A Conceptual Model for Value Chain Management in Construction Contractor Organisations

Abstract

Lean techniques focus on value maximisation while minimising waste. Waste is commonly interpreted as waste of material even though, waste in construction industry also relates to activities such as defects, movement, waiting time and processing. Such waste can be minimised through an in-depth understanding of the organisation. Herein, Value Chain Management (VCM) can be used to facilitate organisations to categorise the activities in terms of their value addition. The generic value chain model developed by Porter in 1985 focuses on the manufacturing industry thus, a framework is required for contractor organisations based on which Value Adding Activities (VAAs) and non-VAAs can be identified. This paper is aimed at proposing a conceptual model for VCM in contractor organisations. Three case studies were conducted in selected contractor organisations and data was collected through fifteen semi-structured interviews. Collected data was analysed using content analysis. Altogether, 46 VAAs were identified classified under four primary functions and six secondary functions. The findings were used to develop a VC model applicable to contractor organisations based on Porter’s generic VC model. This in turn could be used by contractors to adopt strategies to enhance Value Adding Activities (VAAs) and to minimise non-VAAs.