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Applying Theory of Constraint on Logistic Management in Large Scale Construction Sites – A Case Study of Steel Bar in TFT‐LCD Factory Build‐Up

Chih‐Yao Huang (Department of Industrial Engineering and Management, National Chiao‐Tung University, Hsinchu, Taiwan, ROC)
Ching‐Piao Chen (Department of Industrial Engineering and Management, Ta‐Hwa Institute of Technology, 1 Ta‐Hwa Road, Chung‐Lin, Hsin‐Chu, Taiwan, ROC)
Rong‐Kwei Li (Department of Industrial Engineering and Management, National Chiao‐Tung University, Hsinchu, Taiwan, ROC)
Chih‐Hung Tsai (Department of Industrial Engineering and Management, Ta‐Hwa Institute of Technology, 1 Ta‐Hwa Road, Chung‐Lin, Hsin‐Chu, Taiwan, ROC)

Asian Journal on Quality

ISSN: 1598-2688

Article publication date: 17 April 2008

Abstract

The steel bars account for a high percentage of material costs for the current construction projects. At the present time, most of the construction projects for the factories of thin‐film transistor liquid crystal display (TFT‐LCD) complete the transactions of steel bars when the suppliers ship the steel bars to the temporary storage/processing sites. This paper applies the buy‐in concept in the Theory of Constraint (TOC) on the supply chain of steel bars. In this study, suppliers are required to establish warehouses at the construction sites and complete the transactions when the formed and processed steel bars are shipped into the factory sites. The aim is to find a win‐win solution to meet with the expectations from constructors as they hope that there is no need to build up inventories but supply is ready at any time. Also, this paper compares and analyzes the traditional supply/inventory model of steel bars and the Demand‐Pull (D‐P) model under the TOC framework. It is proved that Vendor Management Inventory (VMI) in the D‐P model is able to more effectively manage steel bars as a material.

Keywords

Citation

Huang, C., Chen, C., Li, R. and Tsai, C. (2008), "Applying Theory of Constraint on Logistic Management in Large Scale Construction Sites – A Case Study of Steel Bar in TFT‐LCD Factory Build‐Up", Asian Journal on Quality, Vol. 9 No. 1, pp. 68-93. https://doi.org/10.1108/15982688200800005

Publisher

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Emerald Group Publishing Limited

Copyright © 2008, Emerald Group Publishing Limited