Fourth-Party Logistics in Off-Site Construction: A Synergy-Based Service Strategy

Authors

  • Behnam Karimi Department of Industrial Engineering, Iran University of Science & Technology, Tehran, Iran.
  • Mohammad Mohammadpour Omran * Department of Industrial Engineering, Iran University of Science & Technology, Tehran, Iran.

https://doi.org/10.48313/scodm.v2i4.43

Abstract

The construction Supply Chain (SC) suffers from very low productivity due to the temporary nature of projects, the complexity and extent of communication between actors, and high logistics costs. Therefore, leveraging synergy and interaction, along with the presence of an integrator, can help mitigate these challenges. Fourth-party logistics is one of the drivers that can be considered an integrator in the construction industry, given its successful implementation in other industries. This study presents a mathematical model to investigate the effect of synergy in the construction industry by taking advantage of the integrative potential of a 4PL. It also considers the interaction between contractors and 4PL, pricing for the supply of raw materials, and the choice of transportation method, thereby bringing the problem closer to reality. To validate and demonstrate the efficiency of the proposed model, GAMS, a commercial software package, is used to conduct sensitivity analyses of key variables. The results show that creating a synergistic framework between contractors and leveraging the integrative capabilities of a fourth-party logistics enterprise can significantly reduce project delivery costs and delays, suggesting the proposed model's higher efficiency than those available in the literature on the subject.

Keywords:

Off-site construction, Multi-project environment, Synergistic logistics, Fourth-party logistics, Integrated management

References

  1. [1] Jin, R., Gao, S., Cheshmehzangi, A., & Aboagye-Nimo, E. (2018). A holistic review of off-site construction literature published between 2008 and 2018. Journal of cleaner production, 202, 1202–1219. https://doi.org/10.1016/j.jclepro.2018.08.195
  2. [2] Heravi, G., Kebria, M. F., & Rostami, M. (2021). Integrating the production and the erection processes of pre-fabricated steel frames in building projects using phased lean management. Engineering, construction and architectural management, 28(1), 174–195. https://doi.org/10.1108/ECAM-03-2019-0133
  3. [3] Wang, J., Li, Z., & Tam, V. W. Y. (2015). Identifying best design strategies for construction waste minimization. Journal of cleaner production, 92, 237–247. https://doi.org/10.1016/j.jclepro.2014.12.076
  4. [4] Tam, V. W. Y., Fung, I. W. H., Sing, M. C. P., & Ogunlana, S. O. (2015). Best practice of prefabrication implementation in the Hong Kong public and private sectors. Journal of cleaner production, 109, 216–231. https://doi.org/10.1016/j.jclepro.2014.09.045
  5. [5] Fard, M. M., Terouhid, S. A., Kibert, C. J., & Hakim, H. (2017). Safety concerns related to modular/prefabricated building construction. International journal of injury control and safety promotion, 24(1), 10–23. https://doi.org/10.1080/17457300.2015.1047865
  6. [6] Monahan, J., & Powell, J. C. (2011). An embodied carbon and energy analysis of modern methods of construction in housing: A case study using a lifecycle assessment framework. Energy and buildings, 43(1), 179–188. https://doi.org/10.1016/j.enbuild.2010.09.005
  7. [7] Wang, J., Zhao, J., & Li, W. (2019). The mathematical modeling, simulation, and practice of a multipoint synchronous lifting control case study for bridges. Mathematical problems in engineering, 2019(1), 5936434. https://doi.org/10.1155/2019/5936434
  8. [8] Wang, Z., Hu, H., Gong, J., Ma, X., & Xiong, W. (2019). Precast supply chain management in off-site construction: A critical literature review. Journal of cleaner production, 232, 1204–1217. https://doi.org/10.1016/j.jclepro.2019.05.229
  9. [9] Love, P. E. D., Irani, Z., & Edwards, D. J. (2004). A seamless supply chain management model for construction. Supply chain management: an international journal, 9(1), 43–56. https://doi.org/10.1108/13598540410517575
  10. [10] Fernie, S., & Tennant, S. (2013). The non-adoption of supply chain management. Construction management and economics, 31(10), 1038–1058. https://doi.org/10.1080/01446193.2013.830186
  11. [11] Sundquist, V., Gadde, L. E., & Hulthén, K. (2018). Reorganizing construction logistics for improved performance. Construction management and economics, 36(1), 49–65. https://doi.org/10.1080/01446193.2017.1356931
  12. [12] Le, P. L., Chaabane, A., & Dao, T. M. (2022). BIM contributions to construction supply chain management trends: an exploratory study in Canada. International journal of construction management, 22(1), 66–84. https://doi.org/10.1080/15623599.2019.1639124
  13. [13] Bakker, R. M. (2010). Taking stock of temporary organizational forms: A systematic review and research agenda. International journal of management reviews, 12(4), 466–486. https://doi.org/10.1111/j.1468-2370.2010.00281.x
  14. [14] Hsu, P. Y., Angeloudis, P., & Aurisicchio, M. (2018). Optimal logistics planning for modular construction using two-stage stochastic programming. Automation in construction, 94, 47–61. https://doi.org/10.1016/j.autcon.2018.05.029
  15. [15] Wang, Z., Hu, H., & Gong, J. (2018). Simulation based multiple disturbances evaluation in the precast supply chain for improved disturbance prevention. Journal of cleaner production, 177, 232–244. https://doi.org/10.1016/j.jclepro.2017.12.188
  16. [16] Hussein, M., Eltoukhy, A. E. E., Karam, A., Shaban, I. A., & Zayed, T. (2021). Modelling in off-site construction supply chain management: A review and future directions for sustainable modular integrated construction. Journal of cleaner production, 310, 127503. https://doi.org/10.1016/j.jclepro.2021.127503
  17. [17] Ekeskär, A., & Rudberg, M. (2016). Third-party logistics in construction: the case of a large hospital project. Construction management and economics, 34(3), 174–191. https://doi.org/10.1016/j.jclepro.2021.127503
  18. [18] Thunberg, M., & Fredriksson, A. (2018). Bringing planning back into the picture--How can supply chain planning aid in dealing with supply chain-related problems in construction? Construction management and economics, 36(8), 425–442. https://doi.org/10.1080/01446193.2017.1394579
  19. [19] Li, S., & Chen, X. (2019). The role of supply chain finance in third-party logistics industry: A case study from China. International journal of logistics research and applications, 22(2), 154–171. https://doi.org/10.1080/13675567.2018.1502745
  20. [20] Simchi-Levi, D., Kaminsky, P., & Simchi-Levi, E. (1999). Designing and managing the supply chain: Concepts, strategies, and cases. McGraw-hill New York. https://www.academia.edu/download/31133595/FAI-09__PROC_5850__Brannon__R.pdf
  21. [21] Bauknight, D. N., & Miller, J. R. (1999). Fourth party logistics: The evolution of supply chain outsourcing. CALM supply chain & logistics journal, 186.
  22. [22] Wang, H., Huang, M., Ip, W. H., & Wang, X. (2021). Network design for maximizing service satisfaction of suppliers and customers under limited budget for industry innovator fourth-party logistics. Computers & industrial engineering, 158, 107404. https://doi.org/10.1016/j.cie.2021.107404
  23. [23] Yin, M., Huang, M., Wang, X., & Lee, L. H. (2022). Fourth-party logistics network design under uncertainty environment. Computers & industrial engineering, 167, 108002. https://doi.org/10.1016/j.cie.2022.108002
  24. [24] Aissaoui, N., Haouari, M., & Hassini, E. (2007). Supplier selection and order lot sizing modeling: A review. Computers & operations research, 34(12), 3516–3540. https://doi.org/10.1016/j.cor.2006.01.016
  25. [25] Said, H., & El-Rayes, K. (2011). Optimizing material procurement and storage on construction sites. Journal of construction engineering and management, 137(6), 421–431. https://doi.org/10.1061/(ASCE)CO.1943-7862.0000307
  26. [26] Plebankiewicz, E., & Kubek, D. (2016). Multicriteria selection of the building material supplier using AHP and fuzzy AHP. Journal of construction engineering and management, 142(1), 4015057. https://doi.org/10.1061/(ASCE)CO.1943-7862.0001033
  27. [27] Liu, Q., Xu, J., & Qin, F. (2017). Optimization for the integrated operations in an uncertain construction supply chain. IEEE transactions on engineering management, 64(3), 400–414. https://doi.org/10.1109/TEM.2017.2686489
  28. [28] Choudhari, S., & Tindwani, A. (2017). Logistics optimisation in road construction project. Construction innovation, 17(2), 158–179. https://doi.org/10.1108/CI-03-2016-0014
  29. [29] Jaśkowski, P., Sobotka, A., & Czarnigowska, A. (2018). Decision model for planning material supply channels in construction. Automation in construction, 90, 235–242. https://doi.org/10.1016/j.autcon.2018.02.026
  30. [30] Deng, Y., Gan, V. J. L., Das, M., Cheng, J. C. P., & Anumba, C. (2019). Integrating 4D BIM and GIS for construction supply chain management. Journal of construction engineering and management, 145(4), 4019016. https://doi.org/10.1061/(ASCE)CO.1943-7862.0001633
  31. [31] Nolz, P. C. (2021). Optimizing construction schedules and material deliveries in city logistics: A case study from the building industry. Flexible services and manufacturing journal, 33(3), 846–878. https://doi.org/10.1007/s10696-020-09391-7
  32. [32] Fredriksson, A., Janné, M., & Rudberg, M. (2021). Characterizing third-party logistics setups in the context of construction. International journal of physical distribution & logistics management, 51(4), 325–349. https://doi.org/10.1108/IJPDLM-03-2019-0078
  33. [33] Le, P. L., Jarroudi, I., Dao, T. M., & Chaabane, A. (2021). Integrated construction supply chain: an optimal decision-making model with third-party logistics partnership. Construction management and economics, 39(2), 133–155. https://doi.org/10.1080/01446193.2020.1831037
  34. [34] RezaHoseini, A., Noori, S., & Ghannadpour, S. F. (2021). Integrated scheduling of suppliers and multi-project activities for green construction supply chains under uncertainty. Automation in construction, 122, 103485. https://doi.org/10.1016/j.autcon.2020.103485
  35. [35] Son, P. V. H., Duy, N. H. C., & Dat, P. T. (2021). Optimization of construction material cost through logistics planning model of dragonfly algorithm—particle swarm optimization. KSCE journal of civil engineering, 25(7), 2350–2359. https://doi.org/10.1007/s12205-021-1427-5
  36. [36] Ekeskär, A., & Rudberg, M. (2022). Third-party logistics in construction: perspectives from suppliers and transport service providers. Production planning & control, 33(9–10), 831–846. https://doi.org/10.1080/09537287.2020.1837932
  37. [37] Ekeskär, A., Havenvid, M. I., Karrbom Gustavsson, T., & Eriksson, P. E. (2022). Construction logistics in a multi-project context: Coopetition among main contractors and the role of third-party logistics providers. Construction management and economics, 40(1), 25–40. https://doi.org/10.1080/01446193.2021.2012815
  38. [38] Chen, Z., & Hammad, A. W. A. (2023). Mathematical modelling and simulation in construction supply chain management. Automation in construction, 156, 105147. https://doi.org/10.1016/j.autcon.2023.105147
  39. [39] Darabad, S. D., Izadbakhsh, M., Ghannadpour, S. F., Nouri, S., & Mahdavi-Mazdeh, M. (2024). A new bi-objective green construction model for multi project supply chain management under uncertainty. International journal of industrial engineering, 35(1), 1–17. https://doi.org/10.22068/ijiepr.35.1.1813
  40. [40] Aliahmadi, M., Yaghoubi, S., & Sadeghi, M. (2024). Inventory-scheduling problem in sustainable project supply chain under uncertainty. Environment systems and decisions, 44(4), 836–852. https://doi.org/10.1007/s10669-024-09975-w
  41. [41] Ghamari, H., Abbasianjahromi, H., & Mirhosseini, S. M. (2024). Providing a framework to optimize the sustainable construction material supply chain with the possibility of horizontal transfers. Sustainable futures, 8, 100328. https://doi.org/10.1016/j.sftr.2024.100328

Downloads

Published

2025-12-15

Issue

Vol. 2 No. 4 (2025): Supply Chain and Operations Decision Making

Section

Articles

How to Cite

Karimi, B. ., & Mohammadpour Omran, M. . (2025). Fourth-Party Logistics in Off-Site Construction: A Synergy-Based Service Strategy. Supply Chain and Operations Decision Making, 2(4), 219-233. https://doi.org/10.48313/scodm.v2i4.43

Similar Articles

1-10 of 26

You may also start an advanced similarity search for this article.