Max Profit Construction Case Study

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2.Organization Background. Operation

Max Profit Constructions having branches at Melbourne, Sydney and Brisbane have been dominating the commercial and Residential fields in Australia. The Company follows traditional methods at all stages of work from procurement to on site Construction. Sub contractors and Suppliers are changing from one project to another and would also be hired from different cities. Many a times, due to Substandard workmanship the project has to be re-worked

2.1 Current/Existing Supply Chain

3.0 Assess Company Operations

3.1 Traditional Procurement Method

MP Construction follows a traditional procurement method in which the client initiates a residential or commercial project by hiring an architect to design
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This provides the advantage of flexibility in construction, but also poses various problems causing non-value adding activities and results in project inefficiency.
Over ordering of material and inventory causes wastage and under ordering might lead to delay in schedule. Once the material is delivered, it takes up a lot of storage space, causing stock piling on the site and also needs to be protected from the weather. A notable amount of work force needs to be employed by MP Constructions to transport the inventory to and from the storage area, generating non-value adding activities. Any small mistake or defect in construction could lead to rework and rectification, thus increasing the project cost.
This type of construction involves a lot of wastage in terms of solid waste as well as labor force, which MP Constructions should be concerned about. Also, it is labor intensive and also entertains the risk of schedule delay due to unpredictable weather conditions. (The Self Build Guide, 2016)

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This is caused due to adversarial relationship between the company and its subcontractors and suppliers, as discussed in earlier sections, and due to lack of proper communication system along the supply chain. This might cause transfer of wrong information or complete absence of important information causing defects and in turn reworks. Supply of wrong drawings or older revisions of drawings to the site leads to wrong construction, and sometimes, subcontracted work might not match the main design. This causes reworks, rectifications and schedule delays. Miscommunication to the suppliers leads to wrongly delivered materials and misfitting components. In such case, particular activities might be put on hold for the wrong stock to go back and the right stock to be delivered. (Cutting-Decelle A-F, 2007) Hence, MP Constructions must pay attention to the information flow along the supply chain to avoid increase in project cost, schedule delays and in turn customer dissatisfaction.

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