Improving supplier relationship management within the AEC sector

Due to changes in many facets of projects and organisations, relationships between firms in the delivery of construction projects have consequently become more critical for the success of the project. Whether it is a transactional exchange or series of transactions spread over a period of time, relationships need to be managed. However, the concept of managing supply chains and relationships between firms has been relatively new to construction industry. Early pioneers of the concept, primarily automotive, aerospace and manufacturing industries, have greatly benefitted from non-adversarial, long-term and collaborative relationships. Although contextual factors within those industries largely shape each industry’s approach to SCM (Supply Chain Management), it is application within the AEC industry is slowly beginning to appear in a distinct shape and form. Through a comprehensive review of literature on construction-specific SCM (cSCM), the study has identified that partnering, collaboration and trust are the three most prominent variables within the cSCM literature. Partnering and collaboration are considered to be relationship management tools, whereas trust is identified as the most significant relationship facilitator. In spite of its significance on relationship development, there is very limited research carried out on the trust aspect of relationships. By understanding how trust is built and maintained, and what the conditions that result in mistrust are, firms can better manage their supply chains and their relationships with firms in the supply chains, manage factors that result in mistrust and mitigate potential conflicts arising from mistrust. Consequently this will facilitate better collaboration, result in high-level of commitment, improve project teambuilding, and avoid conflict and adversarial relationships. Drawing on organisational relationship management literature, we argue that trust must be approached from five dimensions; economic, social, psychological, inter-personal and organisational. These dimensions are unidirectional and they must be accounted conjointly as they are interrelated and interdependent.