Integration of Parties in the Supply Chain System for the Construction Project Successful Execution

第 55 卷 第 5 期

2020 年 10 月

JOURNAL OF SOUTHWEST JIAOTONG UNIVERSITY

Vol. 55 No. 5

Oct. 2020

ISSN: 0258-2724 DOI：10.35741/issn.0258-2724.55.5.13

Research article

Engineering

I

NTEGRATION OF

P

ARTIES IN THE

S

UPPLY

C

HAIN

S

YSTEM

FOR THE

C

ONSTRUCTION

P

ROJECT

S

UCCESSFUL

E

XECUTION

将供应链系统中的各方集成到施工项目成功执行中

Josefine Ernestine Latupeirissa a, *, Irwan Lie Keng Wong b, Herby Calvin Paskal Tiyow b a

Civil Engineering Department, Construction Management, Universitas Kristen Indonesia Paulus Jalan Perintis Kemerdekaan Km 13 Daya, Makassar, South Sulawesi, Indonesia, josefine_ernestine@yahoo.com

b _{Civil Engineering Department, Universitas Kristen Indonesia Paulus}

Jalan Perintis Kemerdekaan Km 13 Daya, Makassar, Indonesia, irwanlie_kw@yahoo.co.id,

herbycalvinpascal@gmail.com

Received: June 5, 2020 ▪ Review: September 16, 2020 ▪ Accepted: October 1, 2020

This article is an open access article distributed under the terms and conditions of the Creative Commons Attribution License (http://creativecommons.org/licenses/by/4.0)

Abstract

Parties in the supply chain system that carry out the construction of roads and bridges in Eastern Indonesia from procurement to implementation mainly consist of the owners who represent the community in the upstream and the supervisory consultants, contractors, subcontractors, and suppliers in the downstream. The project proposed in this paper will be successful if the parties carry out the process in an integrated manner according to government regulations. There has been no research on the integration of the parties from the procurement to execution stages. The existing research generally still regards the execution stage. The research objective of this project is to analyze the integration of parties in the supply chain system for the successful execution of road and bridge projects in Eastern Indonesia. To determine whether the integrated practice between parties in the supply chain system can be attributed exclusively to the successful implementation of the project, a questionnaire format was developed. Data collection took place from September 2019 to March 2020. Thirty respondents represented Owners (X1), Contractors and Subcontractors (X2), Supervisory Consultants (X3), and Suppliers (X4), whereas the success of the project’s implementation was represented with (Y). Data were analyzed using multiple linear regression. The analysis result of R-squared = 0.96 means that the parties are significantly integrated. F = 147.92 means that the variant of the regression model is good. P-value or significance F < 0.05 means that the parties’ integration is very significant for the project’s success.

摘要 在供应链系统中，从采购到实施在印度尼西亚东部进行道路和桥梁建设的各方主要包括上游 社区的所有者和下游的监督顾问，承包商，分包商和供应商。如果各方根据政府规定以综合方式 进行此过程，那么本文提出的项目将是成功的。从采购到执行阶段，还没有关于各方整合的研究 。现有的研究通常仍处于执行阶段。该项目的研究目标是分析供应链系统中各方的整合，以成功 实施印度尼西亚东部的道路和桥梁项目。为了确定供应链系统中各方之间的综合实践是否可以仅 归因于项目的成功实施，开发了一种问卷格式。数据收集于 2019 年 9 月至 2020 年 3 月。30 位受 访者代表所有者（X1），承包商和分包商（X2），监督顾问（X3）和供应商（X4），而项目实施 的成功则以（Y ）。使用多元线性回归分析数据。R 平方= 0.96 的分析结果意味着各方是显着整 合的。F = 147.92 表示回归模型的变量良好。 P 值或显着性 F <0.05 表示，各方的整合对于项目 的成功非常重要。 关键词: 各方整合，供应链系统，建设

I. INTRODUCTION

A. Background Research

Infrastructure is the foundation that connects the nation’s businesses, communities, and people, driving the economy and improving the quality of life; for example, transport systems move people and goods efficiently and at a reasonable cost by land, water, and air [1]. Investment in large-scale infrastructure has accelerated in the last decade, where road transportation in particular features predominantly in development initiatives globally [2]. The development of large-scale infrastructure, such as highways, railways, mass rapid transit, and airports, also needs a large investment of the public and private sectors [3].

Transportation is a leading sector for the development of social productivity and the improvement of science and technology. In the master plan and long-term plan of national economic and social development, the transportation plan should be considered not only in terms of the transportation mode itself, but also in the context of transportation orientation development [4].

Transportation is a pervasive and extremely vital function in all industrialized economies. Transportation systems provide the critical links between producers and consumers both domestically and globally. The citizens of industrialized countries are dependent upon transportation systems to move products from distant locations where they are produced to markets where they are needed and where they can be sold and consumed. An efficient and effective transportation system is essential for businesses to produce and sell products and services. It has long been recognized that one of the critical ingredients for underdeveloped countries to improve economically is investing in

transportation infrastructure. This investment is frequently referred to as social capital; that is, society as a whole is the beneficiary of such investment because of the economic benefits associated with new businesses, higher wages, and more jobs, and the social benefits associated with mobility, improved educational systems, and communication [5].

Road networks and bridge systems play an important role in the connection of different regions. They also facilitate trade and cooperation between countries at their national borders. As urbanization has accelerated in many regions, the problems of inadequacy in the road and bridge infrastructure system and deterioration of the environment have become enormous. The pressure on these systems in terms of rapid population growth, spatial expansion, and road and bridge infrastructure development is often high [6].

In Indonesia, the construction of road and bridge infrastructure is still the main priority program that the current Indonesian government is able to sustain. The vision and mission that was announced has mainly concerned the realization of the construction of quality roads and bridges in order to support the independence of the government and society. Road and bridge infrastructure, such as land transportation infrastructure, is part of the facilities and infrastructure that are supporting components of the national defense system in times of military threats. The infrastructure built by the government has a very important purpose, considering its function to facilitate the flow of goods and people from one place to another and the flow of goods from production sources to marketing centers. In addition, the use of bridges and highways facilitates the economic growth of a nation, economic equality, smooth traffic, gross regional domestic product growth, and so on. The

existence of bridges and highways also has a function as a connector; the security of a nation can be more evenly distributed via cultural exchanges between regions and accelerating community activities in the region [7].

The availability of road and bridge infrastructure is very important for the following reasons, among others:

a) the realization of a reliable, integrated, and sustainable national road network system that supports economic growth and social welfare; b) the realization of a sustainable national road network with adequate mobility, accessibility, and safety that serves national activity centers, regions, and national strategic areas; and c) the establishment of a national expressway network between cities and in urban areas that has a high intensity of logistical movements that connect and serve major national economic activity centers. In addition to being able to facilitate the increased capacity of local governments to construct sustainable local roads with adequate mobility, accessibility, and safety, a database on national road and bridge conditions should be provided through national road and bridge condition survey activities, and supervision will be conducted in order to assist the parties in the implementation of development work [8].

B. Contribution and Scope

Considering that the State of Indonesia consists of large and small islands, building a suitable transportation system is essential. The development of equitable connectivity is not only carried out on large islands such as provinces of Papua but also on other small islands, such as the provinces of Maluku and North Maluku, commonly called Eastern Indonesia. The Indonesian government is focusing on building road and bridge infrastructure in the region [8].

The road and bridge construction in Eastern Indonesia, starting from the procurement stage to the execution stage, is carried out by the parties in the supply chain system (SCS) from upstream to downstream. In this research, upstream parties are service users or project owners who represent the community while downstream parties are service providers, such as supervisory consultants, contractors, subcontractors, and suppliers.

The success of the process of procuring road and bridge construction projects by the parties in the SCS will be achieved if the parties carry out the process seriously based on the principles and ethics mandated in government regulations, such as transparency, honesty, fairness, trust, responsibility, competence, discipline, quality and so on [9], [10]. Therefore, the parties must

integrate from the procurement stage to the execution stage because the determination of auction winners at the procurement stage will determine success at the execution stage. Selecting the right contractor for a construction project is one of the most critical and difficult decisions a project owner must make in order to ensure the successful completion of a project [11].

The integration in this study is the unity of the construction party from upstream, that is, the owner, to downstream, namely the supplier, so that the procurement up to the project execution is successful.

Several studies have been carried out on the SCS in construction projects in Indonesia, but only on the relationship between downstream parties that is contractors and suppliers. The owner's role in the supply chain exists if the construction product has investment objectives. However, if construction projects do not have investment as an objective, the contractor, in a typical pattern of relationships, plays a role in preparing the SCS [12]. Contractors, subcontractors, and suppliers, as 2nd- and 3rd-level organizations, are in the SCS to meet the wishes and needs of the owner of the project [13]. The results of research on the supply-chain pattern of road and bridge construction projects in East Sumba Regency, East Nusa Tenggara Province, and Central Indonesia show that the owner plays the leading role in forming a construction supply-chain network [14].

However, there is no research yet on how the

relationship of owners, contractors,

subcontractors, supervisory consultants, and suppliers in the SCS contributes to the success of the road and bridge construction projects.

Thus, the purpose of this study is to analyze the integration of parties in the

to the construction of road and bridge SCS for the construction project’s successful execution.

The scope of this research is limited projects in Eastern Indonesia.

II. F

R A M E W O R K A N D

METHODS OF

RESEARCH

A. Framework Research

The procurement of public projects in Indonesia, such as roads and bridges, is guided by the Construction Services Law No. 2/2017, which aims to a) provide direction for the growth and development of construction services to realize a stable, reliable, highly competitive business structure and quality results of construction services; b) realize orderliness in the operation of services, in a construction that

guarantees equality between rights and obligations of service users and service providers and improved compliance through the provisions of laws and regulations; c) realize increased public participation in the field of construction services; d) arrange a capable construction services system realizing public safety and creating the comfort of the built environment; e) ensure good governance in the implementation of construction services; and f) create value-added integration of all stages of construction services implementation [15]. Therefore, all parties involved in the SCS for the construction of roads and bridges must comply with the provisions above.

Supply chain integration and collaboration are used to improve performance by establishing close relationships and the alignment of activities between upstream and downstream actors in the supply chain [16], [17]. In construction, both integration and collaboration are seen as ways to increase the efficiency and quality of production processes [18], [19].

With the traditionally adversarial nature of contractual relationships in construction projects and the fragmented production environment, the construction industry faces strong barriers to supply chain integration [20]. This predicament always results in ineffective, inefficient, and inadequate mechanisms to deliver good services and profitability [21].

Integration initiated by project stakeholders may appear in different forms depending on the level of integration, specific construction sub-sector, and type of project. Higher levels of integration within the supply chain have been coined to lead to higher levels of effectiveness and efficiency. Some recent evidence suggests that there are opportunities for improving integration practices although, it usually is an elusive goal [22]. Similarly, [23] showed a new approach by the main contractor in establishing qualified partnering with subcontractors that has yielded improvement in terms of integration. Thus, if the parties implement integration from the start of the project, there is hope that the project execution will be successful.

The construction industry, in many countries, has drawn criticism for inefficiencies in results, such as excess time and cost, low productivity, poor quality, and inadequate customer satisfaction [24]. The construction industry, in general, is highly fragmented with significant negative impacts—perceived low productivity, cost and time overruns, conflicts, disputes and the resulting claims, and time-consuming litigation. These have been acknowledged as the major

causes of performance-related problems facing the industry [25]. Therefore, practitioners, researchers, and society in general call for a change in attitude, behavior, and procedure to increase the chances of a construction project being successful and to produce an improved end product [26]. The success of large construction projects, especially infrastructure projects, is most important for all participants in the project management. To succeed in large infrastructure, projects need all participants who understand the aims and objectives of the project [3].

For the success in procuring government construction goods and services, or goods and services belonging to the public, Indonesia— especially the procurement of road and bridge projects in Eastern Indonesia—must meet the principles and ethical elements that include efficiency, effectiveness, transparency, openness, competitiveness, fairness and accountability,

independence, professionalism, trust,

responsibility, honesty, competency, the avoidance and prevention of conflicts of interest and abuse of authority, collusion, and nepotism. [9]. If the parties can integrate into the supply chain process, by adhering to the above provisions, the project objectives will be achieved. The main objective of construction projects is to finish the project according to the budget available, within a planned schedule, and to achieve a pre-specified extent of quality. Therefore, time, cost, and quality are considered the most important attributes of construction projects [27].

Based on the description above the research framework that describes the integration of parties that influence the success of the project execution can be mapped in Figure 1 below.

Owners Contractors/ Subcontractors Supervisory Consultants Suppliers On time Honest Responsible Competent Trust Fair Competent Responsible Quality Transparent Professional

Construction Project Successfull Execution

On time Exactly cost Right quality Precise scope etc etc etc etc

Figure 1. Integration of parties in the SCS for the construction project successful execution

B. Method Research

To address the question of whether the integrated practice among parties, namely the owner, contractor, subcontractor, supervisory consultant and the supplier, could exclusively be associated with the successful implementation of the project, the format of the questionnaire was developed on the basis of the original framework for the integration of parties in the SCS (Figure 1).

1) Data Collection

Data collection took place from September 2019 to March 2020. The method of collecting data is carried out in several ways, namely, by directly reviewing the place of research, through electronic networks and other communication media. The objective of this survey was to determine the level of integration of upstream to downstream construction projects in Eastern Indonesia. This research was conducted by evaluating each practice the parties in the SCS from the procurement stage to the execution stage of road and bridge based on the perspective of respondents who have knowledge and experience in supply chain management.

All 30 respondents (Rs) who were used for the research sample represented owners, contractors, and subcontractors, supervision consultants, and suppliers. These parties are those with approximately ten years of experience in the procurement and execution of road and bridge projects in Eastern Indonesia.

Only one question asked, namely, how would the respondent's opinion if the parties integrated from the procurement process to the execution of the road and bridge construction projects on the success of the project implementation based on the parameters described in Tables 1 and 2. The parameter level is measured on a 3-point Likert scale [28].

The parties where X1 is Owner integration (OI), X2 is contractor/subcontractor integration (CI/ScI), X3 is supervisory consultant integration (SCI and X 4 is supplier integration (SI) which is the independent variables.

Table 1.

Measurement of variable X level of integration of the parties

Parameter Score

High integration 3 Moderate integration 2 Low Integration 1 Table 2.

Measurement of variable Y level of success of project execution

Parameter Score

Very High succeed 5 High succeed 4 Moderate succeed 3 Low succeed 2 Very Low succeed 1

The response variable Y or the dependent variable in this study, is the success of project execution, influenced by four input variables, namely OI, CI / ScI, SCI, and SI. Respondents' opinions based on knowledge and experience recorded simultaneously. This data can be seen in Table 3, and Figure 2. The parameter level is measured on a 5-point Likert scale [28].

Table 3.

Results of respondents' assessment of research questions R’s Project success (Y) OI (X1) CI/ScI (X2) SCI (X3) SI (X4) 1. 5 3 3 3 3 2. 5 3 3 3 3 3. 4 2 3 2 2 4. 5 3 3 3 3 5. 5 3 3 3 3 6. 5 3 3 3 3 7. 5 3 3 3 3 8. 4 2 2 3 2 9. 5 3 3 3 3 10. 3 2 2 2 3 11. 5 3 3 3 3 12. 5 3 3 3 3 13. 5 3 3 3 3 14. 5 3 3 3 3

15. 5 3 3 3 3 16. 5 3 3 3 3 17. 5 3 3 3 3 18. 5 3 3 3 3 19. 5 3 3 3 3 20. 5 3 3 3 3 21. 5 3 3 3 3 22. 4 3 2 3 3 23. 5 3 3 2 3 24. 5 3 3 3 3 25. 5 3 3 3 3 26. 5 3 3 3 3 27. 5 3 3 3 3 28. 5 3 3 3 3 29. 5 3 3 3 3 30. 5 3 3 3 3 ∑ 145 87 87 87 88

Figure 2. Results of respondents' assessment of research questions mapping

2) Data Analysis

In this study, the right model for analyzing the causal relationship between the parties' integration in the SCS for construction project successful execution from the procurement stage to the execution stage is uses multiple linear regression models. The multiple linear regression model is referred to as a model of relationship where the response depends ontwo or more predictor variables, use the formula [29].

ei xi xi Y  0 1 1 2 2... ^







(1)

where i = number of respondents, xi1, xi2 and soon are the parties,

^

Y

is regression coefficient, the regression parameter, 0,1,2 and so on are unknown.

The response variable y in research was expected to be influenced by four input variables x1, x2, x3, and x4 and that the data relevant to these input variables are recorded along with the measurement of y.

II. RESULTS AND DISCUSSION

Project success means different things to different people [30]. Traditionally, success is defined as the degree to which project goals and expectations are met [31]. The conventional measures of the so-called iron triangle of time, cost, and quality has been the dominating performance indicator in construction projects [32]. The successful accomplishment of cost, time, and quality objectives was regarded as project management success [33]. Conversely, that there is more to project success than just meeting time, cost, and quality objectives, and the project management community needs to be educated [34]. With regard to this, the concept of project success in terms of the perspective of the integration of the parties is studied, to establish criteria and standards that can help project participants complete the project with the most desired results so that not only the contractor is responsible for the success of the project.

The results of the data analysis are shown in Tables 4, 6, 7, and 8.

Table 4.

Results of data analysis of integration the parties

Coefficients

Standard

Error t Stat P-value

Lower 95% Upper 95% Lower 95.0% Upper 95.0% Intercept 0.5 0.316228 1.581139 0.126417 0.15128 1.151283 -0.15128 1.151283

OI (X1) 1 0.174356 5.735393 5.64E-06 0.640907 1.359093 0.640907 1.359093 CI / ScI (X2) 0.75 0.088882 8.438159 8.77E-09 0.566944 0.933056 0.566944 0.933056 SCI (X3) 0.25 0.088882 2.81272 0.009424 0.066944 0.433056 0.066944 0.433056 SI (X4) -0.5 0.142829 -3.5007 0.001762 -0.79416 -0.20584 -0.79416 -0.20584

Based on Table 4, the multiple linear regression equation models can be shown as follows: ) ( 4 5 . 0 ) ( 3 25 . 0 ) / ( 2 75 . 0 ) ( 1 5 . 0 ^ SI X SCI X ScI CI X OI X Y      (2)

Prediction or forecasting of variable X based on the respondent’s answer (Table 3) is provided in Table 5.

Table 5.

^

Y

base on respondent’s answer

Respondent ^

Y

Parameter

R1 5.000 Very High succeed R3 4.250 High succeed R8 3.750 Moderate succeed to

High succeed R10 3.000 Moderate succeed R22 4.250 High succeed

In accordance with the title of the article, an analysis of the integration of the parties was carried out. If the integration of the parties (X1, X2, X3, X4) is high, then the success of the project must be high. This means, if the coordination among all the parties is high, the project execution will be very successful (R1). If only SCI integration is high while the integration of OI, CI/ScI, and SI is moderate, then the execution of the road and bridge project will be between moderately to highly successful (R8). If only the SI is high and the OI, CI/ScI, and SCI are moderate, the project execution will be a moderate success (R10). If the coordination between CI/ScI is moderate while that among the other three parties is high, then the project execution will be highly successful (R3, R22).

The strength of the relationship between the integration of the parties OI, CI/ScI, SCI, and SI (or X1, X2, X3 and X4 - independent variable, which contributes to the success of the project) and the success of project execution (or Y - dependent variable) can be seen in the results for Multiple R, R-squared (R2) and Adjusted R-squared (Adjusted R2), as shown in Table 6.

Table 6.

The strength of the relationship between the integration of the parties with the success of project execution

Regression statistics Multiple R 0.97952 R-squared 0.959459 Adjusted R-squared 0.952973 Standard Error 0.1 Observations 30

Multiple R measures the closeness of the linear relationship between the dependent variable and the independent variable. In this study, Multiple R = 0.98 is close to 1, indicating a strong relationship between the integration of the parties, forming the independent variable, and the successful execution of road and bridge construction projects.

The coefficient of determination or R2 is a measure of the suitability of the regression equation to predict an outcome. In other words, the proportion or percentage of the total variation of the dependent variable is influenced by the independent variable. In this study, R2 = 0.96 indicates that the multiple linear regression equation model used to analyze the relationship between the parties and the successful execution of road and bridge construction projects is statistically significant.

The p value or significance F measures the significance level (α) of a multiple linear regression model. When the value of significance F is close to zero, it means that the input variable has a significant effect on the output variable, as shown in Table 7.

Table 7.

p-value against alpha

The parties P-value Alpha

OI (X1) 5.64E-06 0.05 CI/ScI (X2) 8.77E-09 0.05 SCI (X3) 0.009424 0.05 SI (X4) 0.001762 0.05

The p value of the combined OI, Ci/ScI, SCI and SI variables has a value of less than



= 0.05, indicating that the coefficient value of the independent variable is significant. In addition, the F value, as the F count in hypothesis testing, is compared to the F table. If the F count is greater than the F table, it means that the independent variable has a significant effect on the dependent variable. The results found in this study are shown

in Table 8. Table 8. F value df SS MS F Regression 4 5.916667 1.47917 147.917 Residual 25 0.25 0.01 Total 29 6.166667

The results presented in Table 8 show that the calculated F count = 147.92, with the df numerator = 4, df denominator = 25 and



= 5%, the F table = 2.76. Thus, F count > F Table. This means that the resulting multiple linear regression equation is significant.

IV. CONCLUSION

The conclusion that can be drawn from the results of this study is that the optimal integration of the parties in the procurement process until the execution of the road and bridge construction project will have a very positive impact on the success of the project. If the procurement process based on principles and is not limited to transparency, honesty and fairness, then the winner of the tender must be the contractor and supervisor who has and is not limited to responsibility, competence, professionalism. A contractor displaying these values is likely to appoint subcontractors and suppliers who likewise display principled behavior. When all the parties implement the principles mentioned previously in an integrated manner, the execution of road and bridge construction projects, especially in Eastern Indonesia, will be very successful.

ACKNOWLEDGMENT

Thank you to the Ministry of Education and Culture of the Republic of Indonesia through the Directorate of Higher Education DRPM for funding this research through the 2020 Higher Education Excellence Applied.

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