Measuring performance within the supply chain of a large scale project

Abstract

Purpose

The purpose of this paper is to explore the performance measurement methodology used by a real case company, namely Vanderlande Industries Ltd, for cost and progress capture for in‐house production, resale material and third party supplied material, in an effort to measure performance of the supply chain of a large scale project – the €6bn London Heathrow Airport Terminal 5 construction project.

Design/methodology/approach

The case study approach was adopted, which includes ethnography. This research is not about testing a theory; it is about gaining insight to the actual functioning and supply chain performance measuring of a large‐scale project. In that sense, the experiences reported could be shared with those dealing with performance measurement of large‐scale projects.

Findings

Eight key areas of concerns are found relating to supply chain performance measurement of a large‐scale project: performance measurement requirements, with forecasting and progress reporting not owned by suppliers; lack of detailed planning causing regular changes to baseline; detailed work breakdown structure causing unnecessary complications to performance analysis; organisational structure; performance measurement tool; data capture; timing of progress and cost capture affecting the analysing process; and scope change and traceability.

Originality/value

The paper is targeted at senior and middle managers involved in large cost reimbursable projects. Managers should manage more carefully the eight key areas of concerns identified. Recommended solutions targeting each area of concerns from the lessons learnt in the €6bn London Heathrow Airport Terminal 5 construction project give a basis for improved project management and supply chain performance measurement for large‐scale projects.

Citation

Diran Wickramatillake, C., Lenny Koh, S.C., Gunasekaran, A. and Arunachalam, S. (2007), "Measuring performance within the supply chain of a large scale project", Supply Chain Management, Vol. 12 No. 1, pp. 52-59. https://doi.org/10.1108/13598540710724338