A systems dynamics approach to the management of material procurement for Engineering, Procurement and Construction industry

The importance of managing material procurement and logistics towards the success of construction projects cannot be overemphasized. This is especially true to the Engineering, Procurement and Construction (EPC) industry. Project management in EPC often encounters the problems such as cost overrun, schedule overrun, delay in material supply, and loss of productivity. To overcome these problems for achieving a sustainable EPC system, it is necessary to explore the underlying causes of these problems and study policies to tackle them. In this connection, this paper presents a systems dynamic model of the construction material supply chain (CMSC) in EPC, capturing the attributes relevant to the foregoing problems and the policies that are expected to overcome these problems. The model was validated with several standard tests assisted by the industrial manager of the CMSC in EPC. After that, a simulation study based on the model was conducted, which shows that the model can be a useful tool for decision makers for the CMSC in EPC to streamline their policies in managing a particular CMSC to overcome the foregoing problems. The main contribution of this paper is the provision of a comprehensive tool for quantitatively assisting in the management of the CMSC in EPC. A secondary contribution is that some specific knowledge is obtained to overcome the foregoing problems from the simulation study.