Problems and Challenges Facing the Construction Industry

Modified: 18th Jul 2018
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There are numerous important challenges facing today’s construction industry that are motivating the adoption of new technologies such as RFID and sensors technology. Some are new to the industry, and some are centuries old. Many of these challenges are a direct result of construction operations, while others a result of indirect, peripheral activities. Some of the construction issues include workforce considerations, safety, time constraints, and the changing nature of the work. Non-construction challenges that construction industry faces that are part of the business landscape include legal issues, government regulations, environmental concerns, and socio-political pressures. Also in addition to these challenges, the construction industry is highly competitive, and firms must continually improve their productivity to remain competitive. At present, a chronic problem in the construction industry that requires urgent attention is construction supply chain. The construction supply chain network can be classified as a big and complex organisation that is difficult to manage. This is because the operations or activities involved in the construction network consist of multidiscipline groups and tasks. The concept of supply chain management is about managing information and material flows, plant operations, and logistics through a common set of principles, strategies, policies and performance metrics throughout its developmental life cycle. As part of the back bone for the supply chain processes, the logistics play a critical role in optimizing the flow of materials, equipment and people. The construction logistics is one of the significant management factors in order to precede construction project. If materials which are needed in construction project do not supply in right place on time, it can make problems such as delaying schedule, increasing the cost of construction and reducing productivity. The identification of material, identifying materials moving flow in logistics and tracking materials location are needed for successful project management in construction.

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A report ‘Improving Construction Logistics’ published by the Strategic Forum for Construction in August 2005 revealed that quite a considerable amount of waste produced in the construction is caused by poor management of materials delivery services (e.g. from supply logistics to site logistics), inventory, communications and human resources. The consequences of poor construction-logistics are the following setback; about 30% of losses in overall construction cost, contributing to the bad image of the industry, poor quality of product, increased project duration and added risks to workers’ health and safety. The use of Information Technology (IT) and learning from other industries were part of the recommendation and action plans suggested by the Strategic Forum committee for better logistics processes. Jang et al (2003) and Rebolj et al (2008) also suggested that a great deal of improving the construction-logistics must be focused on the materials and information delivery in order to achieve better productivity, avoiding delays and reducing waste. In contrast to manufacturing industries, which profit from long-lasting partnership with suppliers and customers, construction-logistics supply chains are considerably more difficult to manage and optimize due to various factors such as diversification of projects (i.e. various materials, methods, project location) and technical complexity of a project.


Ahuja V. and Yang J. (2005): Towards ‘IT’ Enabled Supply Chain Communications in Construction Project Management, International Conference on Information and Knowledge Management in a Global Economy, May 2005, pp. 289-302

Ribeiro F. L. And Lopes J. (2001): Construction Supply Chain Integration over the Internet and Web

Technology, 17th ARCOM Annual Conference, Association of Researchers in Construction Management, Salford, Reading, Vol.1, pp. 241-252, September 2001.

Jang H., Russell J.S. and Yi J. S. (2003): A Project Manager’s Level of Satisfaction in Construction Logistics, Can. J. Civ. Eng. 30, pp. 1133-1142 (2003)

Rebolj D., Babic N. C., Magdic A. Podbreznik P. and Psunder M. (2008): Automated Construction Activity Monitoring System, Advanced Engineering Informatics.

Balqis Omar, Tabarak Ballal, INTELLIGENT WIRELESS WEB SERVICES: CONTEXT-AWARE COMPUTING IN CONSTRUCTION-LOGISTICS SUPPLY CHAIN. Journal of Information Technology in Construction, ITcon Vol. 14 (2009), pg. 289-pg. 308


Fast development in information and communication technology (ICT) has emerged as a key driver and thus provided the opportunity for construction companies to be more sensitive towards their business strategy and productivity (Ahuja and Yang, 2005, Ribeiro and Lopes, 2001). The amount of project data and information generated during construction periods are enormous and uncontrolled due to the nature of fragility in the construction processes. The traditional paper-intensive method of processing and transferring data and information is still being practised due to high investment capital cost on ICT facilities, lack of supporting interoperability between hardware-software within organisations and culture of most construction organisations.

Communication technology, materials handling, transportation and warehousing are known as the critical services that serve the logistics operation processes. These include services in facilitating Just-In- Time (JIT) operation, optimising the movement of raw materials, work in-process and finished goods, optimising the transportation mode and locating and designing facilities to meet customer service levels respectively.


One of the recent paramount issues that have been a growing concern in the construction industry is the role of logistics in managing the supply chain (ERABUILD, 2006). Logistics, appropriate or inappropriate, to a great extent influences the efficiency of construction activities with materials and equipment being essential building blocks of construction projects. Among the elements that comprise the construction process, construction materials may account for 50-60 per cent of the total cost of a project and most directly represent project progress (Song 2005, Song et al. 2006). Successful delivery and subsequent distribution of these materials to various interconnected points where they are required is an important aspect of the overall project duration.

Intensecomp (2005) reported that a wrong delivery arrangement of materials causes general disorder on construction sites. This disorder is often accompanied by a need for unplanned facilities and/or activities such as additional site storage, work interruption, extra handling, breakage, and loss. Similar challenges were also reported by the Strategic Forum for Construction in 2005. The report suggests that 50% of skilled craftsmen time is spent on unskilled tasks, time that they could have otherwise devoted to supervising workers. A research by BSRIA noted in this report shows that 10% of working hours on site is wasted due to inefficient logistics management. The effects of the logistic related waste thus result in 30% of extra construction cost and exceeded project duration.

Other industries depend on and are progressively improving efficiency in logistics to achieve smooth processes, programme certainty and cost predictability. Honda-UK Manufacturing Ltd (HUM) for instance has initiated what could be one of the largest Ultra-High-Frequency (UHF) Radio Frequency Identification (RFID) installations in the automotive industry (Bacheldor 2006). The company used the technology to track components as they traverse HUM’s supply chain, moving from suppliers through out Europe to HUM’s manufacturing plant in England. In the similar way an RFID smart box developed by DHL in conjunction with the Fraunhofer Institute for Factory Operation and Automation can tell users what it contents are, and – with Global Positioning System (GPS) and later, Galileo – where it is located. The system can identify the box’s cargo and location, as well as internal environmental conditions (Wessel 2007).


Song, J. (2005). Tracking the Location of Materials on Construction Projects, Ph.D. Diss., Graduate School, the University of Texas at Austin.

Intensecomp Pte Ltd. (2004). Construction Material Tracking System: Bringing Complex Tasks to Simple Routine, 5pp.

Smith, H. and Konsynsky, B. (2003). “Developments in Practice X: Radio Frequency Identification (RFID)-An Internet for Physical Objects.” Communication Association for Information System, 12, 301-311.

Wessel, R. (2007). “DHL to Market RFID Enabling Smart Box.” RFID Journal (available at: htt://www.rfidjournal/article/articlereview/2945/)

Bacheldor, B. (2006). “Honda UK To Track Component Through The Supply Chain.” RFID Journal (available at: htt://www.rfidjournal/article/articlereview/2703/.



Information technology (IT) is important in successfully controlling and managing construction projects, particularly in enhancing communication and coordination among participants. Communication and coordination must be maintained to support resource and competency sharing within the network of a construction chain or the construction chain network. Furthermore, integrating promising information technologies such as personal digital assistants (PDA), radio frequency identification (RFID) scanning and data entry mechanisms can help improve the effectiveness and convenience of information flow in construction supply chain systems.

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Problem statements

Project management and control performance can be enhanced by enabling participants to share information with each other. However, two major key aspects of information sharing are information acquisition and information communication. Information acquisition problems in a construction project follow from most of the data and information being gathered from the construction site, which is an extension of the construction chain. The effectiveness of information and data acquisition influences the information flow between the office and the construction site. However, on-site engineers generally use written documents, drawings, contracts, specifications and shop drawings for job sites. Consequently, a time and space gap between the job site and the office causes duplication of data and information, lack of data and information, and associated confusion. Restated, existing means of processing information and accumulating data are not only time-consuming and expensive, but also compromise project management performance in information acquisition.

Furthermore, construction contractors normally depend on interactions via telephone or fax to communicate with suppliers, subcontractors and designers. Consequently, transactions are frequently lost or misunderstood. Such means of communicating information between sites and offices, and among all participants, are ineffective and inconvenient.

System implementation

This section illustrates the implementation and module of the RFID-enabled PDAs system.

  • Inventory management module

The Inventory management module is an easy-access and portable environment in which on-site engineers can trace and record all information on the status of materials in the warehouse or on the scheduled delivery list. This module enables on-site engineers to improve inventory management on construction sites.

  • Quality and inspection module

On-site engineers can download the most up-to-date quality tests from the Internet, and can enter test results directly via PDA. Additionally, PDAs display the code and/or checklist for each important component and work. On-site engineers also can plot unacceptable positions on a drawing and choose relevant items from the lists in the PDA. The module has the advantage that on-site engineers can enter/edit quality and inspection test result on the construction site and all test records can be communicated between the PDA and the portal via real-time synchronization, eliminating the need to repeatedly enter the same data.

  • Progress monitor module

This module is designed to help managers and on-site engineers monitor the progress of the key components. Furthermore, managers, on-site engineers and project related participants can share the current progress or delivery condition of these critical works and components. The schedule management module provides an easy-access and portable environment in which on-site engineers can trace and record all information on the status of components delivered to the warehouse or on scheduled for delivery.


Lung-Chuang Wang a, Yu-Cheng Lin a,*, Pao H. Lin

Dynamic mobile RFID-based supply chain control and management system in construction.

Advanced Engineering Informatics 21 (2007) 377-390


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