[Insert WRAP programme area / Final or interim report here]

Efficient Construction Logistics

This report identifies the range of current methods and techniques of

construction logistics being used, both traditional and alternative, and
the role they can play in reducing material waste. It shows what is
driving their use and what the barriers are to their increased uptake.
The report will inform WRAP’s work in this sector to ensure efforts are
focused on the logistics methods where immediate and long-term gains
can be made.

Project code: WAS004-001 ISBN: [Add reference]

Research date: September 2006 – January 2007 Date: DRAFT 23rd January 2007
Front cover photograph: <This is an agency photo. Does WRAP have anything else suitable?>

[Insert appropriate disclaimer here]

Published by
Waste & Resources The Old Academy Tel: 01295 819 900 Helpline freephone
Action Programme 21 Horse Fair Fax: 01295 819 911 0808 100 2040
Banbury, Oxon E-mail: info@wrap.org.uk
OX16 0AH
Executive summary
This report identifies the range of current methods and techniques of construction logistics being used, both
traditional and alternative, and the role they can play in reducing material waste. It shows what is driving their
use and what the barriers are to their increased uptake. The report will inform WRAP’s work in this sector to
ensure efforts are focused on the logistics methods where immediate and long-term gains can be made.

The context is WRAP’s 2006 – 2008 business plan, which is to:

Divert 1.7m tonnes of construction waste from landfill or avoided primary extraction

Influence the procurement of £10bn value of projects so that requirements are set for waste minimisation,
recycling or recycled content

Assist the construction sector to realise £50m savings by minimising site waste and recycling more.

The research included a desk study, logistics conference, interviews and workshops with logistics suppliers,
constructors and manufacturers, an online industry survey and a survey of CO2 generated by various logistics
methods.

Waste and logistics

There is compelling evidence that on a typical construction project about 15% of the material supplied to the site
(by value) is not incorporated in the construction and is therefore wasted. The interviews, workshops and online
survey show that there is wide agreement that better logistics would have a substantial effect on minimising
waste before it arises from the construction process.

The reasons found for waste arising in construction are:

Reasons Estimated impact by percentage of value of materials received

Over-ordering 5-10%
Damage 3-25%
Off-cuts 5-20%
Packaging (both 1-5%
inappropriate and poor)
Design Change 1-5%
Programming and Planning 1-10%

The drivers for improving construction logistics are the traditional drivers of time and cost, but a new driver has
emerged – the environment.

Methods and techniques of logistics

There are four basic methods of logistics used in the construction industry:

Method Which is Used by

Traditional
Method 1: The business goes to the supplier to pick up materials About 10% of the industry
Method 2: The business has materials delivered to site About 50% of the industry
Method 3: The business uses portfolio analysis to segment ordering About 35% of the industry
processes and call off arrangements
Alternative
Method 4: The business co-ordinates a start-to-end process and tags About 5% of the industry
information, people and materials flows.

An assessment of the potential impact on waste arisings and CO2 emissions shows that the greatest potential
benefits lie in moving the large constructors using method 3 to method 4.

Efficient Construction Logistics 1

In the alternative method there are seven main techniques:

Logistics planning across
full supply chain
Consolidation centre
Just-in-time delivery to
work place
4th party logistics (4PL)
Logistics specialist on site
Demand smoothing
Integrated ICT system
across full supply chain
Constructors have professionally trained logisticians who can plan across the
ranging, procurement, storage, distribution and back loading activities
A distribution facility for materials that receives materials, equipment and plant
and delivers to the sites in consolidated loads
A service of frequent deliveries in work packs, 'pulled' just in time for the trade to
perform the next task
A service to co-ordinate other logistics providers where there is more than one
supply chain
A service to receive deliveries and distribute materials, equipment and plant - just
in time - so that operatives handle materials only when assembling or installing
A service to enable the peaks and troughs in demand to be evened out over a
period of time
An interoperable information system that tags and tracks materials through take
off, manufacture, distribution, assembly and installation.

Conclusions and recommendations emerge from analysing the potential impact and timeframes of the techniques
and assessing the potential for change in various sectors and segments of the construction industry.

Recommendations

The prime objective should be to influence procurement so that the tonnage diverted from landfill and money
savings can be achieved.

As a general rule, civil engineering is less wasteful than building because it already practices JIT (concrete,
aggregates, cabling, etc) and it has become adept at recycling waste either within the project or elsewhere.
Therefore the recommendations refer mainly to building.

The over-arching principles are:

Make the business case for minimising waste

Make logistics planning the norm

Set up start-to-end information systems that include tag and track

Understand the construction process and apply ‘lean’ principles.

Actions to see results within a year

The business case and logistics planning are the guiding principles for short-term gains.

In order to influence at least £10bn of procurement, WRAP should focus on new-build and refurbishment projects
in the following sectors and segments:

Public – housing, schools, health, and central government and agencies including defence, prisons and police

Private – housing and retail.

WRAP should focus on reducing the waste arising from over-ordering, damage, design change, and planning and
programming by encouraging take up of these alternative logistics techniques:

Logistics planning across the full supply chain

Consolidation centres

Logistics specialist on site

JIT delivery to the workplace.

Of these, logistics planning is the top priority because the need for consolidation and logistics specialist on site
will emerge from this action. JIT will follow as a consequence but this must be specified in the logistics plans.
Constructing Excellence is preparing a template for logistics planning and aims to have this ready for consultation
by the end of March 2007.

A two-pronged approach is needed to:

Convince clients about the business case and to demand change from their main contractors

Educate the main contractors (and their supply chain) about the business case and techniques that will
deliver.

Efficient Construction Logistics 2

The risk of delay is a big driver to over-ordering. Therefore part of the solution is to ease penalties on trade
contractors (which some informed developers are already doing).

Unlike existing contracts with hauliers, contracts with logistics contractors need to reflect their involvement in the
risks of delivering the whole project.

Actions to see longer-term results

WRAP’s second strand of actions should focus on the long term. It should commence immediately and run
concurrently with the short term programme. Integrated ICT systems and lean processes are the guiding
principles for long-term gains. The work should also roll out gains pioneered in the short-term campaign.

The extra alternative techniques that should be encouraged in the medium/long term are:

Integrated ICT.

Demand smoothing

4th Party Logistics

Off-site construction.

Integrated ICT and off-site construction will alleviate the remaining reason for waste – off cuts – as well as over-
ordering, damage, design change, and planning and programming.

The recommended actions are all aimed at minimising waste. None of these actions (except perhaps
consolidation and onsite logistics team) will have any appreciable effect on the level of packaging. Evidence from
the workshops shows that the level of packaging is already finely balanced between the minimum needed to
ensure safe delivery and what is needed to survive the abuse suffered on site. Hence, although there have been
some advances in making packaging reusable (such as stillages for delivering windows), minimising packaging
waste will be difficult. Therefore WRAP needs to influence regulations and incentives that will encourage
suppliers to take responsibility for reusing and recycling packaging.

Efficient Construction Logistics 3

Contents
1.0 Introduction .......................................................................................................................... 5
1.1 Brief...................................................................................................................................5
1.2 The project.........................................................................................................................6
2.0 Methods of logistics............................................................................................................... 7
3.0 Logistics providers............................................................................................................... 11
4.0 Analysis ............................................................................................................................... 13
4.1 Methods by sector and segment .........................................................................................13
4.2 Potential to reduce waste and carbon dioxide emissions .......................................................15
4.3 Potential impacts of techniques and time frames..................................................................16
5.0 Conclusions ......................................................................................................................... 17
5.1 Focus on industry sectors and segments .............................................................................17
5.2 Focus on logistics methods and alternative techniques..........................................................20
5.3 Focus on stakeholders .......................................................................................................22
6.0 Recommendations ............................................................................................................... 25
Appendix 1: Research activities and outcomes................................................................................ 28
Appendix 2: CO2 survey ................................................................................................................... 60
Appendix 3: Logistics providers....................................................................................................... 65

Efficient Construction Logistics 4

1.0 Introduction

1.1 Brief

WRAP’s Tender Invitation dated July 2006 outlines the scope of work as follows:

The aim of this work is to identify the range of current methods of construction logistics being used, both
traditional and alternative, and the role they can play in reducing material wastage. The project should identify
what is driving their use and what the barriers are to their increased uptake. The project deliverable will be used
to inform WRAP’s work in this sector to ensure efforts are focused on the logistic methods where the largest
gains can be made.

The project will also be used to start building a sound evidence base, which can be used to advocate the use of
these techniques to reduce construction material wastage. The project will, as a minimum, provide the
information outlined below:

Overview of the traditional and alternate methods of construction logistics market to include the level of
usage, the situations when these services are most appropriate, who is providing the service, which
construction sectors are utilising these techniques, the benefits of and drivers for use and the barriers to
greater uptake.

Identify the key grouping of stakeholders in construction logistics, representing industry bodies,
manufacturers, contractors, logistic providers and provide key contact details.

Identify and categorise the various logistic options which are currently used in the UK construction industry
and provide a description of each and examples from typical sectors.

For each of the logistic categories identified above define:

• the current level of usage as a proportion of the overall market share

• the construction sectors they are used in (for example housing, leisure, retail, health etc.), with the
relevant market share of this sector
• the providers of these services including contact details
• the specific benefits of and drivers for their use
• the specific barriers to further uptake
• indicative effect on material wastage levels (for bench marking against traditional practices), and how
this varies from sector to sector
• the potential to apply to other construction sectors where not currently used
• whether it is likely to have an increased or reduced level of impact on CO2 impact due to transport
mileage.

Identify logistics methods which could be used as exemplars of the benefits of their use in minimising material
wastage.

Analyses of the collated data and recommendations for the key areas where WRAP should target to deliver a
decrease in material wastage in the construction sector through the use of alternate logistics methods.

WRAP’s business objectives

In its 2006 – 2008 business plan, WRAP intends to:

Divert 1.7m tonnes of construction waste from landfill or avoided primary extraction

Influence the procurement of £10bn value of projects so that requirements are set for waste minimisation,
recycling or recycled content

Assist the construction sector to realise £50m savings by minimising site waste and recycling more.

Efficient Construction Logistics 5

1.2 The project

The following research activities and outcomes are summarised in Appendix 1:

Desk study

Logistics conference

Workshops

Industry survey

CO2 survey.

Efficient Construction Logistics 6

2.0 Methods of logistics

Constructing Excellence established, through interviews and workshops, that

constructors use four basic methods of logistics:

Table 1: Methods of logistics

Traditional
Method 1: The business goes to the supplier to pick up materials
Method 2: The business has materials delivered to site
Method 3: The business uses portfolio analysis to segment ordering processes and call off arrangements
Alternative
Method 4: The business co-ordinates a start-to-end process and tags information, people and materials
flows.

Method 1:
This is used by a business that takes orders on a jobbing basis and will then visits trade outlets to procure
materials piecemeal.

Method 2:
This is used by a business that has materials delivered to the site, typically larger projects with a bulk delivery
requirement supplied by trade outlets.

Method 3:
This is used by a larger business with a multi-project programme that can procure materials on a company basis.
Companies may have consolidated accounts or supply bases to improve/reduce administration costs and/or
materials costs through preferential volume discount. Materials will be delivered to site, however the
differentiator between methods 2 and 3 is that waste is reduced by improved processes.

Method 4:
This is used by a business that co-ordinates a start-to-end process and tags information, people and material
flows. Logistics for this type of organisation will include bills of materials produced by software linked to design
and they will most likely provide multiparty procurement deals for projects and apply volume discounts to total
project/programme turnover. Software is in place to share information and co-ordinate activities such as
ordering, warehousing, deliveries and invoicing.

Methods 1-3 are deemed traditional and method 4 is an alternative arrangement not commonly seen. Typically
methods 1-3 will use hauliers to provide transport between each step. Method four will use a logistics contractor
that will aid the application of timely resources.

Many companies, large and small, will use several of these methods on a project. From the main contractor’s
point of view, looking along the tiers in the supply chain the methods revert to lower order models. The caveat is
that the supply chain is a diamond and the levels of sophistication can rise again near the primary industry.

The drivers and barriers to a constructor adopting these methods are:

Table 2: Methods - drivers and barriers

Method Drivers Barriers
Method 1: The business Simple and flexible No barriers – this is the entry level
goes to the supplier to pick Requires minimal planning
up materials
Method 2: The business Minimise own fleet and save time Inability or reluctance to plan ahead
has materials delivered to Suits larger organisation Lack of critical mass
site Potential use or return service
Method 3: The business Potential to save money by strategic Inability or reluctance to plan ahead
uses portfolio analysis to buying and simplified administration Lack of critical mass
segment ordering
processes and call off
arrangements

Efficient Construction Logistics 7

Method 4: The business
co-ordinates a start-to-end
process and tags
information, people and
materials flows.
Understand process and hidden costs in
traditional methods
Increasing environmental constraints
Clients’ expectations
Potential saving in materials (up to
15%)
Set-up costs
Unaware of business case
Relationships that do not encourage
shared risk, open book, etc.

Alternative techniques
Constructing Excellence established, through interviews and workshops, that there are seven techniques which
characterise the alternative method 4:

Table 3: Alternative logistics techniques

Logistics planning across Constructors have professionally trained logisticians who can plan across the
full supply chain ranging, procurement, storage, distribution and back loading activities
Consolidation centre A distribution facility for materials that receives materials, equipment and plant
and delivers to the sites in consolidated loads
Just-in-time delivery to A service of frequent deliveries in work packs, 'pulled' just in time for the trade to
work place perform the next task
4th party logistics (4PL) A service to co-ordinate other logistics providers where there is more than one
supply chain
Logistics specialist on site A service to receive deliveries and distribute materials, equipment and plant - just
in time - so that operatives handle materials only when assembling or installing
Demand smoothing A service to enable the peaks and troughs in demand to be evened out over a
period of time
Integrated ICT system An interoperable1 information system that tags and tracks materials through take
across full supply chain off, manufacture, distribution, assembly and installation.

The logistics providers and manufacturers often used these terms but with significant differences and maturity
compared to the constructors:

Table 4: Different views on the alternative techniques

Techniques
Logistics planning
across full supply
chain
Consolidation centre
Just-in-time delivery to
work place
4th party logistics
Constructors
The site team will plan all
infrastructure process
needed to deliver projects
The use of a space to
deliver today the materials
for tomorrow. The centre
is also used a buffer
between variable process
steps.
A contractor using
methods 1-3 would say JIT
means a planned delivery
turns up on time. A
contractor using method 4
would connect the delivery
time to the immediate
need for the material.
Managing logistics agent to
pull together logistics
operations.
Logistics contractor
Uses ICT and modelling to
integrate resources
The use of regional and
national distribution
centres to store goods for
final distribution
Synchronised information
and materials flows in
process steps
The logistics contractor
manages activity from
procurement to delivery
and backhauling. The
contractor will have the
skills to manage the
process steps
Manufacturers
Uses ICT and modelling to
integrate resources
The use of warehousing to
manage inventory until it
can be delivered
Using haulers or logistics
providers to deliver material
via networks to wholesalers
(60%) or direct to site
(40%)
N/A

1
ICT systems that operate on different platforms and enable seamless communication

Efficient Construction Logistics 8

Logistics specialist on The logistics contractor on
site site provides services to
co-ordinate deliveries with
trade contractors and to
distribute to work places.
These contractors may also
supply security and health
and safety services.
N/A Materials suppliers only
focus on delivery to site.
There are many cases
where a supplier will install
and commission plant and
equipment.

Demand smoothing Views peaks in demand
and seeks opportunities to
reduce resource by
flattening process peaks.
This applies to
programmes of work and
sequences of processes or
trade contractor interfaces
Integrated ICT system Integrated ICT systems to
across full supply provide take off design and
chain procurement, etc. Many
systems exist in the
industry but very little use
of a full start-to-end use.
Views peaks in demand
and seeks opportunities to
reduce resource by
flattening process peaks.
The logistics sector has
many similarities to
construction but uses
systems to co-ordinate
activities across many
steps. These systems
reduce handling of goods
to the absolute minimum
Views peaks in demand and
seeks opportunities to
reduce resource by
flattening process peaks.
The use of MRP II systems
to plan factory time and out
put. Typically order
systems are not connected
to MRP systems

The drivers for improving construction logistics are the traditional drivers of time and cost, but a new driver has
emerged – the environment. The drivers and barriers to a constructor adopting these techniques are:

Table 5: Alternative techniques - drivers and barriers

Techniques Drivers Barriers
Logistics planning Public pressure Inertia
across full supply chain Regulators Fire-fighting culture
Clients Fragmented industry
Consolidation centre Congestion Need to engage suppliers in new way of
Potential to improve productivity working
Perceived cost
Uncertainty about business case
Just-in-time delivery to Better productivity Fear that system will not deliver and
work place Need for synchronisation of supply and consequence for contractual obligations
demand along the whole supply chain and penalties
Need to challenge supply chain to
improve
4th party logistics Need for co-ordination of complex, Belief that constructor can handle it in-
multi-strand supply chains house
Introducing a new concept
Logistics specialist on Congestion Perceived cost
site Productivity Trade contractors do not understand the
Specialist can also manage security, value of this shared service
welfare and some health and safety
duties
Potential reduction in whole-site head
count
Demand smoothing Larger procurement programmes Unable to analyse or appreciate the
Potential to reduce mobilisation costs benefits
and benefit from long-term purchasing
agreements
Too many single concurrent projects
overloading industry’s ability to deliver

Efficient Construction Logistics 9

Integrated ICT system Belief that ICT/integration is key to
across full supply chain improvement
Desire to minimise material and people
resources by maximising information
Lack of exemplars in construction
Big investment and long lead time
Perceived risk of failure
Worry that systems will not work
together
Perception that cost control is removed
and losing the ability to manage risks
and profits.

Some exemplars of the alternative techniques exist in the construction industry. Exemplars are also offered from
other industries.

Table 6: Exemplars of alternative techniques

Techniques Exemplars in Construction sector & Exemplars in other
construction segment industries
Logistics planning Heathrow T5 Private/airports & ports Toyota, Honda, Asda
across full supply chain Walmart, Tesco, etc.
Consolidation centre London Construction Private/commercial Wolseley
Consolidation Centre
Heathrow Consolidation Private/airports & ports
Centre
GlaxoSmithKlein Private/industrial
Manchester City Council Public/housing
Impress Store
United House Public/housing refurb
Just-in-time delivery to Mid City Place Private/commercial Automotive
work place Heathrow Terminals 1-4 Private/airports & ports
4th party logistics T5 Private/airports & ports TBA
Central London Private/commercial
Logistics specialist on Mid City Place and various Private/commercial
site other Stanhope
developments in central
London
Demand smoothing Framework agreements Public sector Toyota
such as RSLs, Kelly
Construction Group
Integrated ICT system BIW, Asite Retail and automotive
across full supply chain

Efficient Construction Logistics 10

3.0 Logistics providers

Constructing Excellence identified 31 logistics providers with a declared interest

in the construction industry. These are listed in Appendix 3.

Having established the scope of alternative methods of logistics, Constructing Excellence surveyed those logistics
contractors with a declared interest in construction to see which companies offered these techniques. The results
are in Table 7. Gaps indicate no response. In this table,
Logistics means "we plan, co-ordinate and operate the complete logistics service"
Haulier means "we are mainly involved in moving goods. Others do the planning and co-ordination"
1 means “we do this in construction”
2 means “we do this in another industry but not yet in construction”
3 means “we do not offer this service”.

It is important to recognise that some of the companies claiming to offer certain alternative techniques may not
have grasped the full implications of this claim (for example, a small company that claims to offer an integrated
ICT system across the full supply chain). Also, large companies that claim to offer these services in other
industries may be a valuable resource for transferring tried and proven techniques to construction. However, the
learning curve for such transfers may be steep; what works in say retailing may not be readily transferable to
construction due to either different processes or ingrained resistance to change.

<it is proposed to reduce this list after one more request for details>
Table 7: Logistics providers and services they offer
Company Service Logistic Consolidation JIT 4PL Onsite Demand Integrated Comment [A1]: In the final
planning logistics smoothing ICT version of the report we will
eliminate all companies that are
Ranked in the top 100 logistics contractors: hauliers only, but we will retain
DHL this classification until the
Logistics returns are practically complete.
Full 1 2 1 1 2 1 2
Wincanton logistics
Kuehne & Full 2 2 2 2 2 2 2
Nagel logistics
TNT
Logistics UK
Gist
NYK
Logistics
(UK)
Eddie
Stobart
WH
Malcolm
ANC Group
Innovate
Logistics
Lloyd Fraser Full 2 2 2 2 2 2 2
Logistics logistics
Stiller Full 1 1 1 1 1 1 1
Group logistics
Canute Full 1 2 2 3 3 2 3
Haulage logistics
Group
Hanbury
Davies

Currie
European
Transport
Sutton &
Son

Efficient Construction Logistics 11

Company Service Logistic Consolidation JIT 4PL Onsite Demand Integrated Comment [A1]: In the final
planning logistics smoothing ICT version of the report we will
eliminate all companies that are
CM hauliers only, but we will retain
Downton this classification until the
TM returns are practically complete.
Logistics
Rhys Davies
Seafield
Logistics
Maxi
Haulage
Aspray
Transport
Erith
Haulage Co
Not ranked in top 100 but known to be active in construction:
CSB Full 1 1 1 1 1 1 1
Logistics logistics
Christian
Salvesen
CAT
Logistics
Wilson Full 1 1 1 1 1 1 3
James logistics
Clipfine
Elliot Full 1 3 1 1 1 1 1
Thomas logistics
Wyse Full 1 1 1 1 1 1 3
Logistics logistics
ASITE
BIW

Efficient Construction Logistics 12

4.0 Analysis
4.1 Methods by sector and segment

Constructing Excellence used the sector analysis from the desk study to create a
matrix that shows the distribution of the four methods of logistics across the
sectors and segments. The segments are sub-divided into new-build,
refurbishment, and repair and maintenance.

The workshops considered initial estimates of the distribution of the methods shown in Table 8. Delegates
questioned and challenged the assumptions. Their most significant criticism was that the incidence of Method 1
was underestimated. This observation reveals that, in even the most sophisticated projects, there is a significant
proportion of small trade contractors still using this entry-level method of logistics when a higher level method is
not (or cannot be) imposed on them by the main contractor.

The estimated use of logistics methods is by proportion. For example the estimated use of method 1 in new-
build public housing is 25% (0.25). The values of construction in each segment are taken from Construction
Industry Segmentation and Analysis, AMA Research Ltd, 2006. The value of construction in each segment is the
product of the proportion by method and the value of the segment. For example the value of method 1 new-
build public housing is £2.6bn x 0.25 = £0.65bn. Constructing Excellence estimated the levels of waste shown
thus “x” and where the survey (Q16) suggested a different level this is shown thus “(x)”.

Table 8: Use of logistics methods by sector and segment

Sector Segment Estimated use of Values of construction Waste
logistics methods
< ~ >
New Refurb RMI New Refurb RMI Total 15% 15% 15%
Public Housing 2.6 1.2 7.1 11 (x) x
Method 1 0.25 0.25 0.5 0.65 0.3 3.55 4.5
Method 2 0.5 0.5 0.5 1.3 0.6 3.55 5.45
Method 3 0.25 0.25 0.65 0.3 0 0.95
Method 4 0 0 0 0
Public Schools 3.5 2.3 2.8 8.6 x
Method 1 0.25 0 0 0.7 0.7
Method 2 0.75 0.75 0.75 2.625 1.725 2.1 6.45
Method 3 0.25 0.25 0.875 0.575 0 1.45
Method 4 0 0 0 0
Public Universities 0.8 0.6 0.7 2.1 (x) x
Method 1 0 0 0 0
Method 2 0.25 0.75 0.5 0.2 0.45 0.35 1
Method 3 0.75 0.25 0.5 0.6 0.15 0.35 1.1
Method 4 0 0 0 0
Public Health 2.6 0.8 1.5 4.9 x
Method 1 0 0 0 0
Method 2 0.5 0.5 0.75 1.3 0.4 1.125 2.825
Method 3 0.5 0.5 0.25 1.3 0.4 0.375 2.075
Method 4 0 0 0 0
Public Roads 0.8 1.4 0.9 3.1 x
Method 1 0.05 0.05 0.05 0.04 0.07 0.045 0.155
Method 2 0.5 0.5 0.1 0.4 0.7 0.09 1.19
Method 3 0.3 0.3 0.6 0.24 0.42 0.54 1.2
Method 4 0.15 0.15 0.25 0.12 0.21 0.225 0.555
Public Railways 0.4 0.8 1.3 2.5 x
Method 1 0 0 0 0
Method 2 0.25 0.25 0.1 0.2 0 0.3
Method 3 0.5 0.75 0.75 0.2 0.6 0.975 1.775
Method 4 0.25 0 0.25 0.1 0 0.325 0.425

Efficient Construction Logistics 13

Public Central 0.8 0.5 0.7 2
Government
and Agencies
including (x) x
defence,
prisons and
police
Method 1 0 0 0 0
Method 2 0.5 0.5 0.75 0.4 0.25 0.525 1.175
Method 3 0.5 0.5 0.25 0.4 0.25 0.175 0.825
Method 4 0 0 0 0
Private Housing 16.8 0.4 15.2 31.7 x
Method 1 0.15 0.15 0.1 2.52 0.06 1.52 4.1
Method 2 0.6 0.65 0.4 10.08 0.26 6.08 16.42
Method 3 0.25 0.25 0.4 4.2 0.1 6.08 10.38
Method 4 0.05 0.05 0.1 0.84 0.02 1.52 2.38
Private Commercial 4.5 1.6 3 9.1 x
Method 1 0.25 0.1 1.125 0.16 0 1.285
Method 2 0.5 0.2 0.75 2.25 0.32 2.25 4.82
Method 3 0.2 0.5 0.25 0.9 0.8 0.75 2.45
Method 4 0.05 0.2 0.225 0.32 0 0.545
Private Retail 2.6 1.9 3.5 8 x (x)
Method 1 0 0 0 0
Method 2 0.25 0.25 0.5 0.65 0.475 1.75 2.875
Method 3 0.75 0.75 0.5 1.95 1.425 1.75 5.125
Method 4 0 0 0 0
Private Leisure 1 2.1 2 5.1 x
Method 1 0 0 0 0
Method 2 0.5 0.5 0.5 0.5 1.05 1 2.55
Method 3 0.5 0.5 0.5 0.5 1.05 1 2.55
Method 4 0 0 0 0
Private Utilities 0.8 1.2 1.5 3.5 x
Method 1 0 0 0 0
Method 2 0.25 0.25 0.5 0.2 0.3 0.75 1.25
Method 3 0.75 0.75 0.5 0.6 0.9 0.75 2.25
Method 4 0 0 0 0
Private Airports and 0.9 0.1 0.3 1.3
ports x (x)

Method 1 0.1 0.1 0.09 0.01 0 0.1

Method 2 0.4 0.4 0.36 0.04 0 0.4
Method 3 0.4 0.4 0.5 0.36 0.04 0.15 0.55
Method 4 0.1 0.1 0.5 0.09 0.01 0.15 0.25
Private Industrial 3.7 0.2 0.7 4.6 x
Method 1 0.1 0.1 0.37 0.02 0 0.39
Method 2 0.5 0.5 1.85 0.1 0 1.95
Method 3 0.3 0.3 0.75 1.11 0.06 0.525 1.695
Method 4 0.1 0.1 0.25 0.37 0.02 0.175 0.565

VALUES
Method 1 11.23
Method 2 48.655
Method 3 34.375
Method 4 4.72
Total 98.98

Efficient Construction Logistics 14

4.2 Potential to reduce waste and carbon dioxide emissions

Constructing Excellence assessed the impact on CO2 and waste reduction to

compare the potential gains from migrating to a higher method of logistics.

Assumptions: CO2 level is derived from the CO2 survey, see Appendix 2. Waste indices are anecdotal as no
reliable measurements exist.

Table 9: Potential CO2 and waste gains by migrating logistics methods

Method How they do logistics CO2 level Encourage Waste Encourage
Business that goes to
1 wholesaler to pick up 1 1
materials
Business that has materials
2 0.66 1
delivered to site
Business that uses
portfolio analysis to
3 segment ordering 0.66 0.9
processes and has call off
arrangements
Businesses that co-
ordinate a start-to-end
4 process and tag, people, 0.33 0.5
information and materials
flows

In terms of both CO2 reduction and waste reduction, moving from method 3 to 4 offers the best overall result.

In terms of CO2 reduction, there is no advantage in moving from method 2 to 3. And the potential to reduce
waste is small.

In terms of waste reduction, there is no advantage in moving from method 1 to 2. This therefore eliminates the
small contractors (a difficult group to influence) from the change focus.

In summary, this analysis indicates the focus should be on moving the major projects and contractors from
logistics method 3 to method 4. This is also the smallest and easiest group to influence.

Efficient Construction Logistics 15

4.3 Potential impacts of techniques and time frames

Constructing Excellence assessed the potential impact of the various alternative

techniques in method 4 and the timeframes needed to see results.

By the third workshop, the list of alternatives was fixed and delegates were asked their views on the potential
impacts and timescales. There were no significant criticisms of the assessment offered by the researchers.

In this table, the potential impact on waste is assessed as high, medium or low. Timescales are assessed as
short (< 1 year), medium (< 3 years> and long (> 3 years).

Although not a logistics technique, off-site construction is included in this table because it was frequently
mentioned in the workshops and the survey, and because it would demand a change in logistics.

The techniques in this table are ranked starting with the greater potential impact and shorter timescales.

Table 10: Alternative techniques - potential impact on waste and timescales

Alternative technique Potential Timescale
Logistics planning across full supply High Short
chain
Consolidation centre High Short
Logistics specialist on site Medium Short
Just-in-time delivery to work place High Medium
Demand smoothing High Medium
4th party logistics Medium Medium
Off-site construction Medium Medium
Integrated ICT system across full High Long
supply chain

Efficient Construction Logistics 16

5.0 Conclusions

5.1 Focus on industry sectors and segments

Applying selection criteria to the analysis of sectors and segments (see 4.1)
indicates which industry sectors and segments offer the most potential for
minimising construction waste.

The selection criteria used in this analysis are:

Segments with a significant value of construction using method 3 logistics

Segments that produce ~15% or more waste

Segments where there is a relatively small number of major constructors that could (as a group) be more
easily influenced than segments with a large number of smaller constructors (this will exclude repair and
maintenance work).

Table 11 shows the results. For example the potential value of procurement that could be influenced in public
housing is £0.65bn (new build) + £0.3bn (refurb) = £0.95bn annually.

Table 11: Selecting sectors and segments

Sector Segment Values of construction £bn Waste Potential
value of
selected
< ~ > segments
New Refurb RMI Total 15% 15% 15% £bn
Public Housing 2.6 1.2 7.1 11 (x) x
Method 1 0.65 0.3 3.55 4.5
Method 2 1.3 0.6 3.55 5.45
Method 3 0.65 0.3 0 0.95 0.95
Method 4 0 0 0 0
Public Schools 3.5 2.3 2.8 8.6 x
Method 1 0 0 0.7 0.7
Method 2 2.625 1.725 2.1 6.45
Method 3 0.875 0.575 0 1.45 1.45
Method 4 0 0 0 0
Public Universities 0.8 0.6 0.7 2.1 (x) x
Method 1 0 0 0 0
Method 2 0.2 0.45 0.35 1
Method 3 0.6 0.15 0.35 1.1
Method 4 0 0 0 0
Public Health 2.6 0.8 1.5 4.9 x
Method 1 0 0 0 0
Method 2 1.3 0.4 1.125 2.825
Method 3 1.3 0.4 0.375 2.075 1.70
Method 4 0 0 0 0
Public Roads 0.8 1.4 0.9 3.1 x
Method 1 0.04 0.07 0.045 0.155
Method 2 0.4 0.7 0.09 1.19
Method 3 0.24 0.42 0.54 1.2
Method 4 0.12 0.21 0.225 0.555
Public Railways 0.4 0.8 1.3 2.5 x
Method 1 0 0 0 0
Method 2 0.1 0.2 0 0.3
Method 3 0.2 0.6 0.975 1.775
Method 4 0.1 0 0.325 0.425

Efficient Construction Logistics 17

Public Central 0.8 0.5 0.7 2
Government
and Agencies
including (x) x
defence,
prisons and
police
Method 1 0 0 0 0
Method 2 0.4 0.25 0.525 1.175
Method 3 0.4 0.25 0.175 0.825 0.65
Method 4 0 0 0 0
Private Housing 16.8 0.4 15.2 31.7 x
Method 1 2.52 0.06 1.52 4.1
Method 2 10.08 0.26 6.08 16.42
Method 3 4.2 0.1 6.08 10.38 4.30
Method 4 0.84 0.02 1.52 2.38
Private Commercial 4.5 1.6 3 9.1 x
Method 1 1.125 0.16 0 1.285
Method 2 2.25 0.32 2.25 4.82
Method 3 0.9 0.8 0.75 2.45
Method 4 0.225 0.32 0 0.545
Private Retail 2.6 1.9 3.5 8 x (x)
Method 1 0 0 0 0
Method 2 0.65 0.475 1.75 2.875
Method 3 1.95 1.425 1.75 5.125 3.37
Method 4 0 0 0 0
Private Leisure 1 2.1 2 5.1 x
Method 1 0 0 0 0
Method 2 0.5 1.05 1 2.55
Method 3 0.5 1.05 1 2.55
Method 4 0 0 0 0
Private Utilities 0.8 1.2 1.5 3.5 x
Method 1 0 0 0 0
Method 2 0.2 0.3 0.75 1.25
Method 3 0.6 0.9 0.75 2.25
Method 4 0 0 0 0
Private Airports and 0.9 0.1 0.3 1.3
ports x (x)

Method 1 0.09 0.01 0 0.1

Method 2 0.36 0.04 0 0.4
Method 3 0.36 0.04 0.15 0.55
Method 4 0.09 0.01 0.15 0.25
Private Industrial 3.7 0.2 0.7 4.6 x
Method 1 0.37 0.02 0 0.39
Method 2 1.85 0.1 0 1.95
Method 3 1.11 0.06 0.525 1.695
Method 4 0.37 0.02 0.175 0.565

VALUES
Method 1 11.23
Method 2 48.655
Method 3 34.375
Method 4 4.72
Total 98.98

Efficient Construction Logistics 18

In summary, the sectors and segments to target are:

Table 12: Target sectors and segments

Sector Segment Value £bn
Public Housing 0.95
Schools 1.45
Health 1.70
Central Government and 0.65
Agencies including defence,
prisons and police
Private Housing 4.30
Retail 3.37
Total 12.42

This would assist WRAP to influence £10bn of construction. The table offers figures for selecting further
segments if WRAP needs a wider campaign.

Efficient Construction Logistics 19

5.2 Focus on logistics methods and alternative techniques

Having concluded that moving from method 3 to method 4 offers the greatest
impact on both waste arisings and CO2 emissions (see 4.2), the focus moves to
deciding which alternative techniques offer the best potential gains, with
particular emphasis on the short timescale.

Table 13 shows the six reasons why materials are wasted in construction, from Appendix 1.

Table 13: Reasons waste arises on construction

Reasons Estimated impact by percentage of value of materials received
Over-ordering 5-10%
Damage 3-25%
Off-cuts 5-20%
Packaging (both 1-5%
inappropriate and poor)
Design Change 1-5%
Programming and Planning 1-10%

Table 14 shows the potential impact that the alternative logistics techniques could have on the reasons for waste.

Table 14: Impact of techniques on reasons for waste

Alternative technique Over- Damage Off Packaging Design Programming and
ordering cuts change planning
Logistics planning High High Low Low High High
across full supply chain
Consolidation centre High High Low Medium Low High
Logistics specialist on Medium High Medium Medium Low High
site
Just-in-time delivery to High High Low Low High High
work place
Demand smoothing High Low Low Low Medium High
4th party logistics High High Low Medium Low High
Off-site construction Medium High High Low Medium High
Integrated ICT system High Medium High Medium High High
across full supply chain

Note that the impact of logistics methods to minimise waste from packaging is generally low because the balance
between the minimum needed for delivery and survival on site is already finely balanced. The manufacturers are
already subject to the Packaging and Waste Regulations. However, the ‘disconnection’ seems to be what
happens after delivery. It would therefore be better to focus on reuse and recycling of packaging.

Actions that should achieve results within a year

From table 10, consider:

Logistics planning across full supply High impact Short timeframe
chain
Consolidation centre High impact Short timeframe
Logistics specialist on site Medium impact Short timeframe
Just-in-time delivery to work place High impact Medium timeframe

It is universally accepted that the more effort put into planning, the better the outcomes. Logistics is based on
rigorous assessment of the need for materials, co-ordinating the manufacture and distribution. In essence,
logistics planning is the number one solution, as borne out in the workshops and industry survey. However, it is
not an easy discipline to impose in an industry that excels in fire fighting today’s problems.

When rigorously applied, JIT logistics is the most effective technique because, by definition, it permits delivery of
only those materials that are immediately required for construction. This simultaneously attacks four of the

Efficient Construction Logistics 20

reasons: over-ordering, damage, design change and programming and planning. But if considered in its own
right, there is a lack of tools and incentives to make it happen. That is why (on its own) it is assessed as a
medium timescale.

Case studies of Heathrow and Mid City Place show that the use of consolidation or logistics team on site has a
significant impact on JIT delivery. And when used together (such as at Stanhope’s central London sites that are
served by the London Construction Consolidation Centre (LCCC) they have a compounding effect on JIT and
therefore on waste. This is because consolidation and the onsite logistics team both employ Kanban systems to
‘pull’ materials when required and therefore enforce discipline and planning on a somewhat chaotic process.

The working exemplars that exist in the industry now offer springboards to implementing these techniques more
widely within a year.

Actions for longer term results

From table 10, consider:

Demand smoothing High impact Medium timeframe
4th party logistics Medium impact Medium timeframe
Off-site construction Medium impact Medium timeframe
Integrated ICT system across full High impact Long timeframe
supply chain

These techniques all offer significant benefits and their practical implications will arise from a well executed
logistics plan. But none is likely to achieve results within a year.

Efficient Construction Logistics 21

5.3 Focus on stakeholders

Following the conference, Constructing Excellence concluded that the main

streams of activity needed to increase the impact of logistics on waste are:

Making the business case for minimising waste

Making logistics planning the norm

Setting up start-to-end information systems that include tag and track

Understanding the construction process and applying ‘lean’ principles.

Of these presenting the business case is essential to encourage greater take up of logistics planning. The
information and lean processes, although part of the business case and planning, will need a longer term to yield
results.

The construction industry is realising the benefits of integration because the change in thinking, as promoted in
the seminal reports Constructing the Team (Latham) and Rethinking Construction (Egan), have taken root. Many
key players have changed mindsets and are ready to ‘rethink’ logistics.

The business case is that up to 15% of the cost of materials could be saved if constructors could stop these
materials entering the value chain. The corollary is that of the 275 million tonnes of materials entering into built
environment per annum, the potentials saving in resources would be up to 40 million tonnes.

With better use of planning for logistics at the front end of the construction process and the associated
information flows and systems, waste could be minimised. This is because more accurate information regarding
quantities would indeed stop materials coming to site needlessly. To achieve this dividend the industry needs a
tipping point, led by the clients, to do the following:

Produce a project logistics plan before any key appointment and ensure it reflects the client’s strategy and
how information, materials and people will flow through processes. The plan will embrace alternative logistics
techniques that will respond to the client’s requirements and benefit the businesses in the supply chain and
the project.

Move constructors from method 3 logistics (currently about 35% of industry) to method 4.

Embrace the industry as an integrated supply chain.

Measure the value in processes.

Publicise and promote exemplars of alternative logistics.

Use open book, target costs and risk and reward strategies in procurement. Extend to tier 1 and 2 suppliers
and manufacturers to achieve the transparency needed to reward innovation and best practice.

The use of alternative logistics in the construction industry and its configuration will depend on client types and
project.

The unnecessary-cost drivers in the construction process could also be valued and reduce further the costs of
delivery. The unnecessary-cost drivers found in this research are the result of broken processes or lack of
evidenced-based management decisions. These are summarised below, together with the main causes of waste
and solutions discovered:

Table 15: Unnecessary-cost drivers, causes of waste and solutions

Affecting Unnecessary-cost Root causes Solutions
drivers
People “Someone else’s problem” Site management gulf Awareness training
Lack of duty of care between tradesperson Higher performance
Lack of Motivation and material costs Logistics to instil
Attitudes/Culture Theft and damage confidence
Lack of team working and Poor skills regarding cost Toolbox talks on waste
integration management
Lack of trust Fear of shortages
Focus on task Lack of understanding
Poor Management and fitting instructions
Skills mix

Efficient Construction Logistics 22

Process Strategic planning
Balancing of materials
supply
Contractual relationships
Tendering, take and Sales
push
Variance in performance
between process steps
Not understanding
upstream and down
stream processes and
interfaces
Volume discounts
Understanding true cost
of the process
Programmes that are not
kept
Service levels poorly
measured
Adversarial contracts and
risk pushed down the
supply chain
Organisational structure Procurement
Recycling advice and it’s
cheaper to process waste
than stop it occurring
Fragmentation
Little understanding of
integration
Supplier not gear to
deliver logistics
Focus is always on site
priorities
Forecasting
No optimisation of supply
chain
Not gear to working on
true costs
Communication and
information flows
Technology an issue.
Table 16 is a matrix of the alternative logistics techniques (as well as off-site construction) ranked by potential
impact and showing which stakeholders need to be engaged in take up.
Table 16: Stakeholders and alternative techniques
Stakeholders Alternative techniques, diminishing impact 
Logistics JIT ICT Consolidation Demand
planning delivery
Community x x
Regulators x x
Project
x x x x
planners
Designers
x x
Over-ordering from other Lean processes
internal processes Quality management and
Not enough recycling control
companies Careful information and
Technical and material procurement processes
properties need over- Consolidation and JIT
ordering processes
Cumulative effect of Rigidly control materials
allowances made in each to site
process step. Better design and take off
Sales push processes
Design processes enhance Offsite construction
waste
Materials on site payment
clauses
Variations
Lack of
design/dimensional co-
ordination
Poor information and
management processes
Poor bills of quantities
Poor handling equipment
Site management
processes
Inappropriate specs
Supply chain weakness Organise for
Damage by other trades standardisation
Bills of quantities Integration
Inappropriate risk Evidence based
No QA processes management/KPIs
Contractual arrangements Logistics plans
Collaboration
Holistic approach to
recycling
Active planning for reuse
Organise for site
production
Designers to fully
understand costs
Logistics processes are
high energy users, use
this information to help
reduce waste
Backhauling
Logistics 4th party Off-site
smoothing specialist logistics construction
on site
x x x
x x x x
Efficient Construction Logistics 23
Estimating &
x x x x x x x x
procurement
Manufacturing x x x x x x x x
Delivery x x x x x x x x
Installation x x x x x x x x
Specialists x x x x x x
Disposal x

Efficient Construction Logistics 24

6.0 Recommendations

Given the short timescale of WRAP’s 2006-2008 business plan, Constructing

Excellence recommends a clear focus on those actions that will achieve short-
term results and those that will take longer to payback. The prime objective
should be to influence procurement to reduce over-ordering so that the tonnage
diverted from landfill and money savings can be achieved.

As a general rule, civil engineering is less wasteful than building because it already practices JIT (concrete,
aggregates, cabling, etc) and it has become adept at recycling waste either within the project or elsewhere.
Therefore the recommendations refer mainly to building.

The over-arching principles are:

Make the business case for minimising waste

Make logistics planning the norm

Set up start-to-end information systems that include tag and track

Understand the construction process and apply ‘lean’ principles.

Actions to see results within a year

The business case and logistics planning are the guiding principles for short-term gains.

In order to influence at least £10bn of procurement, WRAP should focus on new-build and refurbishment projects
in the following sectors and segments (see 5.1: Focus on industry sectors and segments):

Public – housing, schools, health, and central government and agencies including defence, prisons and police

Private – housing and retail.

WRAP should focus on reducing the waste arising from over-ordering, damage, design change, and planning and
programming by encouraging take up of these alternative logistics techniques (see 5.2: Focus on logistics
methods and alternative techniques):

Logistics planning across the full supply chain

Consolidation centres

Logistics specialist on site

JIT delivery to the workplace.

Of these, logistics planning is the top priority because the need for consolidation and logistics specialist on site
will emerge from this action. JIT will follow as a consequence but this must be specified in the logistics plans.
Constructing Excellence is preparing a template for logistics planning and aims to have this ready for consultation
by the end of March 2007.

Section 5.3: Focus on stakeholders shows who must be engaged in this process. A two-pronged approach is
needed to:

Convince clients about the business case and to demand change from their main contractors

Educate the main contractors (and their supply chain) about the business case and techniques that will
deliver.

In most cases, the recommended entry channel is via the major main constructors who are working in the target
sectors and segments. This is because they are relatively few in number compared to the other stakeholder
groups and they lead established supply chains. The top players are listed in AMA’s report Construction Industry
Segmentation and Analysis. Once contact is made with these major players and they are convinced of the
business case, the next channel is via their clients.

Dialogue with clients and main contractors must include contractual terms offered to trade and logistics
contractors. The research revealed:

Contracts that penalise trade contractors for delays are probably the biggest single cause of over-ordering
because the risk of having insufficient materials weighs heavily on trade contractors who build it into tenders.

Contracts with hauliers usually bear no relation to project risks. When stepping up from hauliers to logistics
contractors, the terms of contract should reflect their vital role in delivering projects.

Efficient Construction Logistics 25

Housing
Entry to housing will be easier in the public sector than the private sector (which is three times as large) because
the public sector is already adopting change en masse via the Housing Corporation and the Housing Forum,
which is part of Constructing Excellence. Once a start is made in public housing, it will be a matter of transferring
the improvements to the private sector where there is a much larger potential gain.

Schools, health and central government

These segments are increasingly managed under framework agreements which have led to some consolidation
and integration of supply chains. These agreements are usually governed by key performance indicators that are
periodically changed to accommodate emerging business drivers (such as minimising waste).

Retail
This segment is dominated by a relatively small number of clients who have already caused big changes in their
supply chains, mainly driven by retail thinking. This is the only segment where the entry channel should be via
the clients. Again, the top players are listed in AMA’s report. But be aware that some of these commercial
relationships will make it difficult to realise the potential of waste minimisation, for example sharing the
dividends.

Logistics providers
There appears to be logistics providers ready to offer alternative logistics techniques (see 3.0: Logistics
providers). While the number with hands-on construction experience is limited there is an abundance of
expertise already providing similar services in other industries. These companies are well organised to manage
logistics planning, warehousing and distribution. But these cannot be relied upon in the short term because they
will have a learning curve to adapt to construction. So in the meantime it will be necessary to nurture the
emerging construction logistics specialists listed as ‘not ranked’ in the top 100 logistics companies.

Other agencies
The key agencies that WRAP should work with include:

Transport for London (TfL)

Greater London Authority (GLA)

Chartered Institute of Logistics and Transport (CILT)

Chartered Institute of Builders (CIOB)

Construction Products Association

Housing Corporation

Constructing Excellence.

Actions to see longer-term results

WRAP’s second strand of actions should focus on the long term. It should commence immediately and run
concurrently with the short term programme. Integrated ICT systems and lean processes are the guiding
principles for long-term gains. The work should also roll out gains pioneered in the short-term campaign.

The extra alternative techniques that should be encouraged in the medium/long term (see 5.2: Focus on logistics
methods and alternative techniques) are:

Integrated ICT.

Demand smoothing
th

4 Party Logistics

Off-site construction.

Integrated ICT and off-site construction will alleviate the remaining reason for waste – off cuts – as well as over-
ordering, damage, design change, and planning and programming.

Integrated ICT
Of these, the most important is Integrated ICT because it has the power to open communication along and
between supply chains. Experience in the retail and automotive industries show the importance of ICT in supply
chain integration, JIT delivery and traceability of components from design through manufacture, distribution,
assembly, installation, commissioning, operation, refurbishment and eventual demolition. This research has not
discovered any full systems in construction but there are partial systems operated by manufacturers and
constructors in isolation from each other. Therefore Constructing Excellence recommends that the entry channel
should be via those logistics suppliers who claim to offer such systems.

Efficient Construction Logistics 26

Demand smoothing
The construction industry is notorious for its irregular demand cycles. Demand smoothing (including forecasting)
is widely practised in the retail and automotive industries, but the patterns of demand are different. Hence,
Constructing Excellence recommends WRAP would derive the most benefit from demand smoothing via the
framework agreements that are consolidating demand in the public and private sectors. Funding cycles in public
sector procurement will also be important.

4th Party Logistics

4PL is a niche specialist logistics service that co-ordinates various supply chains for one customer (or main
contractor). In principle, it is transferable to any major construction project and the need should be apparent in
the logistic plan. WRAP should look to the logistics specialists with the know-how and technology needed to run
a 4PL service.

Off-site construction
Also known as pre-assembly and off-site assembly, this is not rated in the short-term actions because the
decision to construct offsite must start with outline planning and it takes some time to percolate down the supply
chain. Nevertheless, results should be expected in large procurements within a couple of years. This is a rapidly
emerging ‘sub’ industry and the recommended entry channel is via BuildOffSite, which is managed by CIRIA.

Packaging
None of the actions mentioned so far (except perhaps consolidation and onsite logistics team) will have any
appreciable effect on the level of packaging. Evidence from the workshops shows that the level of packaging is
already finely balanced between the minimum needed to ensure safe delivery and what is needed to survive the
abuse suffered on site. Hence, although there have been some advances in making packaging reusable (such as
stillages for delivering windows), minimising this waste will be difficult. Therefore WRAP needs to influence
regulations and incentives that will encourage suppliers to take responsibility for reusing and recycling packaging.

Efficient Construction Logistics 27

Appendix 1: Research activities and
outcomes
The research was done in five stages:

Desk study
Logistics conference
Workshops
Industry survey
CO2 survey

Desk study – Summary

This desk study is the first stage in the “Efficient Construction Logistics” study commissioned by WRAP.
Subsequent stages are Industry Survey (including CO2), Interviews and Workshops, Logistics Conference and
Technical Report.
The purpose of this report is to:

assemble the knowledge that Constructing Excellence has obtained by desk study of the current state of
‘logistics’ and ‘waste minimisation’ in the construction industry

suggest how better deployment of logistics could further reduce the amount of material waste in construction
and increase the proportion of residual waste that can be reused or recycled

identify next steps in the study.

This report includes primary (factual) research as well as some secondary (interpretative) research based on
tangible and anecdotal evidence. Unless stated otherwise, statistics refer to the whole of the United Kingdom.
The waste investigated in this report is solid waste.

Scope and size of the construction industry

The annual value of the UK construction industry is about £107 million, which is about 9% of GDP.
There is a large proportion of small enterprises which increases the difficulty of implementing change.
The ‘Pearce’ report is the best available summary of how the industry behaves.
The ‘AMA’ report is probably the most up-to-date and extensive collection of industry statistics available.
Next steps:

Use the extensive ranked lists in the ‘AMA’ report to identify organisations and then find key individuals (from
the Constructing Excellence database) to include in surveys, interviews and workshops.

Use this analysis of sectors and segments to select sites for visits to investigate the relationship between
logistics and waste minimisation.

Scope and amount of waste produced in construction

It is apparent from a note provided by WRAP that there is conflicting data on the amounts of waste and the uses
to which it is put.
Although the amounts of waste quoted in the ‘Viridis’ report are probably low, it has been possible to extrapolate
equivalent data from the OPDM report. The conclusions in this section are the best guide available for the
amounts of waste created, recycled and ‘disposed of’.
The industry could work towards a two-stage objective to first eliminate waste sent to landfill then eliminate
waste sent to exempted sites.
Next steps:

WRAP should review the analysis in this section for errors and omissions.

Determine the scope of ‘exempted’ sites to see whether there is any valid use for this waste before using this
figure in any waste elimination target.

Size and scope of the logistics sector serving construction

The value of distribution only is about £2bn in the construction industry. This does not include modern logistics
services that could reduce the amount of waste produced and increase recycling.

Efficient Construction Logistics 28

Compared with the retail and manufacturing industries (where logistics has already been fine-tuned), the
potential benefits of applying modern logistics in construction remain largely untapped. The biggest single barrier
to changing this is the inappropriate ownership of the logistics processes by the suppliers.
Next steps:

Investigate the distribution of the four models of who ‘does logistics’.

Investigate what main and trade contractors mean by logistics and how much they believe they are paying for
that service.

Distribution channels
Distribution channels in construction are numerous.
The potential for both process and material waste is high.
Responsibility for logistics is fragmented.

Logistics methods used in construction

The methods of logistics vary according to the sophistication of the constructor and the technology used.
Eight principles of logistics, when applied to construction, show a large gap between best practice in construction
and manufacturing or retailing.
Consolidation is an ‘easy win’ which can impose logistical discipline on a chaotic industry.
Although this study focuses on material waste, the broader definition of waste includes energy as well as money
and human resources wasted through inefficient processes.
The Japanese automotive industry has led the way in defining waste (in terms of process and materials) and
designing production systems and managing the whole supply chain to achieve better results more efficiently.
These ideas are now widespread in the UK manufacturing industry. Through this rigorous management of the
supply chain, manufacturing has been transformed into an industry that is much less wasteful.
The construction industry needs to embrace these ideas in order to progress from dealing with the effects of
waste to eliminating the causes.
Next steps:

Investigate the distribution of the four logistics methods and any other methods.

Investigate how the methods of logistics vary according to sector and supply-tier arrangements.

Investigate the take up of modern logistics methods using the eight principles of logistics as a guide.

Investigate the existence and scope of reverse logistics processes in the construction industry.

Stakeholders in construction logistics

There is a wealth of data on trade associations and institutes with an interest in construction logistics. Following
the 80:20 rule, the approach will be to focus attention on those who are best placed to influence change and
those with the know-how (possibly gained in other industries) to make it happen.
Next steps:

Obtain contacts from Construction Products Association for the directors responsible for packaging and waste
minimisation (may be different people) in the top product manufacturers and distributors. Use this list to
investigate existing methods of logistics and potential to improve logistics processes and offer reverse
logistics.

Involve members of CILT’s Construction Industry Supply Chain Forum in the surveys, interviews and
workshops.

Use the lists mentioned above to identify persons to represent clients, consultants and contractors in
interviews and workshops. The agenda will be to investigate sector and supply tier arrangements, existing
methods of logistics, potential to improve logistics processes and offer reverse logistics.

Market share
The market share is unclear because the extent of logistics services supplied to the construction industry is
largely invisible in accounts and many companies have declined to give this information.
The UK’s top logistics contractors are already providing modern logistics services to the retail and manufacturing
industries. Hence they have much to offer in transferring these best practices to construction. But more work is
needed to establish contacts in the key logistics contractors who have so far “declined to comment”.
Next steps:

Obtain introductions to those logistics contractors whose construction interests are listed as “unknown” or
“declined to comment”. This might be best achieved via CILT.

Interview the business development directors of logistics contractors mentioned above to determine what
opportunities they see in construction and what value they can bring to improve logistics. Explore options to
offer and/or improve reverse logistics services.

Efficient Construction Logistics 29

Studies in logistics and waste minimisation
This work is incomplete.
Next steps:

Obtain and draw conclusions from those selected references highlighted in Appendix 2 to inform the
preparation of surveys, interviews and workshops. In particular, look examples of best practice in logistics
services provided for construction and other industries, and for evidence of successful logistics and reverse
logistics systems that may be transferable to construction.

Demonstration projects
This desk study reviews 25 demonstration projects with themes logistics and/or waste minimisation. This section
lists the benefits and lessons learned. The activities demonstrated were:

using a specialist logistics contract on site

using a Consolidation Centre for distribution

dealing with contaminated soil

using tag technologies

logistics problems on congested sites

recycling generally

applying logistical solutions

ideas from manufacturing

demolition generally

recycling plasterboard

recycling aggregates

analysing waste

substituting materials

co-ordinating projects.

Waste minimisation schemes

This desk study has identified potential actions to minimise waste and which stakeholder(s) is responsible. The
actions can be divided into three types:

Reduce the amount of waste created in the chain of construction processes

Increase the amount of waste that is recycled.

Increase the amount of recycled materials and products that are used in new projects.

There is plenty of activity in various networks, approaches and schemes. What seems to be missing is a single
strategy for joining all these initiatives together.
WIN is a portal for accessing those decisionmakers dealing with waste in local authorities. An important caveat is
that most will be primarily involved in municipal waste.
Next steps:
In a survey of construction professionals, determine:

the extent of use of these schemes and services

other schemes and services being used to minimise waste.

With permission of WIN, include these decisionmakers in a survey to identify:

those with an interest in construction waste

local waste minimisation schemes that address or could be extended to address construction waste.

Impact of logistics on waste levels

Waste arises from five sources: over-ordering, packaging, damage, off cuts and demolition.
Modern logistics can be applied to every source to reduce its volume and/or increase recycling.
Current industry advice is mainly limited to dealing with waste (by recycling).
The industry has a chronic problem of over-ordering. Tackling this problem alone would reduce the volume of
waste enough to achieve the first objective of eliminating waste sent to landfill.
Tools exist (mainly in manufacturing and retailing) to make a radical impact on process and material waste.
Reducing process waste offers the best financial incentives to the stakeholders because it will have an immediate
impact on profits.
Once a culture is established to reduce process waste, the accompanying reduction in material waste will achieve
WRAP’s objectives.

Efficient Construction Logistics 30

Logistics conference

"The Art of Applying Timely Resources"

London, 21st November 2006

Constructing excellence arranged this conference to support three concurrent projects all with a logistics theme:

London Construction Consolidation Centre - a two-year trial of Consolidation to serve sites in central London,
sponsored by Transport for London

Logistics plan for the construction industry, sponsored by the Department of Trade & Industry

Efficient construction logistics, sponsored by WRAP.

There were some 50 delegates representing most of the stakeholders in construction logistics.

Welcome: Don Ward, Chief Operating Officer, Constructing Excellence

Chair: Steve Agg, Chief Executive, Chartered Institute of Logistics and Transport

Agg mentioned his background in retail logistics where cost and service have been the big issues. Now, a third
issue is challenging logistics - environment.

Presentation 1: New Drivers for Construction Logistics

Adrian Boughtflower, Freight Co-ordinator, Transport for London (TfL)

This presentation looks at the challenge of how to sustain the growth of London without clogging up the
transportation network. Boughtflower explains the success of the London Construction Consolidation Centre
which is consolidating deliveries to several inner-London sites at a warehouse outside the congestion zone. The
centre is showing substantial reductions in the environmental effects that road transport has on the capital.
+15%

Rising demand
0

Falling capacity
-15%

2006 2016 2026

Figure A1: London’s transport dilemma:

TfL’s key statistics for logisticians:

By 2026 London’s population will grow by 1.2 million.

By 2016 there will be 310,000 new homes and office space will increase by 7-9million m2.

This work alone represents £10 billion of construction projects.

TfL is planning for demand for goods and services to rise by 12% -15%, freight movements to increase by
15% as well as increased passenger movements.

At the same time, road and rail capacity will fall by 10%.

Discussion 1: Drivers, barriers and stakeholders

Drivers: Cost, Quality, Environmental and Delivery for to utilise a holistic logistics approach or not. In other
words what will the drivers need to be to get you embrace logistics from your part of the industry?
Barriers; what is stopping people addressing logistics in their part of the supply chain, are they the relationships
in the in the industry, preventing you from embracing logistics, they have not thought about it, what knowledge
is required for you part of the industry to embrace logistics?
Who are the stakeholders and what do they need to do to drive logistics forward?

SUMMARY

Drivers (in no particular order):

Efficient Construction Logistics 31

 • concern for the environment
• increased regulation
• how to make construction a sustainable industry
• concern about loss of materials
• concern about security
• logistics can improve KPIs: programme certainty, productivity, cost
• contractor demand for more efficient processes, for example JIT
• need to move deliveries away from peak times to avoid congestion
• potential to use existing fleets for 'reverse' logistics
• site constraints
• limited potential to recycle or reuse waste.

Barriers (in no particular order):

• invisible costs and no way to extract savings from improved methods

• lack of understanding of the problem
• fragmentation of the industry
• lack of leadership and champions
• business case not yet demonstrated
• disconnection between investment and benefit
• disconnection between designers and the supply chain
• ineffective ICT systems
• an immature collaborative culture.

Stakeholders:

• the community - understand the issues and demand change

• regulators - a joined-up regulatory framework that is enforced, monitored and reviewed
• project planners - more work on logistics plans and accounting for waste
• designers - understand the problem and facilitate change via the design and specification
• estimating and procurement - understand the waste component of cost
• manufacturing - innovation and collaboration
• delivery - adapt/adopt successful supply chain management systems from other industries
• installation - demand transparency of cost of supply and delivery
• disposal - maximise reuse and recycling and optimise use of vehicles
• specialists - educate the community and communicate to all stakeholders.

Presentation 2: Logistics centres and construction logistics in the urban environment

Gary Sullivan, Managing Director, and Ian Lister, General Manager, Wilson James

Following on Adrian Boughtflower's explanation of the benefits of consolidation, this impressive video
presentation shows how a consolidation centre works and the impact it has on both the environment and the
efficiency of construction. The video (192MB) can be obtained from Adrian Blumenthal.

Presentation 3: Logistics within BAA, from a tools and people point of view
Tim Brent, Integrated Logistics Leader, BAA

Brent shows how BAA's proposed redevelopment of Heathrow Airport will capture the many lessons learned in
the successful construction of Terminal 5. BAA is in no doubt that logistics has a key role to play and logistics
plans are already well advanced.

Presentation 4: Advanced supply chain optimisation

David Hills, UK Country Manager, Inform

Hills presents what was potentially a 'heavy' technical session in a lively and interesting manner. He
demonstrates how his company uses mathematical optimisation to set up the most effective delivery schedule,
using computer-aided scheduling. He gives examples of the hardware and tools needed and also how to strike
the right balance between customer service and cost efficiency.

Efficient Construction Logistics 32

Presentation 5: National distribution systems and how to save 18% of the cost of materials supply
using logistics
Matt Nicholls, Business Development Director, Wolseley

Nicholls explains how Wolseley embarked on a £100m investment programme three years ago to create a 'world-
class supply chain'. He describes their nationwide distribution system, together with a logistics flow chart along
the whole supply chain. The investment has yielded simultaneous service improvement AND cost reductions.
There is substantial use of consolidation in the supply process. He demonstrates environment benefits and
knock-on improvements in project efficiency.

Discussion 2
In the context of the stakeholders, what is important in relation to logistics?
What is the key Logistics input into the process steps that needs to be considered/developed for this stakeholder
group?
What is the key output into the next stage of the process?
What do you think the unnecessary-cost drivers are?
How can we improve flow between each step of the process?

SUMMARY

The groups, each representing a stakeholder, discussed what their inputs might be to a logistics plan and what
outputs they should expect from the plan.

Table A1: Stakeholders in logistics planning

Inputs
Community
regulation by town planners, local
authorities, police, highways, etc.
consultation with developers
Regulators (central government,
local government and clients)
consistent message - evidence that
regulations are 'joined up'
early involvement in projects
clear guidance and support
Designers
appropriate whole-life brief
collaboration with manufacturers
Project planners
drivers: cost, quality and time
regulations
Estimating/procurement
clear objectives with a long-term
view
clear scope
Outputs Unnecessary-cost drivers Comment [A2]: AB to
restrictions on working hours, populate this column where
conference did not report
access routes and parking
construction methods (for example
off-site assembly) that impose less
strain on the community's quality of
life - noise, safety, fumes, vibration
and traffic
job opportunities
economical and practical logistics
plans
measurement of end results not
just the parts
collaborative supply chains
less waste for disposal
communication and education
specify most appropriate materials
two-way information flow
risks understood and transferred to
the right stakeholders
procurement route nice to haves
programme diverting from agreed plan
JIT demand fulfilment uncontrolled changes
access routes and hours logistics consultants(!)
suitable vehicles and plant imposed trade contractors
off-site assembly unnecessary process steps
security
industrial relations
community relations and local
employment
continuous improvement
innovation movement, storage and damage
reward shortage of skilled labour
early inclusion in projects waste of materials
assembly plan lack of planning

Efficient Construction Logistics 33

Inputs Outputs Unnecessary-cost drivers Comment [A2]: AB to
components of costs programme unpredictability populate this column where
conference did not report
identification of waste
risks
Manufacturers flow improvement
manufacturing time v. customer's communication and trust
order/call-off production and delivery on time and
demand forecast in full
quality of forecasts
involvement of customers
Constructors practicability
upstream logistics (by certainty of cost and programme
manufacturer) undamaged goods at the delivery
visibility of demand point
joined up approach by other right place and right time
stakeholders managed risks
expertise
expectations and trust

Presentation 6: Uses of logistics in the UK construction industry and waste minimisation

Phil Wilson, Construction Project Manager, WRAP and Adrian Blumenthal, Special Projects Director, Constructing
Excellence
Wilson explains WRAP's remit in the construction industry and outlines their ambitions to reduce the waste arising
from construction as well as increased recycling. The current two-year business plan has specific measurable
objectives for its sustainability goals. The headline figures show that, on average, 15% of material supplied to
construction sites is wasted; up to 45% for some materials. Blumenthal outlines the results of a desk study
Constructing Excellence has done. He summarises the key reasons for waste arising: over-ordering, packaging,
damage, off cuts and demolition. This presentation sets the scene for the final discussion about how the industry
can prevent waste arising in the first place.

Discussion 3
How can waste can be minimised and prevented to coming onto site in the first place?
What are the broken processes that need to be fixed?
What does each stakeholder in the construction process need to address to fix the processes or stop waste
happening?
What are the key learning points from the day?

SUMMARY

Since this conference, Constructing Excellence has assessed the potential for each idea to minimise waste and the
time frame needed to implement the idea, shown in Table A2.

Short time frame means results within a year, medium time frame means results within three years and long time
frame means results will take more than three years.

Table A2: Ideas for minimising waste – potentials and timeframes

Idea Potential Timeframe
design for manufacture and High Medium
assembly
off-site assembly Medium Medium
use of recycled components Low Short
better use of off cuts High Short
CAD-CAM See design for manufacture and assembly
order what's needed High Short
minimise storage High Short
tag and track materials High Medium
tax empty containers Low Short
packaging fit for purpose Low Short
logistics 'how-to-do-it' guide Medium Short

Efficient Construction Logistics 34

business case High Short
ICT systems High Long
logistics plan with KPIs High Short
rewards for adherence and delivery High Short
understand cost of waste High Short
education and training High Medium
optimise fit, form and function High Medium
stillages and reusable packaging High Short
The table on the next page summarises the ideas and suggests which stakeholders could act.

Notice how ICT systems will impact on nearly all stakeholders.

Following the conference, Constructing Excellence concluded that the main streams of activity needed to increase
the impact of logistics on waste are:

Business case

Planning

Information (incl. tag and track)

Process.

Key learning points (in no particular order):

• Industry needs to think through logistics from start-to-end of supply chains

• Industry needs a strong financial driver for change
• Rewards needed to encourage participation
• Regulation and cost (NOT collective ‘will’) will drive change will create the tipping point
• Need to develop and publicise new approach to logistics
• Need for robust ICT systems that enable communication along the supply chain
• Cost of disposal needs to rise further
• Need to invest in education in order to increase awareness of the problem in order to be able to
understand and improve
• Large number of small traders will be a particular issue in educating for change
• Many answers may already be 'out there', especially in best practice transferring from other
industries.

Table A3 shows a matrix of ideas for minimising waste and who would be involved.

Efficient Construction Logistics 35

Table A3: Ideas for minimising waste – who would be involved
project estimating and
IDEAS community regulators designers manufacturing delivery installation specialists disposal
planners procurement
design for manufacture and
x x x x
assembly
off-site assembly x x x x x x
use of recycled components x x x
better use of off cuts x x
CAD-CAM x x x
order what's needed x x x
minimise storage x x x
tag and track materials x x x x
tax empty containers x x x
packaging fit for purpose x x x x
logistics 'how-to-do-it' guide x x
business case x x x
ICT systems x x x x x x x
logistics plan with KPIs x x x x x x
rewards for adherence and
x x x x
delivery
understand cost of waste x
education and training x x
optimise fit, form and function x
stillages and reusable packaging x x

Efficient Construction Logistics 36

Workshops

Constructing Excellence held three workshops each attended by four to six members of these stakeholder groups:

logistics contractors and consultants

construction contractors

construction product manufacturers.

Separate workshops we held for each stakeholder group in order to gain a clear stakeholder response by reduce
the potential for friction between stakeholders.

Table A4: Agenda for workshops

Welcome and introductions
Background of the research so far
Logistics processes – key stages, activities and tools
The generic construction process
Overlay logistics on the generic construction process
flows of information, people and materials
Methods of logistics – traditional and alternative methods, distribution across industry
Methods of logistics
confirm range of traditional and alternative methods
assess where methods are used
benefits, driver and barriers
exemplars
What is material waste – where, how and why it occurs
Causes
the reasons it occurs
the underlying root causes
Break
Solutions
prioritise the root causes
propose solutions
Results of previous workshops
Prioritise actions
identify the common threads of actions
the priorities – why, what, how and when
Summarise and close
Lunch
Tour of the Consolidation Centre

Logistics, construction and manufacturing processes

Table A5 shows the steps in the processes determined in each workshop. After the workshops, Constructing
Excellence correlated the three processes.

Table A5: Processes correlated across logistics, construction and manufacturing

Logistics process Construction process Manufacturing process
Ranging – marketing, forecasting Regulatory planning
and specifying
Design Design
Take off quantities Take off quantities
Project planning and programming Lead time planning

Procure logistics resources Procure work packages Procure materials

Planning distribution
Manufacture Manufacture
Storage
Distribution Deliver Deliver
Assemble and install
Backload Waste management Waste management

Efficient Construction Logistics 37

It was apparent from the workshops that, while communication was reasonably effective vertically, it was the
horizontal communication and alignment of the process that raised doubts.

Methods of logistics
Constructing Excellence proposed four basic methods of logistics. None of the delegates offered any significant
changes.
Traditional
Method 1 Business that goes to the supplier to pick up materials
Method 2 Business that has materials delivered to site
Method 3 Business that uses portfolio analysis to segment ordering processes and call off arrangements

Alternative
Method 4 Business that co-ordinates a start-to-end process and tags information, people and materials flows.

During the workshops the delegates described various techniques that they would expect in the alternative
method 4:
• Just-in-time delivery to workplace
• Logistics specialist on site
• Consolidation
• Integrated electronic information systems for take-off, manufacture, delivery, installation
• Off-site assembly (is this logistics?)
• Lean processes
• Inter-modal transport
• Synchronised supply chain
• Regional distribution centres
• Empowerment of logistics personnel to intervene in deliveries, common user plant, on-site storage,
wasteful activities
• Managing logistics agent to pull together all logistics operations (4th Party Logistics)
• Detailed logistics plan
• Demand smoothing
• Contracts that engage logistics supplier on project risks and rewards.

Constructing Excellence later divided these into cause and effects and concluded that the delegates had identified
seven alternative techniques:

Logistics planning across full supply chain

Consolidation centre

Just-in-time delivery to work place

4th party logistics

Logistics specialist on site

Demand smoothing

Integrated ICT system across full supply chain.

Reasons waste arises

Before the workshops, Constructing Excellence had identified four reasons. Delegates added two more, making
six main reasons why waste arises in construction. There was considerable debate about the percentage
contributions of all the reasons. Although some of the logistics specialists from other industries were quite
surprised by the average 15% waste figure offered by WRAP, none of the construction delegates disputed this
figure.

Over-ordering (5-10%)
Damage (3-25%)
Off-cuts (5-20%)
Packaging (both (1-5%)
inappropriate and poor)
Design Change (1-5%)
Programming and Planning (1-10%)

Efficient Construction Logistics 38

Underlying causes
Although the delegates offered many causes for each of the reasons, common threads emerge in Table 6.

Table: A6: Underlying causes of each reason that waste arises

Reasons for waste
Logistics specialists
Over-ordering Over specification
Shrinkage
Lack of trust in suppliers
Lack of historical
knowledge
Inaccurate take off
Fear of failure
Damage Lack of care
Congestion
Poor housekeeping
Over-ordering
Inappropriate packaging
Unsuitable pack sizes
Too much or inefficient
handling
Unsuitable storage
Poor sequential working
Overzealous construction
manager(!) moving trades
along
Off-cuts Pack size
Shrinkage
Inadequate instructions
Cheaper to throw away
than reuse
At the standardisation in
the design
Packaging (both Packaging that is only
inappropriate and poor) suitable for transportation
and not beyond
Packaging is insufficiently
robust for reuse
Design Change Late client decisions
Impractical design
Programming and
Planning
Underlying causes
Constructors Manufacturers
Unreliable information Trade contractors use
Poor take off done in a over-ordering to mitigate
hurry the risk of not meeting
“allow 10%” mentality the contractual obligations
compounded through Poor process the takeoff
purchasing process and estimating
Compensate for expected Habit
losses
Bulk-buy deals
Standard pack sizes
A safety net
Poor labelling Poor handling
Too much material on site Multiple handling
Multiple handling
Inappropriate equipment
and handlers
Lack of training
Bulk deliveries
Over-ordering leads to Design
lack of interest in using Manufacturing restrictions
off cuts
Design is not considering
standard size is
Need to protect against Suitability beyond the
the damage expected on point of delivery is not a
site high priority for
Multiple movement manufacturers
Value engineering leading
to savings, despite waste

Barriers to change:
Lack of true and logistics people in the construction industry
The percentage fee mentality is a disincentive
there is a reluctance to share knowledge
contracts for the inputs do not yet reflect the risk and rewards in construction.

Solutions:
There was general agreement among delegates that the by level methods of logistics were more likely to have
lower levels of waste. As the alternative techniques emerged there was general agreement that these would be
effective in minimising waste. In the last workshop (with the manufacturers) Constructing Excellence offered
Table 7 showing potential impact and timescales. There was no significant disagreement about this assessment.
Note that although off-site assembly is offered as a solution, it is not driven by logistics but would have a
significant knock-on affect on logistics.

Efficient Construction Logistics 39

Table A7: Techniques – potentials and timescales
Alternative logistics techniques Potential impact Timescale to achieve results
Logistics plan High Short
Consolidation centre High/medium Short
Just-in-time delivery to the High Medium
workplace
Fourth party logistics agent High/medium Medium
Demand smoothing High Medium
Logistics specialist on site Medium Short
Integrated ICT and tagging etc High Long
Off-site assembly High/medium Medium

The workshops also offered some specific solutions that may or may not have a logistics impact:

Table A8: Solutions

Over-ordering Education - the good news (opportunities) and bad news about waste
The level of waste is affected by decisions made in the early procurement
process
The solution will require more integrated-team thinking
There could be a milestone in the call-off process for the final order to
include in a carefully evaluation of remaining need.
Damage The key is better handling - who, equipment, how, training
Off cuts Design is a two-stage process. The principle of standardisation is
important that the concept stage and the minimisation and reuse of off
cuts is important that the detail stage.
Packaging The amount and method of packaging is already very finely balanced by
the manufacturers. The scope for a big impact here is low.

Other observations from the workshops:

The two logistics professionals who do not work in construction said they were shocked by the apparent degree
of inefficiency and level of waste.
The manufacturers noted unplanned orders typically 2-5% but they expected this to be much higher for
distributors.
There was frequent mention of the need for sites ‘pull’ only the materials needed, rather than permit the supply
chain to 'push' more materials are now needed.
There is a move towards buying clubs and fewer supply chains, which may have a beneficial effect on the level of
waste.
There is a need for logistics personnel on-site to be empowered to:
• control what comes to site
• co-ordinate on-site storage and common user plant
• intervene in wasteful activities.
Contracts need to be redrafted so that logistics suppliers engaged in project risks.
Logistics plan is needed very early in a project. This should become more detailed as it cascades down the
supply chain.
Manufacturers mentioned Materials Resources Planning (MRP) as a technique for forecasting and creating long-
term plans.
To manufacturers confirmed that they are now having conversations with customers about waste, and that this
had only started happening in the last 12 months. The driver for this is apparently the need to know how much
waste is likely to arise so that the trade contractor knows how much disposal will cost. This has led to some
manufacturers offering waste management service. This might be free (such as pallet removal and recycling) or
paid (such as recycling off cuts).
One manufacturer reported that they are investigating switching to plastic pallets with RFID tags to enable
tracking, recovery and reuse. It would require up to two years to get this going and a £1 million investment.
Half the manufacturers were involved in off-site assembly. Although this was a small sample, it was interesting
to note there level of waste was generally less than 5% and about 70% of that is recycled.
The manufacturers offered three issues for dialogue with the construction industry:
• Expose the cost of waste

Efficient Construction Logistics 40

 • Those creating the waste must be responsible forgetting would have (although there is some
ambiguity about who is ‘creating’ it
• Designers must take more responsibility the minimising waste.
Consolidation centres could benefit manufacturers by:
• Quicker and easier deliveries
• The delivery time is no longer critical
• Handling after delivery is by ‘experts’, hence fewer disputes about damage
• The selection of vehicles for delivery is less critical.

Efficient Construction Logistics 41

Industry survey

The purpose of the survey was to test various ideas the project team had about waste and also to obtain ‘grass
roots’ opinions about the causes and solutions. The survey was conducted online by broadcasting an invitation to
the Constructing Excellence database of industry contacts. There were 190 valid responses.

Questions and responses Analysis

1. What is your organisation’s role in construction? 50% were contractors (assumed to
be ‘constructors’) and 20% public
Industry role sector clients.

60%
50%
40%
30% Series1
20%
10%
0%
s

vil
s
lic

ls
s

ice

at

or
ct

ci

ci
ub
riv

ct
ite

un
rv

s
-p

ra
-p

er
se
ch

Co
nt

ne
s
Ar

s
g

Co
nt
nt
in

gi
ie
ld

ie

En
Cl
ui

Cl
B

2. Which construction sector is the main demand for your The largest segments represented
services? were public housing and private
Public Housing
commercial buildings.
Construction sector that is main demand for your services?
Private Housing Although the value of private housing
25.0%

Schools is three times public housing, the

20.0%
Constructing Excellence database is
Universities
15.0% biased towards public housing
Health because it includes the Housing
10.0%
Forum which more public sector
Roads
5.0% members than private sector.
Railway
0.0%
1 Central Government incl. defence,
prisons and police

Construction sector that is main demand for your serivces?

14.0% Commercial
12.0%
Retail
10.0%
Leisure
8.0%
Utilities
6.0%

4.0% Airports and ports

2.0% Industrial

0.0% Other
1

Efficient Construction Logistics 42

3. Which construction activity is the main demand for your More than 60% are engaged in new
services? build.

Which construction activity is the main demand for

your services?

70.0%
60.0%
50.0%
40.0%
30.0%
20.0%
10.0%
0.0%
New Build Major refurbishment Repair and maintenance

4. What is the typical value of construction projects that you 25% are engaged in projects less
deal with? than £1m in value and 70% in
projects less than £10m.
What is the typical value of construction projects
that you deal with?

50.0%
40.0%
30.0%
Series1
20.0%
10.0%
0.0%
1. Less than 2. £1 million 3. £10 million 4. More than
£1 million to less than to less than £50 million
£10 million £50 million

5. To what extent do you think the quality of the logistics 63% say logistics affects the amount
service affects the amount of waste arising from construction? of waste “quite a lot”
90% say “quite a lot” or “a little”.
To what extent do you think the quality of the
logistics service effects the amount of waste
arising from construction?

70.0%
60.0%
50.0%
40.0%
30.0%
20.0%
10.0%
0.0%
1. Quite a lot 2. A little 3. Not at all 4. Not sure

Efficient Construction Logistics 43

6. How much do you think logistics costs the construction <This chart is incorrect. AY to
industry? These are percentages of the total cost of investigate.>
construction.

How much do you think logisitics costs the

construction industry?
% of total cost of construction

80
70
60
50
40
30
20
10
0
1. <5% 2. 5% to < 3. 10% to < 4. >20% 5. Don't know
10% 20%

7. Do you think the logistics services used in the construction 45% say logistics is either fit for
industry are fit-for-purpose in terms of ''the timely positioning purpose ‘a little’ or not at all.
of construction materials''? More than 20% don’t know.
Do you think the logistics services used in the
construction industry are fit-for-purpost in terms
of "the timely positioning of construction
materials

40.0%

30.0%

20.0%

10.0%

0.0%
1. Quite a lot 2. A little 3. Not at all 4. Not sure

8. If you answered Question 7 ''A little'' or ''Not at all', tell us Key words and phrases:
why.
Key messages from the responses: Arriving in bulk, too early

Delivery systems are cost driven, thus in bulk with full loads
preferred, but don’t arrive when promised and are constrained by Not when promised
vehicle use.
Lack of planning

Waste occurs because of lack of planning and co-ordination by all
parties concerned.
Trade contractors driven by
programme but logistics cannot be

There is not enough use of JIT.
relied upon to keep up

Logistics services aren’t sufficiently geared to the variability of
demand for materials (in terms of timing and quantity). Not JIT

A lot of construction processes are on a critical path and, if delays Does not respond to variable demand
occur and co-ordination is lost, sub-contractors start missing their
window. No incentive for suppliers to plan
timely delivery

There is little co-operation or culture of planning since suppliers just
want to sell their goods and don’t have any incentive to programme
Outsourced to the cheapest supplier
and plan for timely positioning of construction materials.

Deliveries are outsourced to the cheapest man with a van or UPS or Not enough pre-assembly
DHL who have no commitment to the project or the user.
Risks on trade contractors.

Many bread and butter materials are brought on site too early, laid
down and have to be manually transferred, leading to damage, bad

Efficient Construction Logistics 44

 housekeeping and health and safety problems.

Pre-fabricated items are not used enough.

Contractors’ management want to transfer all risk in materials onto

subcontractors, to make life easier.

9. Here are some perceptions of logistics issues in the

construction industry. Do you agree?
The service levels that customers expect are
poorly understood

70.0%
60.0%
50.0%
40.0%
30.0%
20.0%
10.0% 70% agree service levels not
0.0% understood
Strongly agree Agree Disagree Not sure

There are too many suppliers managed under

adversarial contracts rather than service level
agreements

50.0%
40.0%
30.0%
20.0%
75% agree too many suppliers under
10.0%
0.0%
adversarial contracts
Strongly Agree Disagree Not sure
agree

Construction is not yet investing enough in

technologies which enable the sharing of
information between customers and
suppliers

70.0%
60.0%
50.0%
40.0%
30.0%
20.0% 90% agree not enough ICT
10.0%
0.0%
Strongly Agree Disagree Not sure
agree

Capture and management of data does not

generally extend beyond purchasing

60.0%
50.0%
40.0%
30.0%
20.0%
10.0% 65% agree data is unknown beyond
0.0% purchasing
Strongly Agree Disagree Not sure
agree

Efficient Construction Logistics 45

 There is little visibility of good in the supply
chain. Standard technologies in other industries,
such as bar coding, have made little impact.
Hence it is difficult to reduce material waste
because it cannot be tracked.

60.0%
50.0%
40.0%
30.0%
20.0%
10.0% 75% agree not enough tracking of
0.0% materials
Strongly Agree Disagree Not sure
agree

The way goods are sourced and distributed

is largely driven by suppliers. It leads to a
confusing system of distribution which
conceals waste

70.0%
60.0%
50.0%
40.0%
30.0%
20.0%
10.0% 75% agree distribution system
0.0%
Strongly Agree Disagree Not sure conceals waste
agree

Material wast is taken for granted and built

into the cost plan. Waste of any
description is not widely monitored and
few targets for improvements are set
60.0%
50.0%
40.0%
30.0%
20.0%
10.0%
80% agree waste is taken for
0.0%
Strongly Agree Disagree Not sure granted and built in to the cost plan
agree

More complete information is needed from

designers to enable better estimating of
quantities

60.0%
50.0%
40.0%
30.0%
20.0%
10.0%
0.0% 85% agree better design information
Strongly Agree Disagree Not sure is needed for estimating quantities
agree

Buyers tend to over order because of

bulk ordering contracts and percieved
risks of uncertain estimates and losses

60.0%
50.0%
40.0%
30.0%
20.0%
10.0% 70% agree buyers tend to over-order
0.0%
Strongly Agree Disagree Not sure
agree

Efficient Construction Logistics 46

 Estimates of quantities are often
inaccurate and include allowances for
the unknown
70.0%
60.0%
50.0%
40.0%
30.0%
20.0%
10.0% 80% agree estimates of quantities
0.0%
are inaccurate with allowances for
Strongly Agree Disagree Not sure
agree the unknown.

10. In the types of projects you are currently involved in, which
of these models best fits how logistics is managed?
In the types of projects you are currently involved in,
which of these models best fits how logistics is managed.
1. Contractor goes to wholesaler to
pick up materials then drives to site.
60.0%

50.0% 2. Contractor has materials

delivered to the site.
40.0% 85% use the traditional methods 2 or
30.0% 3. Contractor carefully analyses 3
material requirements, segments the
20.0% ordering processes and has call-off <10% use the alternative method 4,
arrangements.
10.0%
4. Contractor coordinates start to but see conflicting evidence in Q12
end process and tags people,
information and material flows.
0.0%
1 5. Not sure

11. Looking at the input and output sides of your role, tell us The purpose was to see whether the
which of these methods of logistics applies, and then which industry thinks the buyer or the seller
method you think should apply. should be responsible for logistics.
Logistics on your INPUT side
Given the high proportion of lorries
50.0% either owned by manufacturers or
45.0%
40.0% contracted to manufacturers, it is
35.0% surprising to see that respondents
30.0% Actually happens
25.0% claim about 60% of logistics is
20.0% Should happen
15.0% managed by the buyers.
10.0%
5.0%
0.0% The same pattern exists for input and
Buyer contracts out Buyer manages Seller contracts out Seller manages
logistics to third logistics in-house logistics to third logistics in-house
output transactions.
party party
Asked who should manage logistics,
Logistics on your OUTPUT side the respondents would prefer to see
a move towards in-house
50.0% management. This probably reflects
45.0%
40.0% a disenchantment with hauliers who
35.0%
30.0% Actually happens
merely pick up and deliver.
25.0%
20.0% Should happen
15.0%
10.0%
5.0%
0.0%
Buyer contracts out Buyer manages Seller contracts out Seller manages
logistics to third logistics in-house logistics to third logistics in-house
party party

Efficient Construction Logistics 47

12. Here as some 'alternative' methods that affect logistics. A surprisingly high proportion claim
Please choose any that your organisation uses in the sector you to be using JIT deliveries. It
identified in question 2. emerged in the workshops that some
Alternative methods that affect logistics that your
constructors interpret JIT as meeting
Just-in-time delivery to the
organisation uses workplace a delivery schedule that is governed
50.0% On-site logistics gang by site constraints rather than
45.0%
demand for materials at the
40.0% Consolidation (logistics) centre
35.0% workplace.
30.0%
Off-site assembly
25.0%
20.0%
Although only 10% say they are
Synchronised supply chain using method 4 (see Q10), a
15.0%
10.0% surprisingly high proportion claim to
5.0% Inter-modal transport
0.0% be using some of the alternative
1 Electronic ordering AND tracking techniques in this method. This
difference may reflect how
Are there any others? respondents interpreted the
'In Plenty of Time' delivery meanings.
Strategic partnering
Managed warehousing Purchasing clubs are an emerging
Supply & store on site prior to use trend and may support initiatives to
Purchasing club
minimise waste.

13. When you buy materials do you know how much the
delivery costs?
When you buy materials do you know how much the
delivery costs?

60.0%
50.0%
40.0%
30.0%
20.0%
>50% don’t know the cost of delivery
10.0%
0.0% <30% know the cost of delivery of
Generally, we do not We know the delivery We know the delivery most things
know what the delivery cost of MOST things we costs of SOME things
costs. It is included in buy. we buy
the price.

14. When you buy materials do you know where they come
from and how far they travel?
When you buy materials do youknow where they
come from and how far they travel?

40.0%
35.0%
30.0%
25.0%
20.0%
15.0%
10.0%
5.0% >25% do not know the origins of
0.0% supplies
Generally, we do not We know the origin of We know the origin of
know the origin of things MOST things we buy. SOME things we buy.
<35% know the origins of most
we buy. things

Efficient Construction Logistics 48

15. On average, 15% of the materials supplied to construction Key words and phrases:
sites in the UK are not actually used in the project and becomes
waste. Why do you think this happens? Over-ordering ‘just in case’
Key messages from the responses:

Buyers over-order, rounding up ‘just in case’ and trying to avoid Avoid minimum delivery charges
minimum delivery charges rather than avoiding waste.
Damage due to site environmental

Damage occurs due to bad handling, poor site management, theft factors
and the culture of people who are motivated only to get the job
done.
Cheaper to use new than off cuts

The need for speed and the frequency of client changes make it
cheaper to use new materials rather than take time to seek discarded Design dimensions induce waste
ones, especially since the 15% is covered in the costs at tender
stage. Lack of communication in a
fragmented industry

Design teams don’t work with architectural dimensions to reduce off
cuts. Most waste is from floor, ceiling and wall finishes. Inaccurate estimating.

The lack of proper communication in the supply chain means the

construction process is fragmented and there is a history of
inaccurate estimating so sites become a mass of waste and surplus
material, supposed to be very ‘active’ but actually unsafe and messy.

16. If the industry's average waste is 15%, what is your It was difficult to frame this question
estimate of waste for the sector you indicted in question 2? without leading the respondent. The
purpose was to get an industry
If the industry's agerage waste is 15%, what is your estimate of waste
response to the 15% headline figure
for the sector you indicated in qu 2?
and compare the relative levels of
50.0% waste across the segments.
40.0%

30.0%

20.0%
Nearly 60% say waste is about 15%
10.0%
or more.
0.0%
1. Less than 15% 2. 15% is about 3. More than 15% 4. Not sure
right

Correlating responses to Questions 2 and 16 gives an estimate of waste

in each sector:
Industry Role comparison with Estimate of Waste within that sector This generally confirms what was
expected.
16
14

12 Many segments report 15% or more

10
8 1. Less than 15%
2. 15% is about right
6
3. More than 15%
There is not enough data to form a
4
2 4. Not sure
4. Not sure view about some segments
3. More than 15%
0 2. 15% is about right
Public Housing

Private Housing

1. Less than 15%

Schools

Universities

Health

Efficient Construction Logistics 49

 Industry Role comparison with Estimate of Waste within that sector

16
14
12
10
8
6
4 1. Less than 15%
2 2. 15% is about right
3. More than 15%
0 3. More than 15%
Roads

Railway

1. Less than 15%

Central Government
4. Not sure
Commercial

Retail

Industry Role comparison with Estimate of Waste within that sector

2 1. Less than 15%

1 2. 15% is about right
4. Not sure
3. More than 15% 3. More than 15%
0 2. 15% is about right
4. Not sure
Leisure

Utilities

1. Less than 15%

Airports and ports

Industrial

Other

17. Here are some suggested reasons for this waste. Estimate
what PROPORTION OF THE VALUE of materials supplied to sites
is a result of:
Over-ordering

35.0%
30.0%
25.0%
20.0%
15.0%
10.0%
5.0%
45% say over-ordering is > 6%
0.0% 49% say over-ordering is <6%
1. Less than 2. 3% to less 3. 6% to less 4. 10% to less 5. More than 6. Not sure
3% than 6% than 10% than 15% 15%

Inappropriate or excessive packaging

35.0%
30.0%
25.0%
20.0%
15.0%
10.0% 63% say packaging waste >3%.
5.0% This is a surprisingly high value.
0.0%
1. Less than 2. 3% to less 3. 6% to less 4. 10% to 5. More than 6. Not sure
3% than 6% than 10% less than 15%
15%

Efficient Construction Logistics 50

 Damage

45.0%
40.0%
35.0%
30.0%
25.0%
20.0%
15.0%
10.0% 67% say damage waste >3%
5.0%
0.0%
1. Less 2. 3% to 3. 6% to 4. 10% to 5. More 6. Not sure
than 3% less than less than less than than 15%
6% 10% 15%

Loss or theft

70.0%
60.0%
50.0%
40.0%
30.0%
20.0%
37% say loss and theft >3%
10.0%
0.0%
1. Less than 2. 3% to less 3. 6% to less 4. 10% to less 5. More than 6. Not sure
3% than 6% than 10% than 15% 15%

Unsuitable or faulty materials

60.0%

50.0%

40.0%
30.0%
20.0%

10.0%

0.0% 40% say waste from unsuitable or

1. Less than 2. 3% to less 3. 6% to less 4. 10% to less 5. More than 6. Not sure faulty materials >3%
3% than 6% than 10% than 15% 15%

Off cuts that cannot be used in the project

30.0%

25.0%

20.0%
15.0%
10.0%

5.0% 68% say waste from off cuts >3%

0.0%
1. Less than 2. 3% to less 3. 6% to less 4. 10% to less 5. More than 6. Not sure
3% than 6% than 10% than 15% 15%

18. For each of these reasons, what do you think is the root Key words and phrases:
cause and how can the logistics service reduce the amount of
waste due to this reason? Safety net

Over-ordering - root cause Enormous cost of delay if short of

Key messages from the responses: materials

Estimators over-order to provide a safety net against damage/theft
because they don’t want to pay for non productive labour waiting for Inadequate information/co-ordination
materials or to run short. The cost of delay is enormous compared to
the cost of over-ordering. Laziness

Efficient Construction Logistics 51


Inadequate information or co-ordination, or just mere laziness at the Rushed, inaccurate tenders
planning stage makes for bad specifications.
Delivery perceived to be unreliable.

Tendering is a rushed process leading to inaccurate pricing and faulty
figures which design teams rely on to their cost.

Deliveries are not sufficiently well organised or reliable.

More precision is needed in determining exact requirements of

designer and client, plus material suitability – with more
understanding of the basics of lean, together with an assessment of
re-usability of materials.

Over-ordering - logistics solution Key words and phrases:

Key messages from the responses:

More training is needed at the planning and specification stage, using Training
model-driven scheduling.
Sharing information

The earlier involvement of the client, contractor and supplier and the
sharing of more information are needed to ensure accurate
More time for trade contractors to
quantities.
estimate

Planning teams should allow more time for the sub-contractors to
have their input Call offs from consolidation centres

Call off contracts should be established through multi-project Logistics company included from
consolidation centres regionally sited and managed by logistic service tender onwards
providers.
Supply system to be more flexible.

The earlier logistics companies can be involved, the better, preferably
at tender stage.

There need to be more flexible stockholder and merchant systems

allowing smaller quantities to be provided without cost penalty.

Inappropriate or excessive packaging - root cause Key words and phrases

Key messages from the responses:

Manufacturers and suppliers are the villains here, being highly Suppliers avoiding risks
conservative. They think more packaging is better packaging and
that packs look nice with the company logo. They seek to avoid all Big business doesn’t care
risk.
No incentive to reuse packaging

Despite their crocodile tears multi-nationals don’t give a damn about
the environment.
Small contractors tend to use small

There is poor care of materials on site and poor skill levels too. But batches, more packagaing
manufacturers have no incentive to collect piles of unwanted or
reusable packing.

The practice of over batching on site (for example in bags of repair

material) often ruins the planning of materials required.

Contractors have smaller yards, rely on merchants to deliver and

their small batching generates more packaging. Health and safety
requirements to reduce manual handling also lead to smaller
packages.

Inappropriate or excessive packaging - logistics solution Key words and phrases

Key messages from the responses:

Suppliers/manufacturers need to take ownership of packaging as well Suppliers need to take ownership of
as product, building in principles or re-usability, making package part packaging; take back schemes
of purchase agreements and running better take-back schemes
Consolidation centres

Handling technology needs improvement and rationalisation – for

Efficient Construction Logistics 52

 example availability of half size pallets, having a system of rigid
cradle and returnable banding and wrapping, and paying more Pull only products needed
thought to lifting problems on site.
Taxes

Regional or central pick up points or consolidation centres could
benefit contractors and logistic teams could specify to the supply
chain the requirements for products for particular sites.

Supply chains need consolidating so products are pulled rather than

pushed to the supplier

Non reusable packing should be taxed.

Damage - root cause Key words and phrases

Key messages from the responses:

Careless handling by drivers, operatives, site management and Careless handling
untrained workers. There is a lack of ownership of materials
between delivery to site and installation resulting in poor storage, Unsuitable site arrangements
poor handling and thus more damage.
Wrong vehicles and tools

Bad site management with a lack of training and supervision, storage
being poorly thought out, and items often not dry and having to be
moved several times. Delivered too soon and then meddled
with.

Inappropriate or incorrect use of tools and equipment, for example
items are often delivered on large vehicles with appropriate lifting
equipment, but to sites which may be restricted in size, so the
equipment is useless and materials are pushed or dragged around
with what’s available.

Items are often delivered too soon and/or insecurely on transport

and people start opening packing to see what’s inside.

Poor access to the site and poor skill levels all round.

Damage - logistics solution Key words and phrases

Key messages from the responses:

Sites need to be far better planned and managed, creating defined Better site planning
areas for materials storage for each contractor, protected from
weather and with a hard surface. Logistics specialist on site

Management on site should be by a logistics company or specially JIT

designated persons.

Training in handling and value of

Increase use of JIT practices and ensure logistic teams are flexible
enough to respond. materials

More training is needed for handling and the industry needs to Incentives ton reduce damage.
develop a culture which values materials properly.

Tie payments to the reduction of damage or provide some financial

incentive to site operators.

Unsuitable or faulty materials - root cause Key words and phrases

Key messages from the responses:

In joint top placed are inadequate quality control measures in Poor specification
production and poor specifications. Materials are often not tested for
the purpose intended and there is a lack of dialogue between buyer Lack of ‘fit for purpose’
and suppliers.
Late changes

Poor communication between the varies parties.
Cost cutting

Changes in specifications or design by the client at later stages.

Whoever is procuring not procuring the right thing according to Lowest price purchasing.

Efficient Construction Logistics 53

 specifications or drawings – sometimes they may be trying to
cheapen the job or designers may be specifying the wrong thing in
the first place.

The lowest price culture of clients.

Unsuitable or faulty materials - logistics solution Key words and phrases

Key messages from the responses:

Improve quality control systems at the manufacturer stage and install Quality control at site gate
quality control checks at point of reception on site.
Specify materials fit for purpose

Ensure specifications are carried out to better standards for purpose
required with bench marks standard and inspection systems to avoid
Corrective reporting systems
materials needing to be rejected on site.

Transparency

Provide better training in design specification logistics and
procurement with corrective action reporting systems.
Automotive industry can do it!

Have better communications in the supply chain and greater
transparency of project requirements.

Learn lessons from the automotive industry.

Off cuts that cannot be used in the project - root cause Key words and phrases
Key messages from the responses:

Poor design planning and scheduling. Poor planning and design around
stock sizes

Mass production systems, though having cost benefits, mean limited
sizes and material loss or wastage. Standard lengths may be ordered Reluctance to negotiate non-standard
when non-standards would be better suited. Stock sizes will never
sizes
suit all industry requirements.

Cheaper to use new than off cuts

Poor tradesmen/operative workmanship and perception that ordering
more is cheaper.
Trades left to ‘sort it out’.

Poor design and scheduling, relying on operatives to ‘sort it out’ on
site, even though their culture is to think of ease and time rather
than waste and cost.

Designers may need to design sizes of rooms to reduce the need for
cutting and to show awareness, for example of ceramic tile size.
Present dimensions can often be arbitrary.

Off cuts that cannot be used in the project - logistics solutions Key words and phrases
Key messages from the responses:

Develop closer co-operation between contractors and sub-contractors More contractor input to design
and involve them in the design process. This would lead to greater
accuracy and understanding and, with education, to enable them to More offsite assembly
eliminate many cut-offs.
Services to exchange off cuts

Use off-site assembly as much as possible.
Dialogue between designers and

Recognise the problem and form organisations that collect unwanted
materials for free and match them to demand from other customers manufacturers
or building sites.
More recycle/take back schemes.

Train procurement staff about material sizes and link up with
designers to make them aware of the implications of waste when
standard sizes aren’t used.

Designers should talk to manufacturers to ensure new standards

meet their requirements.

Plan a cascade of recycling on site with high-value reuse systems and

Efficient Construction Logistics 54

start take-back schemes.

Efficient Construction Logistics 55

19. Are there any reasons we've missed? What are the root Key words and phrases
causes and can you suggest logistics solutions?
Key messages from the responses:
Causes Solutions
The negative culture that waste Management should be made Managers held accountable for waste
doesn’t matter, and in any case is properly accountable for waste
paid for by contingency generated. Site agents need to
be fired up and given incentives
to reduce waste. Builders could
franchise out waste control to
sub contractors running waste
depots or contractors could
employ specialised individuals
charged with helping save waste.

Buildings are fundamentally over Simplification and standardisation Standardisation

complex and materials come in
too many finishes and
specifications, added to which ,
materials in mixed packages of
wood, metal, plastic and
cardboard, require a great
amount of time and effort to
separate.

Complacency and laziness of
many operatives
Education to waste not want not Education about value of waste
approach, more sense of
ownership and awareness of
cash, then improvement of site
storage conditions to help them
adopt waste minimisation policies

Changes by client due to bad
briefing at design stage
Better communication and pre- Pre-planning and quality control
planning, ideally involving
suppliers, plus more quality
control at the pre-production
stage.

Collaboration and integration
between people and systems in
the building trade is poor with
little appreciation of each others’
roles
More understanding of each Less haste, better briefings
others roles and the constraints
worked under is needed – for
example designers need more
practical knowledge of material
use. A little less haste and better
briefing sessions are needed.

20. In the construction projects you are involved in, what Key words and phrases
schemes, tools or services are used to minimise or manage the
material waste that arises? Segregation and recycling
Key messages from the responses:

(Automated) waste segregation planning with designated skips for Training
sorting on site and subsequent recycling
SmartStart

Training to avoid waste from design through buying to construction
stage
KPIs

BRE’s SMART START waste recovery tool
‘Green team’ on site

Efficient Construction Logistics 56


Closer monitored KPIs Kanban

Environmental Planning and/or appointment of a ‘green team’ on site Accurate estimates with ICT

Kanban systems Off-site assembly

Materials accurately quantified by computer software
Sharing between sites

Off-site manufacture and/or pre-designed modular components
Consolidation centre.

Reuse and sharing of resources between sites

Pulling products to a consolidation centre.

21. Suggest at least one way that existing logistics services Key words and phrases
could be 'reversed' to remove material construction waste so
that it can be reused or recycled economically Collect and return
Key messages from the responses:

Collection/return of packaging – for example pallets and plasterboard Tax incentives
to encourage reuse
Bonuses

Centralised waste collection sites with suppliers and manufacturers
getting tax breaks to collect for recycling
Partnerships with specialists

Give bonuses for removing more waste
Training

Seek new partnerships in recycling to take logistic services away from
the market and into the hands of specialist contractors Standardisation.

Provide increased training and awareness of problems and potential

solutions

Standardise packages

Shorten product ranges so that unused products from one project are
suitable for use with the next

Use more prefabricated products

Make waste recycling containers mandatory on sites and use the law
to change what is defined as waste so that it can be more easily
reused

Remove VAT from materials made with more than 30% recycled
material

Use empty lorries more efficiently once their cargoes have been
delivered on site.

22. What do you think would be the single most effective action Key words and phrases
the construction industry could take to eliminate material waste
before it arises? Off-site assembly
Key messages from the responses:

Use more prefabricated products Publicise best practice

Disseminate good practice on waste management for small build Expose cost of waste and benefits of
projects as well as large schemes change

Get clients to understand the cost of going green so that short term
Design out waste
thinking doesn’t prevent longer term involvement & get designers
and clients to agree fully on what are the goalposts at the outset
Managers made accountable

Improve detail/precision of design so that waste is designed out and
less has to be corrected on site Taxes

Efficient Construction Logistics 57


Make top level managers more accountable by publicising those who Incentives
generate most waste
Allow time for planning

Use taxes to penalise wasteful practice and/or make waste disposal
statutory
Localised distribution facipities.

Give incentives to the work force, even have competitions to
encourage them to suggest waste avoiding methods

Ensure more time and commitment is afforded to tightening

specifications and materials far ahead of starting on site

Have localised storage sites to reduce transport costs and to allow

trading of material between companies

Have the building industry set up a waste recycling body

Make less use of buying consortia that fragment effective long term
supply chains and force them to use cheap low spec components.

23. Finally, thinking about your role that you told us in question <This chart is incorrect. AY to
1, to what extent do you think you could influence waste investigate.>
minimisation?

To what extent do you think you can influence

waste minimisation

100

80

60

40

20

0
Quite a lot A Little Not at all Not sure

Efficient Construction Logistics 58

CO2 survey

This work is summarised in Appendix 2.

Efficient Construction Logistics 59

Appendix 2: CO2 survey
The purpose of the CO2 survey was to determine the impact of moving to
alternative logistics techniques. This information is derived from separate work
that Constructing Excellence has done at the London Construction Consolidation
Centre (LCCC) at Bermondsey.

WRAP CO2 Modelling Survey

December 2006

Introduction

 Model description
 Data obtained
 Initial results for 2007
 Next steps

Efficient Construction Logistics 60

 Location of 341
suppliers

Method One Contractor goes to wholesaler

- capability
Manufacturing side Contractors side
Satellite warehousing costs
Supply production costs

Main Depot costs

Main Depot costs

Customers
Wholesalers

Demand side
Satellite Main to Main Main to Transport
Transport
to Main Inter-depot Satellite cost
cost
Transport Transport Transport Depot to
Supply to
cost cost cost Customer
Depot

Efficient Construction Logistics 61

 Method Two Contractor who gets materials
delivered to site - capability
Manufacturing side
Satellite warehousing costs Contractors side
Supply production costs

Main Depot costs

Main Depot costs

Customers
Wholesalers
Demand side
Satellite Main to Main Main to Transport
Transport
to Main Inter-depot Satellite cost
cost
Transport Transport Transport Depot to
Supply to
cost cost cost Customer
Depot

Method Three Contractor who segements

materials - capability
Manufacturing side Contractors side
Satellite warehousing costs
Supply production costs

Main Depot costs

Main Depot costs

Customers
Wholesalers

Demand side
Satellite Main to Main Main to Transport
Transport
to Main Inter-depot Satellite cost
cost
Transport Transport Transport Depot to
Supply to
cost cost cost Customer
Depot

Efficient Construction Logistics 62

 Method Four Tagging information, people
and material flow - capability
Manufacturing side
Satellite warehousing costs Contractors side

Consolidation Centre
Supply production costs

Main Depot costs

Customers
Wholesalers

Demand side
Satellite Main to Main Main to Transport
Transport
to Main Inter-depot Satellite cost
cost
Transport Transport Transport Depot to
Supply to
cost cost cost Customer
Depot

C02 Survey data

– Between November 2005 and July 2006

• Date. Supplier location, pallet equivalents, vehicle
type
• 480 suppliers delivered in to Bermondsey CCC for
Unilever, of which 341 had a recognisable address
• The 480 suppliers delivered 7673 pallets
• 341 suppliers used in model delivered 2928 pallets
• 97%delivery reliability
• 5-15% waste in centre at end of project.
• 79% reduction CO2 compared to type 2 and three

Efficient Construction Logistics 63

Method
 The C02 survey represented above seeks to look at logistics methods in the construction industry and the C02
implications for the various four types captured in our study. Based on the information gained at the LCCC the
survey looks at the standard logistics network used in construction and has modelled each method based on
loads. The results show that alternative logistics methods do not have a detrimental effect on C0s, as long as
the utilisation of the vehicle is used and time delays are minimised. Typically placing a consolidation centre 4=8
miles from site will save 79% of the C02, based on the reduction of vehicles going to site and the reduction of
Journey times.
 Method one comprises those contractors, typically jobbing or working in the RMI sectors, these contractors will
journey to the local wholesaler using light van up to pick up materials for works lifting a maximum up to
1000KG, 1-3 pallets typically much less. The journey from the business to the wholesaler and site is 10-15
miles on average.
 Method two comprises the wholesaler delivering to a site using LGV vehicles up to 26 tonnes in weight,
(average delivering in a multi drop process, this utilisation of trucks and loads is 34% better than method one.
Typically 7-9 pallets min.
 Method three as above however 60% or materials delivered to centre direct from wholesaler and 40% from
manufacturer, these vehicles travel to site and will spend approximately 1.5 hours weighting and unloading at
the site entrance, Again load is 7-9 pallets. C02 as method two.
 Method four comprises tagged information and materials flows using just in time methods, from order, to
delivery to centre and delivery to site using consolidated loads, Vehicles into to centre\(as would be delivered
to method 2 and three) is 2500 vehicles compared to 730 vehicles out consolidated load, this model saved
79% of the C02 on Final 8 miles., hence .33 factor.
 Information on Inter modal shifts for the delivery of construction materials and its impacts on C02 are
negligible and suited to major projects, where materials such as aggregated and steel are consumed at 1300
tones/ 600 tonnes respectively per week and that there is an adjacent rail head., the uses of inland waterway
could be used, the loads to be carried on narrow boat is up to 150 tonnes and 350 tonnes.

Efficient Construction Logistics 64

Appendix 3: Logistics providers
This information was derived from a list of ‘top 100’ logistics contractors supplied by the Chartered Institute of Logistics and
Transport as well as a search of other logistics contractors that work only in construction (see not ranked). Only those with a
declared interest in construction are listed.

Rank Company URL Contact Position Telephone E-mail

1 DHL Logistics www.dhl.com Mike Holley 01908 mike.holley@dhl.com

244000
2 Wincanton www.wincanton.co.uk Gareth Business Development Manager 01249 gareth.smith@wincanto
Smith 710438 n.com
3 Kuehne & www.kuehne-nagel.com Tony Byrne General Manager Business 07798 tony.byrne@kuehne-
Nagel Development 792406 nagel.com
5 TNT Logistics http://www.cevalogistics.com/ Richard National Facility Manager 07796 richard.milne@tntlogisti
UK Milne 998131 cs.co.uk
6 Gist www.gistworld.com Bryan Commercial Director 01256 bryan.jones@gistworld.
Jones 891111 com
9 NYK Logistics http://www.ne.nyklogistics.com/ Brian Business Development Manager 01525 brian.davies@uk.nyklo
(UK) Davies 287300 gistics.com
18 Eddie Stobart http://www.eddiestobart.co.uk/ Daphne Business Development and 01228 822 tweddled@eddiestobart
Tweddle marketing director 500 .co.uk
20 WH Malcolm http://www.malcolmgroup.co.uk/ Jim Clarke Business Development Manager 01505 324
321
21 ANC Group http://www.anc.co.uk/index1.asp Mark Business Development Director 0800 mitchellm@anc.co.uk
Mitchelle 262123
24 Innovate http://www.innovatelogistics.com/ Tim Bolan Business Development Director 01623 727 tim.bolan@inovatelogis
Logistics 250 tics.com
37 Lloyd Fraser http://www.lloydfraser.com/ Mike Business Development Director 07980 mike.dennis@lloydfrase
Logistics Dennis 940803 r.com
38 Stiller Group www.stiller.co.uk Larry Business Development Director 01642 larry.boulton@stiller.co
Boulton 607777 .uk
39 Canute http://www.canutegroup.com/ Warren Business Development Director 01708 warren.marks@canute
Haulage Group Mark 867001 group.com
43 Hanbury http://www.hanburydavies.co.uk/ Kevin Business Development Director 01394 kevin.smith@hanburyd
Davies Smith 675356 avies.co.uk

Efficient Construction Logistics 65

49 Currie http://www.currie- David Ross Group Commercial Director 01387 267 david.ross@curry-
European european.com/currie_european_transport_ltd/in 333 european.com
Transport dex.htm
54 Sutton & Son http://www.fsuttonandson.co.uk/ Marcus Manager 07785 257 marcis@fsuttonandson.
Sutton 866 co.uk
61 CM Downton http://www.downton.co.uk/ Andrew Managing Director 01452
Downton 720242
63 TM Logistics http://www.tmlogistics.com/ David Business Development Director 01886
Bratton 888241
64 Rhys Davies http://www.rhysdavies.co.uk/ Mark Director 029 mark.hegarty@rhysdav
Heggarty 20810587 ies.co.uk
76 Seafield http://www.seafield.co.uk/ Mike Hyde Business Development Manager 01909 mike.hyde@seafield.co.
Logistics 475561 uk
79 Maxi Haulage http://www.maxihaulage.co.uk/ Richard Business Development Manager 01294 richardatkinson@maxih
Atkinson 272531 aulage.co.uk
84 Aspray http://www.aspraytransport.co.uk/ David Sales Director 01902 sales@aspraytransport.
Transport Turpin 638213 co.uk
98 Erith Haulage http://www.erith-group.co.uk/ Mike Lynch Business Development Manager 0870-950 mike.lynch@erith.net
Co 8800
Not ranked in top 100:
CSB Logistics www.csblogistics.co.uk Matt Director 07733 matt.barker@csblogisti
Barker 103232 cs.co.uk
Christian www.salvesen.co.uk Stephen Managing Director 01604 stephen.hayward@salv
Salvesen Hayward 737402 esen.com
CAT Logistics www.cat.com Andrew Business Development Manager 01455 radley_andrew@cat.co
Radley 825800 m
Wilson James www.wilsonjames.co.uk Gary Managing Director Construction 01702 gary.sullivan@wilsonja
Sullivan and Aviation Services 346222 mes.co.uk
Clipfine www.clipfine.com Chris Business Development Director 08456 chrismassie@clipfine.co
Massie 128811 m
Elliot Thomas www.elliot-thomas.co.uk John Self Managing Director 0870 6000 john.self@elliott-
026 thomas.co.uk
Wyse Logistics Neill Regional Director 020 8861 NeillJackson@laboursit
Jackson 9312 e.com
ASITE www.asite.com Huw 020 7749 huw.davies@asite.com
Davies 7880
BIW www.biwtech.com Steve Sales Director 01483 steve.cooper@biwtech.
Cooper 712620 com

Efficient Construction Logistics 66

Written by: Adrian Blumenthal and Adrian Young

Published by
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