Value chain management in Sri Lankan construction industry: contractor’s perspective

Abstract

Poor levels of efficiency are a prevalent concern for construction industries worldwide. Herein, Value Chain Management (VCM) is a concept that can help minimise organisational inefficiencies through in-depth insights into a firm’s operations. Aim of this study was to investigate the potential for construction contractor organisations to enhance the value addition to the client while improving efficiency through VCM principles. Mixed research approach was used. Data was collected using a questionnaire survey and expert interviews. Altogether, 50 (Value-adding activities) VAAs relevant for Sri Lankan construction organisations were identified, which were categorised under four groups of primary VAAs and six groups of secondary VAAs. The VAAs were further mapped into Importance Performance Analysis (IPA) Matrix based on their cost and the value addition resulting in 12 VAAs in quadrant I (concentrate here), 18 VAAs in quadrant II (keep up the good work) 12 VAAs in quadrant III (low priority), and 8 VAAs in quadrant IV (possible overkill). Reasons for lack of VC Analysis (VCA) were also identified and suggestions for improvement proposed. This research makes a significant contribution to enhancing the construction industry efficiency by providing guidance for decision-makers on the areas to concentrate on when it comes to implementing improvements.

Keywords:

• Construction industry
• contractor organisations
• value chain management (VCM)
• value chain (VC)
• value chain analysis (VCA)
• value-adding activity (VAA)

Disclosure statement

No potential conflict of interest was reported by the authors.