well-planned coordination with other actors in the supply chain. SCM is a concept that originated in the manufacturing industry and developed within the Just-In-Time delivering systems in the Toyota Production (Vrijhoef & Koskela, 2000). The most commonly known definition of supply chain management, SCM is made by CSCMP (n.d): “Supply chain management encompasses the planning and management of all activities involved in sourcing and procurement, conversion, and all logistics management activities. Importantly, it also includes coordi- nation and collaboration with channel partners, which can be suppliers, intermediaries, third party service providers, and customers. In essence, supply chain management integrates supply and demand management within and across companies.” There are different views regarding how logistics and supply chain management is connected to each another. Sandberg (2015) explains four different views regarding the connection of the two terms in figure 2.2 below. Figure 2.2: Different views of the connection between logistics and SCM (Sandberg, 2015). According to Sandberg (2015), the Traditionalist perceives SCM as a part of the bigger term logistics; SCM can be equated with the logistics outside the company, 9 2. Theoretical Framework the “external” logistics. The Name Changer does not make any difference between the two terms; their meaning is the same. The Unionist perceives SCM as a wide term that includes a lot of different areas, logistics being one of them. The intersec- tionist state that the terms SCM and logistics are overlapping with their content, but that SCM tends to contain strategic tasks that cannot be considered as logistics (Sandberg, 2015). In this thesis, SCM will be perceived from the unionist perspec- tive. Bankvall et al. (2010) claim that the construction industry lacks the will to imple- ment SCM and that the characteristics of the industry are not suitable with the concepts of SCM. However, Ekeskär (2016) argue that increased focus on logistics has been the main focus for some successful realisations of SCM in the construc- tion industry. Unlike the manufacturing industry, the construction supply chain is temporary and differs from project to project (Vrijhoef & Koskela, 2000). This leads to an instability in the supply chain and a segregation between the design and construction of a built object. Based on the fact that the construction industry is project-based, the supply chains are also characterised by a completely new prod- uct to fabricate, leading to little recurrence (Vrijhoef & Koskela, 2000). Moreover, Vrijhoef & Koskela (2000) suggest that a construction project can be likened with a “construction factory”. All materials are sent to the construction site to where the product, in this case the construction object, is assembled. Compared to the manufacturing industry where multiple products pass through the factory and is later distributed to several purchasers. The most familiar way of using SCM in construction is to see every project as an individual supply chain and try to identify what is needed for that particular supply chain (Bankvall et al., 2010). Vrijhoef & Koskela (2000) argue that two main issues are leading to consideration regarding the construction supply chain, firstly the slow productivity development and secondly the increased economic importance of the supply chain. The charac- teristics of the construction industry are reasons for the performance-related issues that the industry is facing (Xue et al., 2007). According to Xue et al. (2007), these problems are much related to the management of the construction supply chain and are in urgent need for improved coordination to reach better performance of the con- struction supply chain management, CSCM. Behera et al. (2015) presents following characteristics of a construction supply chain, explained in the following table 2.1: 10 2. Theoretical Framework Table 2.1: Characteristics of the construction supply chain Customer influence The end product are largely influenced by the customer regarding physical aspects and value of logistic parameters. Fragmentation The industry is very complex due to the large amount of involved subcontractors. Stakeholders Within construction projects there are many and different types of stakeholders involved. Buyer-supplier relationship The relationship between buyer and sup- plier is commonly characterised by mis- trust and conflict. The tendering process and the focus on price are the central rea- sons for project delivery problems. Project-based The project-based nature lead to relation- ships focused on short-term thinking and a focus of self-interest. Change passivity The construction industry is negative to- wards change because the risks associated with the procurement of projects. Make-to-order Because the client takes the initiative to build a construction project they are seen as the source of change. Collaborative There is a need to explore collaborative models to improve inter-organisational in- novation in construction. Cyclical demand There is a regular demand for the prod- ucts from the construction industry as there end-product not transportable but durable. The focus of CSCM is to handle the suppliers’ processes and to increase their com- petitive advantage. For every new construction project, the typical supply chain in- cludes main contractors, engineers, architects, subcontractors and material suppliers that all join a temporary organisation for a specific construction project (Behera et al., 2015). Xue et al. (2007) state that the supply chain in construction consists of all the construction business processes; everything from the demands given by the client, design and construction to maintenance. The construction supply chain is not a chain of construction businesses that have business-to-business relationships; it is a network consisting of multiple organisations and relationships. This includes different flows of information and materials, services or products, and the flow of funds between client, designer, contractor, and supplier (Xue et al., 2007). Figure 2.3 gives a schematic overview of the general structure of a construction supply chain. 11 2. Theoretical Framework Figure 2.3: General structure of a construction supply chain (Xue et al., 2007). 2.2.1 Focus areas for implementation of SCM in construc- tion For the construction industry to be able to incorporate the principles of SCM, Vri- jhoef & Koskela (2000) claim that the principles must be adapted for the typi- cal characteristics of the construction supply chain. Therefore, Vrijhoef & Koskela (2000) suggest four specific areas where SCM could be embedded in the construction industry, as they refer to as the four roles of supply chain management. The areas differ depending on weather the focus is on the supply chain, the construction site or both (Vrijhoef & Koskela, 2000). Figure 2.4 visualises the four different roles and the focus area for each one of the four roles. Figure 2.4: The four roles of SCM (Vrijhoef & Koskela, 2000). The first role is focusing of the connection between off-site and on-site logistics, i.e. how the supply chain impact the logistics on-site. It is important that materials and 12 2. Theoretical Framework equipment is delivered to site on time to avoid any disruption of the production. The goal with the first role is to decrease both duration of site activities and costs. To reach the goal it is important that the project ensure trustworthy material and labour flows to the site to avoid any disruption of the workflow (Vrijhoef & Koskela, 2000). The contractor whose mainly focus on site activities has a lot to gain to shift some focus from on-site activities to the supply chain. Vrijhoef & Koskela (2000) suggest that the simplest way to achieve this is to focus on the relationship between the site and direct suppliers. One initiative to implement the first role focused on co-operation between suppliers and contractors. The second role focuses on the supply chain itself with the goal to reduce costs related to inventory, lead-time and logistics. Except from the contractor, Vrijhoef & Koskela (2000) propose that material and component suppliers also should adopt to that focus. Ekeskär (2016) interpret the second role as a way to streamline the supply chain with the site, so that the supply chain are suitable in the best possible way and supporting the construction project. Ekeskär (2016) suggest that this could be achieved by customising deliveries, so it is specified in what way materials should be packed or how to pack pallets. To achieve global improvement, it is important to have in mind the trade-off between transportation, inventory and production cost. According to Vrijhoef & Koskela (2000), in-depth costs and time analysis should be executed to achieve a development of the supply chain. The same authors further suggest that the performance of the supply chain is a cause of varying site and ca- pacity conditions and uncertainty in the supply chain (Vrijhoef & Koskela, 2000). The third role focuses on transferring activities from the construction site to the supply chain and should be adopted by both supplier and contractors (Vrijhoef & Koskela, 2000). This is achieved by increasing compatibility between activities and to avoid inferior conditions on site. Enhanced compatibility of activities is not com- patible with the conditions on site and have to be transferred to the supply chain due to their many technical dependencies. A common initiative is the utilisation of prefabricated elements in production, as well as other industrialisation initiatives, transferring on-site activities off-site. Lastly, the main focus of the forth role is to integrate off-site activities with on-site activities. This is achieved by subsuming the production on site with the supply chain. According to Ekeskär (2016), the forth role is realised when the supply chain is fully integrated with the construction site. Some actions in this area include open building and sequential procedure (Vri- jhoef & Koskela, 2000). An open building postpones utilisation decisions regarding the interior of the building, while sequential procedure involves structuring the site work after self-governing procedures. However, the goal with both these procedures is to replace the temporary construction supply chains with new permanent sup- ply chains. Another initiatives that could be categorised under the fourth role is design-build arrangements. Furthermore, Vrijhoef & Koskela (2000) state that the four roles could be used jointly and not only one by one. According to Vrijhoef & Koskela (2000), it is shown that the construction supply chain have great potential for improvement. The major cause for waste and prob- 13 2. Theoretical Framework lems are related to traditional management of the supply chain and new principles and methods of modern SCM could be a solution. The practical methods for SCM implementation must be developed, so that the characteristics of, and the specific situation of construction, is taken into consideration (Vrijhoef & Koskela, 2000). In their study, Vrijhoef & Koskela (2000) draw three main conclusions. The first is that even in normal situations, a lot of waste and problems exists in the construction supply chain. These problems are often ignored or not recognised. Secondly, most of the waste and problems are caused in a stage of the construction supply chain different from where the waste and problem surfaced. This means that the root causes of waste and problems were rarely found in the activity where the waste and problems were encountered. On the other hand, it was found in a previous activity by a prior actor. The third and last conclusion is that waste and problems are often caused by a short-sighted control of the construction supply chain. The authors state that when activities are transferred from the construction site to off-site, the supply chain becomes more complex and must be managed well. This is important in order to profit from the benefits that occurs when transferring activities (Vrijhoef & Koskela, 2000). 2.3 Construction logistics The general construction project involves a large number of different suppliers (Lindén & Josephson, 2013). These suppliers use different suppliers of their own to deliver goods and materials that is needed to for them to perform their work during the whole production phase. This leads to a generous amount of transports and de- liveries to a construction site requiring both resources and attention from workers (Lindén & Josephson, 2013). Hulthén et al. (2017) claim that a change in managing construction logistics will generate more effective construction processes. Agreeing with the previous claim, Thunberg & Persson (2014) suggest that the performance of the construction industry would increase if more attention was paid to the supply chain. An increased focus of construction logistics can contribute to lowering costs, increase the quality and to improve sustainability (Hulthén et al., 2017). Sundquist et al. (2018) claim that enhanced efficiency in transportation and logistics could reduce total costs by 20 %. Hulthén et al. (2017) has identified that the largest improvement possibilities of construction logistics exist in the integration between on-site logistics and off-site logistics. According to Ying et al. (2014), the efficiency of a construction project depends on the integration between on-site and off-site logistics and that problems can occur when there is a lack of planning of material deliveries and their site workforce. The opportunities for improved performance in construction logistics are according to Sundquist et al. (2018) dependent on two factors. The first one is to handle the logistics problems at the construction site and the second factor considers improve- ments of supply logistics that involves suppliers of building materials (Sundquist et al., 2018). Sundquist et al. (2018) state that research shows that rearrangement of site logistics have positive effects. According to a case study made by Agapiou et 14 2. Theoretical Framework al. (1998), logistics management is relevant in the construction industry and costs can be lowered with effective logistics management. The cost savings can be up to 5 % of the total costs and the largest contributor to this is the reduction of wasted materials and working days (Agapiou et al., 1998). Ekeskär & Rudberg (2016) states that in order for the supply chain to interact with the construction site, the logistics management at the site needs to be improved. To enhance efficiency in the industry Hulthén et al. (2017) suggest increased collaboration between different actors and implement use of new technologies. 2.3.1 Barriers against effective logistics management The construction industry lacks the ability and the appropriate skills to solve lo- gistical problems (Ying et al., 2018). Costs related to logistics in construction is relatively unknown, but what has been discovered is that inefficiency (waste) in construction in some cases is equal to 30-35 % of the total production cost (Lindén & Josephson, 2013). This leads to an organisation unaware if their supply chain is in need for potential improvement. Ying et al. (2018) state that measuring of logistics is an important step to improve performance. Thunberg & Persson (2014) argue that if no measuring of sourcing performance is done, potential improvements will be overlooked. Moreover, Lindén & Josephson (2013) state that the cost of materials in construction often reaches to 45 % of the production cost and that there are a lot of hidden costs in logistics that needs to be discovered, especially the ones connected to handling of material on site. Materials are often delivered to one specific area and then have to be transported to another area. This means that materials are often doubled handled at the construction site (Sundquist et al., 2018). The double handling increases the risk of damaging the materials. Sundquist et al. (2018) further mention other problems connected to construction logistics. Material, equipment and tools is often managed poorly and construction workers often spend a lot of their time searching for both materials and tools. Construction materials often require a lot of storage capacity which is often not available on to- day’s urban construction sites. According to Ying et al. (2014), logistics issues often occur as a cause of inadequate planning and for some cases, material is delivered to a construction site with as little as ten minutes notice. For those cases the site manager urgently have to create temporary teams to help with unloading and as a consequence creating scheduling conflicts and inefficient unloading. Furthermore, the urban area also sets limitations regarding the execution of con- struction logistics (Janné, 2018). Multiple materials and resources must be delivered to and removed from construction sites at the correct time (Janné, 2018). In urban areas, additional transport flows are created and competing with the existing infras- tructure and other traffic users. Urban transports can contribute to issues such as emissions, noise and accidents. At the same time, transportation of goods play an important role in the urban environment (Janné, 2018). According to Carlsson & Janné (2012), the urban transport system is complex, where both goods and passen- gers utilise the same, limited infrastructure. The urban transport system is used by 15 2. Theoretical Framework different vehicles and road users, which can increase the risk of accidents (Carlsson & Janné, 2012). With the increasing urbanisation, a large proportion of transports will take place in complex urban transport systems (Janné, 2018). To be able to manage the material deliveries to urban construction sites, Janné (2018) states that there is a need to improve how construction logistics is coordinated and executed. There are many actors and stakeholders involved and each subcontractor is respon- sible for the procurement of their own materials (Sullivan et al., 2011) which has led to a situation where no one has overall control of the project (Sullivan et al., 2011). As a consequence of this, other stakeholders related to the project are being adversely affected and the overall performance of the project is being diminished (Sullivan et al., 2011). 2.3.2 Construction Logistics Services At the temporary fabric that a construction project is likened with, planning is very important. Révai (2012) states that even if the fabric is temporary it should be thoroughly planned without any emergency solutions in order for the production to be as effective and safe as possible. All construction projects have a construc- tion site plan, including placements and how to utilise the construction site. The construction site plan should include where to place sheds, office spaces, storage of materials, storage containers, recycling station and where to place bigger machines and so on (Révai, 2012). According to Révai (2012), one important part of the of the preparation of the plan is to mark out transport roads and unloading sites to ensure accessibility. As mentioned regarding bigger machines, the crane should be marked on the plan as well as construction elevators, scaffolding and the station for reinforcement (Révai, 2012). Implementation of well-planned logistics, regarding de- livery and storage it is possible to improve the logistics performance in construction (Sundquist et al., 2018). Hulthén et al. (2017) propose that to improve construction logistics, the merging of on-site and off-site logistics should increase together with implementation of technologies. One suggestion to reduce the impact of transportation of goods in urban areas is to employ urban consolidation centres (Allen et al., 2014). If goods from multiple suppliers are consolidated to one shipment, the total amount of transports of goods within cities can be reduced (Janné, 2018). This idea of consolidating goods can also be used in the construction industry, creating construction logistics centres. The aim with a construction logistics centre, a CLC, is to coordinate deliveries to multiple construction sites within an urban are (Janné, 2018). Traditionally, many deliveries arrive to construction sites without coordination. By using a CLC, the amount of deliveries to the site can be reduced. Therefore, the number of times personnel on-site has to receive and handle materials decreases (Janné, 2018). Generally, the procedure when using construction logistics centres starts with the contractor placing orders to their suppliers. These orders can be delivered directly to the construction site or to the CLC (Brunge, 2013). At the same time as goods are delivered, the contractor places a materials delivery booking in a planning system, 16 2. Theoretical Framework which is controlled by the CLC operator (Janné, 2018). The materials arrive from different suppliers to the CLC where they are controlled, registered and stored. When there is a need for specific materials at the construction site, they are packed and delivered to the site. Janné (2018) claims that by using a CLC, issues such as having too much materials on-site can be solved since most of the materials are stored at a different location. Making the CLC a coordinating contact point gives contractors the opportunity to focus on their operations, rather than coordinating deliveries (Sundquist et al., 2018). Figure 2.5 gives an overview of how a CLC works. Figure 2.5: How a CLC can be used in a construction project (Janné, 2018). Often, CLC’s are located close to the construction site or in the form of a warehouse solution further away (Janné, 2018). Both materials and information goes through the CLC which can consolidate materials and information to the construction site. The supplier can deliver directly to the site or to the CLC but the booking and confirmation is handled between the contractor and the CLC. Another construction logistics service is to use a checkpoint (Janné, 2018). In a checkpoint case, the contractor place an order with a supplier and at the same time makes a delivery booking in the checkpoint’s IT-system (Ekeskär & Rudberg, 2016). Time-slots for deliveries are booked and information on sort of materials, type of vehicles, and the volume of goods is specified (Sundquist et al., 2018). According to Janné (2018), when the supplier is ready for shipment, a delivery announcement is sent from the supplier to the checkpoint operator and the contractor. The shipment is then delivered to the physical checkpoint and the shipment is stored until its allotted time-slot and therefore it gets delivered to the construction site (Ekeskär & Rudberg, 2016). In figure 2.6, the material and information flows when using a checkpoint service are described. 17 2. Theoretical Framework Figure 2.6: How a checkpoint can be used in a construction project (Janné, 2018). There are differences between a CLC and checkpoint regarding the materials deliv- eries (Janné, 2018). The main differences concern how the deliveries are planned and carried out. When using a CLC, the focus is on the consolidation of deliveries while the checkpoint takes it point of departure in just-in-time deliveries (Brunge, 2013; Ekeskär & Rudberg, 2016). By using a checkpoint, all deliveries are delivered and stored at a specific location on site (Ekeskär & Rudberg, 2016). Just-In-Time (JIT) is designed for an efficient production with high quality (Akin- toye, 1995). JIT focuses on eliminate waste by reducing the waiting and storage time to bare minimum and at the same time carrying on the work according to a defined and precisely planned schedule (Gao & Low, 2014). In a JIT system, the suppliers are expected to deliver small sizes of materials frequently. Gao & Low (2014) states that the size of the lots delivered is determined by the actual con- sumption of materials and not the forecast demand. Some of the characteristics of JIT-deliveries are continuous flow, quick changeover and integrated logistics (Gao & Low, 2014). According to Tommelein & Li (1999), JIT can be used to describe the delivery of materials to the construction site. Materials will be brought to the project for final installation where they are being installed immediately upon arrival (Tommelein & Li, 1999). The objective with JIT production is to supply the right materials, at the right time and in the right amount in each step of the process (Tommelein & Li, 1999). The planning process is influenced by external factors such as weather conditions and environmental factors. As a consequence of this, the precise timing of deliveries can be difficult to achieve (Sullivan et al., 2011). IT-services can be used to simplify digital parts of the construction process (MyLoc, n.d). One example of an IT-service is Myloc, which is a digital platform that can be integrated with other logistics services to increase the efficiency in construction projects (MyLoc, n.d). In a study by Sundquist et al. (2018) it was discovered that the TPL company that is being studied is using a web-based delivery system. All contractors in the study have to book their deliveries of materials through the system five days in advance which improves the conditions for resource exploitation at the construction site (Sundquist et al., 2018). Sundquist et al. (2018) state that this 18 2. Theoretical Framework web portal is a planning device for efficient use of materials handling equipment. If the construction sites’ materials booking are coordinated through IT platforms, the contractors can plan material flows in accordance with demand (Brunge, 2013). 2.3.3 Outsourcing Construction Logistics A suggested form of potential improvement of construction logistics is to outsource these activities to an actor specialised in logistics (Sundquist et al., 2018). Lindén & Josephson (2013) argue that outsourcing of logistics leads to less amount of non- value adding work. Ekeskär & Rudberg (2016) further state examples of activities that a TPL arrangement can include: transport of materials and goods, storage of materials, inventory management such as materials handling and repackaging, information-related activities as tracking and tracing together with distribution planning and lastly, design and reengineering of the supply chain. What kind of TPL-solution and services that is utilised at a construction project depends on the complexity of the project as well as what the client or contractor desires (Ekeskär, 2016). The following figure 2.7 gives an overview of a TPL-arrangement connecting on-site and off-site logistics. Figure 2.7: On-site logistics and off-site logistics connected to an involved TPL- company (Sundquist et al., 2018). In the case study “Third-party logistics in construction: The case of a large hospital project” by Ekeskär & Rudberg (2016) the authors present experiences from a case where the construction logistics is outsourced to a TPL-company. The initial driving force for implementing TPL was based on a perception that it lowered costs. Ekeskär & Rudberg (2016) also verify that assumption in their study as they in the end of the process were able to reduce unit times. Furthermore, other positive effects of 19 2. Theoretical Framework outsourcing of logistics was improved customer satisfaction, reduced tied-up capital (in assets), decreased inventory levels, improved delivery service, increased lead-time performance as well as more efficient operations (Ekeskär & Rudberg, 2016). A common understanding among authors researching TPL is that the workers on a construction site spend less time looking for and handling materials and instead can focus on their expertise of work (Ekeskär & Rudberg, 2016). Ekeskär & Rudberg (2016) claim that outsourcing logistics also generates a better working environment among the workers as the stress level decreases. When the construction workers can focus on their work and activities that adds value to the product instead of handling materials, the project’s productivity will increase (Ekeskär, 2016). When studying a case where logistics is outsourced, Hulthén et al. (2017) mainly discover positive experiences. However, some workers in the study felt that they lost du- ties they needed. They believe that material-handling and moving of materials are well-needed breaks between their regular working tasks. Some suppliers are also negative towards TPL-arrangements at construction projects since they have to pay for deliveries to the TPL-company instead of bringing the materials to site by their own (Sundquist et al., 2018). This leads to that the supplier tries to decrease the amount of deliveries. Additionally, a study executed by Sundquist et al. (2018) also presents the effects from a TPL-arrangement in construction. Material handling is done after regular working hours since at that time, there is no clash between the regular working tasks and the services provided by the TPL-company. At the same time, it is pos- sible for the construction workers to focus on their expertise of work and to have a more continuous work-flow without disrupting from handling of materials. Another positive effect at the construction site is that cranes, forklifts and elevators can be used only for material handling during those hours. By using the machines both during day and night time their utilisation is increased (Sundquist et al., 2018). For this case, one subcontractor was able to reduce their men hours at the construction project because they are not doing any material handling (Sundquist et al., 2018). According to Sundquist et al. (2018), positive effect on site can give negative effects off site. One logistics manager in the Sundquist et al. (2018, p. 59) study states “the prerequisites for efficient logistics on site are to a large extent due to adapta- tions made with regard to off-site logistics in terms of packaging and labelling of materials”. Meaning that suppliers have to make costly adjustments to fit the logis- tical conditions on site as they have to increase the customisation of their deliveries. Suppliers have to change their usual way of work to adapt to the new rules and increasing time for planning since this way of work gives them less flexibility. How- ever, Sundquist et al. (2018) claim that this will strengthen the connection between off-site and on-site logistics. 20 3 Methodology In this chapter, the chosen method of the study will be described. Firstly, the research design is presented. Secondly a presentation of the research process is described and followed by a more thoroughly explanation of the execution of the literature research and the data collection. Lastly, the ethical conduct and the quality of the research is discussed. 3.1 Research Design The research approach in this thesis is based on abductive reasoning. The process of research in an abductive study is iterating between the empirical findings and the theoretical framework (Dubois & Gadde, 2002b). The research consists of a theoret- ical framework that initially was built on previous research and lately complemented by additional research that was considered relevant after the empirical data collec- tion. Therefore, an abductive reasoning is considered to be the most suited research approach. The empirical section in this thesis is partly based on a case study. A case study can be defined as an empirical research strategy that investigates a phenomenon within its real-life context (Halinen & Törnroos, 2005). Case studies can provide a versatile view of a situation in its context. According to Halinen & Törnroos (2005), instead of showing statistical representativeness, case studies offer depth and comprehen- siveness to understand the specific phenomenon that is being explored. Case studies evolve as patterned configurations in interaction with processes that are taking place in the empirical world and what happens to the researcher’s theoretical notions and assumptions during the course of research (Dubois & Araujo, 2007). Dubois & Araujo (2007) refers to this process as “casing”. Casing demands iterative theoret- ical and empirical choices, including reconsideration of the focus of the case study. By using case studies, new findings during the investigation can change the focus or outcome. The boundary of the study is somehow formed throughout the investi- gation and the boundary will not be set until the analysis is written and completed (Dubois & Araujo, 2007). According to Dubois & Araujo (2007), the selection of the case that being investigated is important. The term purposeful sampling describes the process of selecting cases from the perspective of a particular study’s research aims (Dubois & Araujo, 2007). When selecting cases according to purposeful sam- pling, it is important to choose cases that can provide in-depth understandings and insights, rather than empirical generalisations. In this study, the case referred to as 21 3. Methodology “Mandolingatan”, was predetermined from the company Veidekke. The reason that Mandolingatan was selected is mainly that it is a project that have the resources to provide in-depth insights, since the management was allowing that observations and interviews were conducted without any disturbances. The aim with the case study is to understand the processes at a construction site on a deep level, not to be able to make empirical generalisations. Therefore, this is thesis is based on one single case, not several cases. According to Dubois & Araujo (2007), many researchers devote much space to justify their methodological procedures while they overlook the justification of why a case was selected. The relevance of a case is not necessarily known prior to the study and cases can turn out to be relevant for other reasons that was not foreseen in the beginning of the research process (Dubois & Araujo, 2007). Case studies can act as a reference point for theory development and as classic instances of particular phenomena. This is why the case study is chosen to be a suitable approach in this thesis. One of the main difficulties with a case study is handling the interrelatedness of the different elements in the research work. Dubois & Gadde (2002b) state that a stan- dardised conceptualisation of the research process as consisting of different planned “phases” does not take the potential advantages of case research into considera- tion. Dubois & Gadde (2002b) claim that if the researcher instead is constantly going “back and forth” between theory and empirical observations, it is possible to expand the understanding of both theory and the empirical phenomena. The main goal of research is to confront theory with the empirical world and Dubois & Gadde (2002b) refer this process as “systematic combining”, where this confronta- tion is continuous throughout the whole research process. Systematic combining is grounded in the abductive logic described above (Dubois & Gadde, 2002b). Dubois & Gadde (2002b) further state that systematic combining is described as a nonlin- ear, path-depending process where efforts is combined with the ultimate objective of matching theory and reality. Figure 3.1 illustrates the components in systematic combining. Figure 3.1: The process of systematic combining (Dubois & Gadde, 2002b). “Matching” is about going back and forth between framework, data sources, and analysis. This process does not have any obvious patterns; the efforts to match the- ory and reality can take different directions and there is no single way of matching 22 3. Methodology (Dubois & Gadde, 2002b). The second component of systematic combining is the “direction and redirection”. Dubois & Gadde (2002b) state that this is an impor- tant feature to be able to achieve matching. Direction and redirection is about the importance of different sources and data, together with the methods of data col- lection (Dubois & Gadde, 2002b). Multiple sources can contribute to the discovery of new aspects and dimensions of the research problem. According to Dubois & Gadde (2002b), most methods for collecting data is directed towards the search for specific data in line with the theoretical framework and needs to be complemented with efforts that are aiming towards discovery. This can result in redirection of the study. To summarise, systematic combining is a process where the framework, theory, the empirical world, and a case analysis evolve simultaneously. Systematic combining includes two different processes; matching of theory and reality and di- rection and redirection of them (Dubois & Gadde, 2002b). Systematic combining is chosen to be the most suited research approach in this thesis. In the beginning of the research process in this study, the objective was to find the effects that occurred as an outcome of using outsourcing logistics to a TPL-company. The empirical data collection together with the creation of the theoretical framework formed the scope in a different direction. It was found to be more interesting to explore how the effects of using TPL-services could be used in order to increase the productivity at a construction project. Systematic combining allows this process to occur; that the direction can change during the study. The thesis is based on a qualitative research study since qualitative research con- tributes to an understanding of the human condition in different context and of a perceived situation (Bengtsson, 2016). Qualitative data can be collected from in- terviews and observations and are expressed in words, not in quantitative numbers (Bengtsson, 2016). Dubois & Araujo (2007) claim that qualitative research seeks to explain situated events in detail and that this type of studies relies on analytical generalisations. One part of the empirical study is based on semi-structured inter- views. This type of interview consists of key questions that contribute to define the areas that are meant to be explored and at the same time allows the interviewer to pursue an idea or response in more detail (Gill et al., 2008). Gill et al. (2008) claim that this is a flexible approach that allows the opportunity to discover or elaborate information that is important to participants but has not been previously thought of by the interviewer. Semi-structured interviews have prepared questions but gives the interviewee room to speak freely (Bell et al., 2018). The semi-structured in- terviews was a suitable approach since the interviewees is encouraged to give their own thoughts and inputs to contribute to the empirical data collection, but the ap- proach controls that the interviewee is on topic during the interview. Observations were another part of the empirical data collection. The observations provided a deeper insight of the case, the project Mandolingatan. The thoughts of employees at Veidekke will be described in the empirical section in the thesis. 23 3. Methodology 3.2 Research Process The TPL-company CS Logistics, owned by the construction company Veidekke, was created to support different projects with logistics services. There is resistance from contractors to use the logistics services provided by CS Logistics since their services are mainly seen as extra costs, not as value-creating services. The idea of this thesis emerged from this view, that the outsourcing of construction logistics is perceived to be an additional cost and the potential benefits of the logistics services are neglected. If it is possible to proof the benefits of using TPL-services, it could motivate contractors to use these services in their projects. One way of proving this can be by showing that the performance of a project will be improved by outsourcing the logistics. In this thesis, a case study at one construction project was executed. The project that was used as a reference is in the report referred to as Mandolingatan. Mandolingatan was chosen as a reference project by Veidekke themselves. The project was a more or less “typical” housing project, located in a dense area in Gothenburg and with some logistical improvement areas. The next step in the process was to execute a literature study. The literature study made it possible to create a theoretical framework that contributed with knowledge to be able to answer the research questions. Further, an empirical data collection was made, based on interviews, observations and discussions. The empirical data collection was combined with the theoretical framework and thenceforth analysed. The analyse of the cohering of empirical data and the theory lead to a conclusion where the research questions were answered. 3.2.1 Literature Research A literature study was initiated in the beginning of the process to build a base of knowledge around the chosen subject. The study was conducted by using mainly two different search engines; Google Scholar and Chalmers Library, to find rele- vant information. Prior to the research, keywords were identified for searching of literature. These keywords were: construction logistics, third party logistics in con- struction, construction supply chain management, construction logistics solutions, productivity in construction, waste in construction and construction in urban areas. A selection of the literature was then made to find appropriate articles that could contribute with relevant information for the theoretical framework of this report. The research involved characteristics of the construction industry, construction lo- gistics today, challenges regarding logistics and implementation of TPL. Another part of the theoretical framework is the study by Vrijhoef & Koskela (2000), that explore the four roles of SCM in construction. The four roles, together with the conducted TPL-services, serve as a base of different models created to analyse the effects of outsourcing logistics. 3.2.2 Empirical Data Collection The data for the empirical section of the thesis was mainly retrieved from three different sources. These sources were interviews, observations and discussions. The 24 3. Methodology interviewees participating in the study was chosen based on their expertise of knowl- edge that was considered important for the research and based on recommendations from both the supervisor at the construction company and the supervisor from the university. In order to reduce the risk of conducting biased answers, interviewees from other companies than the case company was also invited to participate. These interviews were also conducted to give a broader and deeper understanding of the concept of third party logistics. This resulted in two interviews with three persons from other companies working with TPL. Interviews with persons working at the studied construction site (Mandolingatan) was also conducted, to retrieve knowledge of how production at a construction project is executed, especially with regards to logistics. At Mandolingatan, interviews were made with two supervisors and the site manager. To involve the perspective from the client, one interview was conducted with two representatives from the client at Mandolingatan and one consultant hired by the client. The manager of production development initiated this thesis and has acted as a supervisor representing Veidekke. Information from several discussions with the manager of production development has been used a source of information for the empirical part of the study and has been contributing to the data collection. Lastly, three discussions were executed. Two of them was together with two repre- sentatives from CS Logistics, discussing the effects of the logistics services provided by the company. The other discussion was together with the regional manager at Veidekke. The aim with this discussion was to explore how the effects of the lo- gistics services could increase the productivity at Mandolingatan. The interviewees are listed in table 3.1. Table 3.1: Interview participants: Date Interviewee Alias in report Company Setting Appendix 20-03-11 Egzon Mehmeti Consultant A Prolog Face-to-face A.1 20-03-17 Petter Wadmark Consultant Ba AFRY Online A.2 20-03-17 Jenny Olsson Consultant Bb AFRY Online A.2 20-04-16 Ferman Celik Supervisor A Veidekke Face-to-face A.4 20-04-16 Kristoffer Niklasson Supervisor B Veidekke Face-to-face A.5 20-04-24 Håkan Bowall Site Manager Veidekke Face-to-face A.6 20-03-27 Rasmus Linge Representative A CS Logistics Face-to-face A.3 20-05-07 Rasmus Linge Representative A CS Logistics Online - 20-03-27 Johan Svensson Representative B CS Logistics Face-to-face A.3 20-05-07 Johan Svensson Representative B CS Logistics Online - 20-04-24 Claes Olofsson Consultant C VBK Face-to-face A.7 20-04-24 Anna Runesson Project Manager A Framtiden Byggutveckling Face-to-face A.7 20-04-24 Christer Sjöstrand Project Manager B Framtiden Byggutveckling Face-to-face A.7 20-05-14 Mattias Bylerius Regional Manager Veidekke Face-to-face - The interviews were conducted in a semi-structured way. The questions were pre- pared in advanced but the interviewees were also invited to speak freely expressing their opinions. Face-to-face interviews was sought for, which was almost achieved as nearly every interviewee was available for meeting. One digital interview on-line was executed and one discussion with the representatives from CS Logistics. However, it is beneficial to do face-to-face interviews. During a face-to-face interview it is easier for the interviewed person the answer questions and it is also possible to ask more questions (Dahmström, 2011). Due to unfortunate circumstances regarding the pandemic Covid-19 during the time for empirical research some interviews were rearranged to be executed online instead. In appendix A, it is possible to find the 25 3. Methodology questions that was asked during the interviews were questions was prepared in ad- vance. The discussions did not have any prepared questions and therefore are not listed in the appendix. The data collection additionally consisted of observations. These were conducted at Mandolingatan and included different elements. People working at the construction site was observed during meetings, at the site and in general on the project. The main focus of the observations was to follow the two supervisors at Mandolingatan. The observations are described in the empirical section of the thesis. The aim of the observations was to identify challenges related to logistics during the production phase, how the challenges are managed and communicated. In collaboration with the site manager at Mandolingatan, it was decided which meetings with regards to construction logistics that was relevant to attend. Scheduling meetings and reg- ular planning meetings was then decided to be included in the study because of their connection to construction logistics. Additionally, the two site managers were observed during three days to identify challenges, interruption or other work that could be identify as potential waste, if they had help with the logistics from a TPL- actor. Tables consisting of the executed activities by the supervisor can be found in appendix B. Details regarding the observations is presented in the table 3.2 below. Table 3.2: Observations made during the study. Date Observed Setting Appendix 20-03-10 Scheduling meeting At Mandolingatan - 20-03-17 Scheduling meeting At Mandolingatan - 20-03-23 Supervisor A On site at Mandolingatan B1 20-04-02 Supervisor B On site at Mandolingatan B2 20-04-03 Supervisor B On site at Mandolingatan B3 20-04-24 Consultation Meeting At the clients’ office at Mandolingatan - After the three days of observations was finished, the second round of interviews begun. First, the two supervisors are interviewed separately. The two supervisors at Mandolingatan have different backgrounds before entering the project. In addition to the interviews, two meetings with the two representatives from CS Logistics was executed. The representatives contributed with valuable information regarding the construction logistics services (CLS) the company offers. The meeting provided insight regarding the organisational structure of CS Logistics, the CLS, and the effect of the CLS and are presented in the empirical section. To be able to confirm some of the identified number from the study, mainly the observations, an additional meeting with CS Logistics was booked. The aim of that meeting was to, with the help of experts in the subject, ask about the duration of some activities. During the study a discussion with the manager of production development was executed in order to identify the organisational structure of Veidekke. Lastly, the discussion with the regional manager was carried out, in order to explore how the effects of different CLS could affect the productivity at Mandolingatan. 26 3. Methodology 3.3 Research Quality Bell et al. (2018) suggest that a qualitative research should be evaluated based on trustworthiness and authenticity in order to ensure the quality of the research. According to Bell et al. (2018), trustworthiness consists of the following four criteria: • Credibility • Transferability • Dependability • Confirmability The first of the criteria, credibility, can be ensured by using the technique respon- dent validation. Respondent validation is executed by the researchers by providing the respondents their contribution to the research to make sure that the findings are understood correctly (Bell et al., 2018). Before publishing this thesis, the respon- dents from the empirical research was sent a copy of the report to make sure that they agreed with the interpretations of their answers from the interviews. Transfer- ability tries to handle the fact that qualitative research tends to be focus on small groups and that the research tends to be depth instead of breadth (Bell et al., 2018). Bell et al. (2018) suggest that when executing a qualitative study, a rich and thick description of the research should be done. By doing a rich description, the reader can make a judgement of their own of the findings in the research. The case study includes one case, since just one construction project is being studied. However, the study provides a picture regarding the construction industry and TPL which is broad, meaning that the study is applicable on other construction projects as well. Furthermore, the study includes views from both the contractors, client and several TPL-actors. This leads to that the criteria of transferability is fulfilled. One suggestion to fulfil the criteria of dependability is to try to keep records of each part of the process and that the others act as auditors of the process to ensure that the processes are being followed (Bell et al., 2018). The research process in this thesis is being described above, where each part of the process is motivated and de- scribed with the purpose to make the method of the thesis transparent. During the whole research process, the research and its chosen processes has been under contin- uous evaluation by the supervisor of the master thesis. Additionally, one opposition occasion and a peer-review has been executed where other students evaluate and ask questions regarding the research. Based on the opinions from the opponents, reconsideration of some parts and more detailed explanation of some of the content was done. These occasions were highly valued for the quality of the final product. The last of the criteria for trustworthiness, confirmability, includes making sure the personal values are kept aside from the research. Both authors have been equally involved in the research to ensure that the study shows a picture that is not in- fluenced by the personal values of the authors. The interviews were also recorded to making sure that what was rendered is correct. Thus, the thesis achieves the criteria of confirmability. Lastly, Bell et al. (2018) discuss authenticity as one as- pect regarding the quality of research. Authenticity is assured in the thesis by, as 27 3. Methodology mentioned, letting several views regarding TPL be brought up to the surface. Both the contractor, client and TPL-actors has been able to contribute with their views of the subject in the research. 3.4 Ethical conduct Bell et al. (2018, p. 114) suggest four main areas regarding ethical consideration of research. The following four areas are suggested to evaluate: • Weather there is harm to participants • Weather there is a lack of informed consent • Weather there is an invasion of privacy • Weather there deception is involved No participant was in any way harmed during the study as the empirical study mainly consisted of interviews and observations executed by the authors. During the observations physical harm was eliminated by attention and the necessary safety equipment that must be worn at a construction site. According to Bell et al. (2018) the principle of informed consent should indicate the participants are given as much information as possible about the study in advance, before they make the decision to participate or not. This was ensured by giving all interviewees as much infor- mation as possible in advance about the interview process, research area and how their expertise could contribute to the research. In the beginning of the interviews they were also told about the topics that they were going to be asked about and discussed during the interview. The interview questions, however, where not shared with the interviewees in advance. This decision was made because it was consid- ered that the interviewees did not get the option to prepare their answers before the interview, their spontaneous answers would be more authentic and reflect their personal thoughts. With regards to every participants privacy, they all were asked if it was approved that the interview was recorded and if they would like to be anonymous and not been named in the report. Those who are named in the report have approved this. The participants are not anonymous because of transparency. Since every participant in the thesis is named, it affects the trustworthiness of their claims as well. Furthermore, Bell et al. (2018) state that the research process should consider how to prevent deception. However, for this thesis the research area and aim has been presented with transparency and as clear as possible for everyone, both participants and other interested in the research. Lastly, for this thesis ethical question has been carefully regarded. The interviewees were chosen only based on their role in a company that was considered to be able to contribute with useful knowledge to our thesis. 28 4 Empirical Study This chapter will process the empirical part of the study and present information and data that has been conducted throughout the process. The first section de- scribes the concept of third party logistics and how it is utilised in the construction industry. In the second section, the construction company Veidekke is described. The third section includes a description of the company CS Logistics, together with the effects of the construction logistics services the company offers. Lastly, the forth section describes the case study Mandolingatan in detail, including findings from observations and answers from interviews. 4.1 Third Party Logistics Services This section explores the concept “third party logistics”. The information has been collected through interviews with respondents working with third party logistics in the construction industry and with representatives from the client, giving their perspectives. 4.1.1 Involvement of Third Party Logistics The logistics need to be taken into consideration already in the procurement phase of a project. “It is not possible to first decide what we should build and how much it will cost and then later start to think about the logistics, in that phase it is often too late”, Consultant A states and adds that once the production phase has started, it becomes difficult to implement logistics services. This is confirmed by the two consultants Ba and Bb. The consultants prefer to be involved as early as possible in a project, preferably when the contractor is procured. The consultants begin with a logistics analysis that explains how the logistics will be executed. It is important to inform the contractor about the logistical conditions of the project. The consultants strive to be involved as early as possible in the process but it is not always that it works. The greatest effects for the customer occur when the logistics is considered at an early stage, preferably before the tendering process. The logistics should not be seen as an emergency solution, one should plan for the logistics before problems occur. This is preferably done early in the process. One of the main tasks when building in urban areas is to emphasise the importance of well-functioning logistics. A risk when building in urban areas is that potential negative effects that can occur, can be strengthen by the effects of projects nearby. 29 4. Empirical Study Most contractors want their material deliveries early in the morning and if this is required by every project in the area, it can create a bottle neck effect. 4.1.2 Logistics within the construction industry There is a difference between the client and the contractor regarding how they per- ceive logistic services and outsourcing logistics. The client has the authority to make decisions while the contractor often wants support with a specific solution. When TPL is used on the initiative of the contractor, solutions such as material storage is often required. When the client is taking the initiative, they often require logistics services as a package solution. It is more common that the contractor perceives the logistics services as an external cost and has some difficulties in seeing the benefits of outsourcing logistics. One reason to this is because of long supply chains and processes. There is a lack of understanding the whole picture of the supply chain and where in the chain benefits will arise. The contractor only sees the actual cost for the service on the invoice. The consultant working with the four projects at Mandolingatan agrees to this and state that it is probably easier to get the client to use TPL, rather than the contractor. Project Manager A from the client states that if a contractor uses TPL-services, they need to have some kind of purpose for using it. Clients does not often demand that the contractor should use specific logistics services in their project. One reason for this is that the client fears that the offers from the contractors will be higher if there is a demand of using logistics services. The consultant coordinating the logistics at Mandolingatan states that if the client demands that TPL will be used in a project, the contractor must take it into account in their offer. The will to change the current ways of working is important and that it is about the customer as an individual, it is not a matter if it is a client or contractor. Consultant Bb refers to a project in the city Umeå, where both Consultant Ba and Consultant Bb was involved with handling the TPL-services. The project in Umeå is a large, complex project where a hospital is being refurbished. The client of this project is very innovative and dare to make changes. The client sees the potential of TPL. Some customers are more careful and does not want to try new ways of working. Consultant Ba agrees to this and states that “one must dare to win”. In this case, they were lucky to find a client that dared to work this way but that is even harder to find brave project managers. Since the project manager is responsible for their project, they are more resistant to make any decisions with perceived risks. Even though it is possible to proof the benefits and effects of using TPL, there are still resistance of implementing the services. If the management at a construction com- pany decides that TPL is going to be used, the project managers that are responsible for their own projects still makes the decision not to follow this. “It is a journey to make them to take this decision”, Consultant Ba states. Using the services from a TPL-company was proposed for the four projects at Man- dolingatan but Project manager B declined this suggestion. The project manager did not see how it could be beneficial for the project. According to Project manager B, 30 4. Empirical Study TPL is required when executing large projects with a lot of ongoing businesses and with a large number of actors and contractors. Project manager B take the project in Umeå, where Consultant Ba and Consultant Bb was involved, as an example. “That project was impossible to perform without using TPL”, the project manager states. Project manager A also agree to this and state that in the project Umeå, TPL was a necessity. TPL-services can lead to time savings but probably most in complex projects. In a normal project, Project manager B does not think that TPL is useful. The consultant hired by the client explains that a large benefit of TPL is the possibility to use JIT-deliveries. Materials that are not being delivered to the right place, at the right time, are moved approximately three to five times before it is being used which increase the risk of damaging the materials. JIT-deliveries can be a solution to this, since materials are delivered when they are required. The same consultant further believes that it is possible to get more efficient projects when using this service, because there is less materials on site which increases the passability at the site. At Mandolingatan, one of the projects requires more space outside the area provided for their construction site. This would not have been nec- essary if a TPL-company was involved. The reason that the consultant was hired to coordinate the logistics at Mandolingatan was because the four projects was meant to be executed parallel with each other and that is only one road for transport and deliveries of materials. The two project managers from the client perceived that this was a possible risk that could hinder the four projects and therefore, a consultant was hired. Logistics have gained more attention over time and several individuals working in construction industry understand the importance of well-functioning handling of materials. Because of the urbanisation and that new construction projects are be- ing executed in dense areas, there are high demands regarding the handling and delivery of materials. Since the construction site is crowded there is no room for material storage on site which also can result in safety issues. Further, Consultant A gives an example of this by stating that no one that lives close to a construc- tion site should be exposed to the risk of being hit by construction vehicles. Since more construction projects are located in urban areas, the importance of logistics is enhanced. There is a difference between how the industry previously worked with construction logistics compared with today. Each construction company is trying to optimise their own supply chain while several construction projects from different companies are located next to each other. For the project in Umeå, it is the same client for the whole area and therefore, every contractor and their deliveries can be coordinated by the same TPL-company. The connection between the contractors and that everyone involved is taking the city or area’s perspective when looking at the flow of materials are two important factors. The suppliers are beginning to show increased interest to be a part of the supply chain, not just selling materials and to be involved in IT-systems as well. The suppliers are moving towards improving the logistics flow and are starting to see this as a competitive advantage. Some companies are very proactive and works actively with logistics together with planning of materials deliveries. Then there are 31 4. Empirical Study those who “takes the day as it comes”, Consultant A states. In some projects, when there are demands of a logistics solution that is well thought through, there can be a person hired as responsible for the logistics on site with the only task to make sure that everything is working well in the production and that the productivity is increasing. Those projects have come a long way, rather than those projects where the responsibility of logistics is on the site manager where there is no time or resources to handle the logistics. In a large complex project with several actors involved, there are higher demands of coordination and it can be beneficial to have one unit responsible for coordinating the logistics. This to avoid that every actor “make up their own rules”, Consultant Ba states. 4.1.3 Logistics Services Regarding logistics services, one should start with the on-site logistics; the logistics in the production area. Furthermore, the importance of having a well-functioning IT-system is emphasised, since the other logistics services are hard to implement without it. One example of an IT-system that is being used in the industry is My- loc, which support the supply flow in several different steps. Myloc is a support for the workers when they are in need of a product. Logistics services should be imple- mented step by step since the construction industry is conservative and one should avoid making massive changes. Using construction logistics centres for storage is dependent on where the construction project is located. In the project in Umeå,