DEVELOPMENT OF A WEB-BASED SYSTEM FOR MANAGING SUPPLIERS‟ PERFORMANCE IN CONSTRUCTION PROJECTS

Suppliers play an important role in the success of construction projects as they
are the ones who carry out the actual construction work and complete the
project by supplying their skills and knowledge (i.e. service) or material.
Therefore, getting the right supplier for the right job is critical towards the
success of any construction project. To achieve this, however, entails efficient
information and communication technology (ICT) aided information system
for managing the performance of the suppliers. Most of the local construction
companies are found to be unaware of the benefits brought about by such
systems and still resort to handle majority of the tasks manually. This research
was aimed at the development of a Web-based system that can help to better
manage suppliers‟ performance to assist in the selection of suppliers and to
facilitate the leveraging of suppliers' knowledge for the benefit of the on-going
projects.
Literature on the importance of managing suppliers‟ performance, criteria for
supplier selection, existing practice for supplier selection, importance of
knowledge sharing and reward of knowledge sharing were reviewed. Twelve
semi-structured interviews were conducted with the practitioners in the industry to explore the current approaches for supplier selection, the way of
managing suppliers‟ performance, and also to identify the end-users‟
requirements on the methodology for managing suppliers‟ performance and
knowledge sharing. The case studies revealed that the custom-designed
computer applications used by the case study companies for the selection and
management of suppliers‟ performance are not comprehensive in terms of the
features. The systems do not capture the historical data on the performance of
the suppliers for the selection purpose. This information is critical to reveal the
reliability of the suppliers and also to allow them to improve their performance.
In addition, the systems require the user to scan and then upload the written
documents to the system. This is not only time consuming but also
inconvenient.
The system developed consists of a Web-based database to store the relevant
information with modules for managing the criteria for supplier selection,
knowledge capture and evaluation, and managing suppliers‟ performance
across projects. In order to improve the functionality of the system, the system
was tested and evaluated by the participants from the construction companies
interviewed before. Positive feedbacks were received with an overall score of
3.8 out of 5.0. Simply put, the system can facilitate the informed decision
making on the selection of the most suitable suppliers based on the records
captured in the system. It allows the continuous improvement to the project at
different stages by allowing suppliers to share their knowledge as to how
improvements can be made. Further studies may involve the development of
an improved version of this prototype application where it caters for the need to select and manage the performance of different types of suppliers with
different sets of criteria. 

1.1 Background 1

1.2 Rationale for the Research 3

1.3 Aim and Objectives 5

1.4 Research Methodology 6

1.5 Scope and Limitations 8

1.6 Report Layout and Contents 9

2.1 Defining Supplier 12

2.2 Importance of Managing Suppliers‟ Performance 15

2.2.1 Cost Reduction 15

2.2.2 Decreased Production Development Lead Time 16

2.2.3 Reduction of Risk 17

2.2.4 Better End Product Quality and Customer

Satisfaction 17

2.2.5 Preventing the Deterioration of Supply Chain 18

2.2.6 To Enjoy Mutual Benefits Brought About 18

2.2.7 Improved Company Competitiveness 19

2.3 Criteria for Supplier Selection 20

2.3.1 Cost / Price 23

2.3.2 Performance 24

2.3.3 Time / Delivery 25

2.3.4 Supplier‟s Profile 26

2.4 Current Practice 31

2.4.1 Web-Based Sub-Contractor Evaluation System

(WEBSES) 32

2.4.2 e-Reporting System 33

2.4.3 Mathematical Programming (MP) 33

2.4.4 Multi-Attribute Decision Making/Multi-Criteria

Decision Making (MADM/ MCDM) 37

2.4.5 Case-Based Reasoning (CBR) 41

2.4.6 Fuzzy Set Theory (FST) 43

2.5 Shortcomings of Current Practice 44

2.6 Summary 47

3.1 Defining Knowledge 48

3.2 Types of Knowledge 50

3.3 Knowledge Management Processes 52

3.4 Knowledge Sharing 54

3.5 Importance of Knowledge Sharing 55

3.5.1 Facilitating the Access and Sharing of

Knowledge across Projects 56

3.5.2 Reduction in Construction Project Costs 57

3.5.3 Faster Completion of Construction Project 57

3.5.4 Improvement of Firms‟ Innovation Capability 58

3.5.5 Risk Minimisation 59

3.5.6 Gaining Competitive Advantage 59

3.6 Rewards for Knowledge Sharing 60

3.6.1 Encouraging Knowledge Sharing Among

Project Participants 61

3.6.2 Recognising Team Member‟s Contribution 62

3.7 Summary 63

4.1 The Meaning of Research 64

4.2 Research Strategy 66

4.2.1 Quantitative Research 66

4.2.2 Qualitative Research 67

4.2.3 Triangulation or Combined Approach 69

4.3 Research Design 71

4.4 Summary 75

5.1 Background of Case Studies Company 76

5.2 Findings from the Case Studies 77

5.2.1 Company E 78

5.2.2 Company H 82

5.2.3 Company K 84

5.2.4 Other Companies 88

5.3 Discussion 89

5.3.1 Shortcomings of Current Approach for the

Selection of Suppliers and the Management

of Their Performance 94

5.3.2 Requirements for the Development of the

System 95

5.4 Methodology for Managing Suppliers‟ Performance

and Knowledge Sharing 99

5.4.1 Block A: System Administrators to Register

Users 101

5.4.2 Block A1: Contribution of Knowledge by

Suppliers 101

5.4.3 Block A2: Knowledge Validation by Experts 102

5.4.4 Block A3: Dissemination of Knowledge 102

5.4.5 Block B1: Supplier Selection 103

5.4.6 Block B2: Evaluation of Suppliers' Performance 103

5.4.7 Block B3: Communication of the Performance

with the Suppliers 104

5.5 Summary 105

6.1 System Architecture of Prototype Application 106

6.2 Selection of Development Environment 108

6.3 User Interface and Program Codes Development 109

6.3.1 Supplier Selection 109

6.3.2 Evaluate Suppliers‟ Performance 112

6.3.3 Validate Knowledge 114

6.3.4 Suppliers to Comment on Their Own

Performance Score 117

6.3.5 Project Administrators‟ Response to Comment 117

6.4 Database Design 118

6.5 Operation of the Prototype Application 119

6.5.1 Logging In 119

6.5.2 Browsing the Home Page 121

6.5.3 Edit Company‟s Profile 122

6.5.4 To View Supplier Company‟s Current Projects 124

6.5.5 Past Subcontracting Works‟ Score 127

6.5.6 My Company‟s Knowledge Contributed 130

6.5.7 Contribute New Knowledge 131

6.5.8 Latest Knowledge Contributed 133

6.6 Roles Assigned to the Users 134

6.6.1 Ordinary Users 134

6.6.2 Experts 134

6.6.3 Project Administrators 135

6.6.4 System Administrators 135

6.7 Testing and Evaluation of the System 136

6.7.1 Prototype Testing 138

6.7.2 Statement Test 138

6.7.3 Prototype Evaluation 143

6.7.4 Evaluation Results 145

6.7.5 Suggestions for Improvement 149

6.8 Summary 151

7.1 Summary 153

7.2 Conclusion 161

7.3 Further Work 167

7.4 Limitation of the Research 169

7.5 Concluding Remarks 170