Impact Assessment of Construction Supply Chain Risk Changes on Project Time and Cost
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Date
2017-09-11
Authors
Ahmed, Hani
Journal Title
Journal ISSN
Volume Title
Publisher
University of Waterloo
Abstract
The supply chain plays a key role in the construction industry. The importance of the Construction
Supply Chain (CSC) is not less than that of the onsite construction phases. There are many risk
factors that influence the progress of a supply chain, and it is problematic when the probabilities
and impacts of these risk factors are not well defined. While many approaches have been tried in
studying SCs in construction, including risk effects, no study has addressed the dynamic updating
of the probability of risk events throughout the construction life cycle to effectively study the
impact on project time and cost. In order to reduce the impact of unseen risk factors that may
affect the progress of any construction project, it is important to have tools to predict the influence
of major risk factors in advance. However, risk factors keep changing in their probabilities and
impacts along a project’s duration, and these changes will be more severe and have more influence
if recognized later rather than earlier, and will be harder and more costly to manage. This research
is aimed at helping to recognize the occurrence probabilities of risk factors during the early stages
of a project and during the project execution. It aims to build a simulation model that can
automatically detect risk factors in construction supply chain, track their changes, quantify their
impact on project time and cost. The study starts by identifying typical risk issues related to a CSC
that will influence its state. Then, a model for quantifying the amount of risk by defining the
probabilities and impacts for each supply chain life cycle is proposed. The main focus of this
research is to build models that automatically detect and adjust changes in probabilities for the
most severe risk factors associated with CSCs and then estimate their impact on cost and schedule.
Four major steps will be completed in the proposed research. First, a real-world industrial
construction project is identified. Second, a detailed study on the risk factors associated with the
supply chain of the given project is performed. Then, these risk factors are quantified according to the automated detection models for probability change and for studying the impact of each change.
Finally, using a Monte Carlo Simulation tool (@Risk), the study will examine the impact of these
risk factors on an industrial project to offer a methodology for generating automated reports for
project managers to supply them with information on the impacts on the costs and schedules for
their projects. The model offer stakeholders involved in a project with a better understanding of
the changes in the risk so that throughout the project execution phase, they can take corrective
actions and tap off the negative impact of risk on project time and cost. This system can be used
for supply chain planning and operation. The power of the system is its ability to respond to various
what-if scenarios. The newly introduced model is validated using a real-world industrial project
and the details of the project are documented.
Description
Keywords
Supply Chain Management, Risk Quantification, Automatic Detection Model, Economic Risk Impact, Environmental Risk Impact, Supply Chain Visibility, Industrial Projects, Dynamic Schedulling