Modeling supply chain resilience in industrialized construction in Hong Kong

Abstract

A highly volatile and interconnected global market, the ever-changing demands of clients and fierce competition amongst major suppliers necessitate a strategic shift towards a modern supply chain management strategy that prioritizes Supply Chain Resilience (SCR). This is because organizational supply chains are increasingly fragile; hence, more susceptible to unforeseen crises, as vividly demonstrated by catastrophic disruptions to global supply chains by COVID-19 as this thesis is being compiled. Organizations face disruptions even under normal conditions. All these disruptions endanger an organization's ability to perform effectively. Moreover, the growing complexity of the global supply chains and their increased vulnerability to disruptions have threatened the long-term success and survival of organizations and sometimes their parent industries too. In response, SCR enables organizations to respond effectively during disruptions with the swift and stable restoration of supply chains following disruptions. Besides, resilient supply chains are less vulnerable to disruptions and are also more capable of handling any vulnerabilities that do trigger problems. Focusing on the construction industry in Hong Kong, construction supply chains have weathered various disruptions over the years. Further, the construction industry is unique, and the supply chain configurations of most construction projects are distinctive. Although Industrialized Construction (IC) practices in Hong Kong have introduced innovations through safe, clean and efficient construction methods for the construction industry, IC supply chains are still drastically affected by the inherent supply chain disruptions. Since IC is developed by incorporating advances in offsite manufacturing practices, IC supply chains are more complicated than in traditional construction and IC straddles the supply chain phases of manufacturing-factory, logistics and onsite assembly. Especially in Hong Kong, all the prefabricated units are transported from Mainland China. Hence, the supply chains are widely affected by transportation and cross border logistics-related vulnerabilities compared to the other countries. In this regard, SCR prioritization can be introduced as a game-changing supply chain management strategy, which by directing addressing specific resilience issues, should surpass or out-perform traditional risk management practices by opening up robust pathways to withstanding important Supply Chain Vulnerabilities (SCV) of IC in Hong Kong. Further, it is crucial for IC organizations to build more resilient supply chains through enhanced Supply Chain Capabilities (SCC) to effectively respond to escalating threats since the construction industry is a key economic driver. Moreover, supply chain networks vary according to their geographical context in different ways that can shape their types and levels of vulnerability. Recent Government initiatives for increasing IC in Hong Kong accentuated the need for a focused study to investigate: (a) IC supply chain behavior, strengths and weaknesses in Hong Kong and (b) how to enhance the resilience capabilities of IC supply chains to address the current performance conundrum faced by the Hong Kong industry. These foregoing needs, taken together, establish the imperative for enhancing SCR practice in IC in Hong Kong, although not yet even explored in the international IC literature to which these research outcomes would also, therefore, contribute. Given this background and rapidly changing conditions, this study aimed to develop and propose strategies to enhance supply chain resilience in IC through developing a dynamic model to assess SCR in IC in Hong Kong. Further, four research objectives were established to achieve the research aim as (i) to identify supply chain vulnerabilities and capabilities as critical measures of supply chain resilience in industrialized construction, (ii) to develop mathematical models to assess supply chain vulnerabilities, supply chain capabilities and their correlational impacts, (iii) to develop a dynamic SCR evaluation model for IC in Hong Kong via probing and assessing relevant supply chain vulnerabilities and capabilities, and (iv) to propose strategies to enhance supply chain resilience in IC in Hong Kong. To achieve research Objective 1, this study first conducted two comprehensive and systematic literature reviews on SCC and SCV targeting SCR in IC. These reviews enabled the identification of 37 vulnerabilities and 58 capability measurement items in the IC context. A questionnaire was developed to further probe these identified SCV and SCC, and thereby, to achieve Objective 2. In addition, semi-structured interviews, frequent site visits to the construction sites and document reviews were conducted to gather additional related data. Subsequent factor analysis facilitated the grouping of the identified SCV under five underlying categories and SCC measurement items under nine capability components. Twenty-four SCV and forty-one supply chain capability measurement items that remained after the factor analysis were regarded as critical measures in realizing SCR in IC in Hong Kong. This study next proceeded with developing mathematical models to assess SCV and SCC separately as specific to the IC in Hong Kong using fuzzy synthetic evaluation. Besides, the correlational impacts of SCV and SCC were modeled using the partial least squares structural equation modeling to explore their interactions under the phenomena of SCR. These models are the first known mathematical evaluation models developed for assessing SCR in the construction industry. Following these foregoing outcomes, a dynamic model to assess SCR in IC in Hong Kong was developed with the use of the system dynamics modeling technique. It is the first known system dynamics model in the relevant literature on this topic. Having thereby realized study Objective 3, the vulnerability levels of each supply chain phase were modeled and evaluated by applying social network analysis technique. This is the first known initiative to apply this social network analysis technique to assess the dynamics of IC supply chains in the pursuit of resilience. The developed system dynamics model for achieving SCR in IC was further verified and analyzed using two-comparative case studies, after which useful strategies to boost SCR in IC in Hong Kong were proposed as the key research outcomes of this significant study, thereby achieving research Objective 4 and fulfilling the overall research aim. Moreover, this study contributed to improving IC practices not only by initiating SCR assessment models but also by proposing useful strategies for the effective uptake of SCR practices in Hong Kong. In addition to this contribution to practice, supply chain management and related theories were enriched by unveiling how the several research methods deployed in this study, such as fuzzy synthetic evaluation, partial least squares-structural equation modeling, system dynamics modeling, and the social network analysis, could be effectively applied to analyze SCR imperatives in the construction research domain. These key research contributions would inform both industry practitioners and researchers on how to deploy and improve SCR in IC practices in Hong Kong, thereby also helping to address the acute disruptions as well as the general performance conundrums debilitating the industry. Finally, these synergistic theory-practice thrusts could help develop resilient and sustainable construction supply chains in IC processes, which could, in turn, drive value-enhanced performance in IC in Hong Kong.