The Struggle of Multiple Supply Chain Structures: Theoretical Overview

Supplier firms are integrating downstream closer to the construction client. Sawmills have tried for decades to start producing timber buildings in order to capitalise on their core product; sawn timber. Their efforts have often failed, which is attributed to the different business logics between sawing timber and constructing buildings. This research identifies the supply chain structure as an important classification of production and business logic. Many firms operate make-to-stock, make-to-order and even engineer-to-order within the same firm, thus utilising the same or overlapping resources. From a theoretical viewpoint, this paper explores the problem of multiplicity in supply chains within construction and construction supplier firms. Literature on operations strategies, operations management, and supply chain structures is covered and put into perspective. It is an important capability to handle diversity in supply chain structures, not only when expanding business, but also in balancing different product categories internally e.g. to handle variations in market demand. The effect on internal resource utilisation can be vast. Operations management must take the differences in supply chain structures into account when developing key performance indicators and operations management strategies.