Research On Collective Decision Making Model Of Material Procurement Under EPC Construction Supply Chain

The management of construction industry in China is not satisfying.Many construction projects can't be completed within the original effort,cost,and duration.With the increasing demanding of the construction efficiency,it is a necessary and urgent option for the construction industry to conduct revolution in both management and technology,especially in the management of procurement for its high cost.The successful application of procurement under the perspective of supply chain management in manufacture industry provides a good demonstration for construction management.However,since there are more companies in the construction projects,the construction supply chain(CSC)is more complex and exhibits complex network feature.Also,the node companies in CSC have conflicting goals and benefits,which together make the construction supply chain management(CSCM)a tough issue.How to decrease the total cost of the CSC and individual cost of the node companies,and also to achieve high quality and timely response to the change the construction site through collective decision making in procurement is the main focus of this paper.This paper first demonstrates the feasibility of the CSCM,and further analyzed the network feature of the CSC under EPC construction mode.The collective decision making theory is also introduced to CSCM procurement management in order to decrease the transactional cost.The foundation of collective decision making in procurement management needs the support of the relevant mechanism,including cooperative partner selection,information sharing,and benefits distribution.Based on that,the collective decision making mechanism is built in this paper.In this mechanism,the central company has the final decision right,and the material suppliers also have a certain degree of freedom in the decision making to maximize their own benefits.Using the example of three-level CSC which is made of the main constructor,subconstructors,and material suppliers,this paper builds a double layer decision making model for the procurement activity.The upper layer function(P1)aims reduce the total cost across the whole supply chain,and the under layer function(P2)aims at decreasing the cost for each company.The method to solve this function is given in this paper and also a construction case is studied to illustrate the usefulness of this model.