The cost benefits of alternative logistical solutions in a construction process

Abstract

Over the past years, construction activities in the Netherlands shifted from spacious greenfield developments to dense inner-city redevelopment projects. Approximately 50 per cent of the total turnover in construction is generated within the country’s large cities. It’s expected that this percentage will grow to 80 per cent in the near future(De Bes et al., 2018). Inner-city construction activities and the large logistical supply stream connected to it has a large impact on the liveability of the city. Almost 30 per cent of al business traffic is related to construction logistics (Vrijhoef, 2018). Consequences of these activities are a nuisance for neighbours due to noise, congestion, poor air quality due to the emission of greenhouse gasses and particulate matter, and a negative impact on road.

The development of Construction Consolidation Centres is an innovation in the logistical process that helps with lowering the impact construction has on the cities. The benefits for society and involved companies would suggest that the CCCs are a great success and are widely used in practice, the reality is different. Researchers debate the ability of CCCs to be financially self-sufficient (Browne et al., 2007) or state that the implementation of CCCs in the construction process is expected to increase when the financial benefits are transparent. De Bes et al. (2018) stress the need for the development of financial models that enable supply chain partners to consciously decide for the implementation of Construction Consolidation Centres based on predicted financial benefits. An important step in the development of these new logistics solutions is proving their value by measuring the impact on efficiency and costs (De Bes et al., 2018).
The implementation of Construction Consolidation Centres in the Dutch construction sector is limited due to a lack of tools to prove the financial benefits. A calculation model that predicts the impact of the logistical costs on the construction costs in the preparation stage of the project to prove the financial benefits of the Construction Consolidation Centres has not been developed yet.

The aim of this research is to develop an alternative model for cost accounting in the construction industry. This model includes the activities of the construction logistics process impacted by the implementation of a Construction Consolidation Centre. The developed model needs to enable the prediction of the impact of the implementation of a CCC on the costs of a construction project in the preparation stage of the process.