Supplier evaluation and development in construction: data-driven analyses

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School of Engineering | Doctoral thesis (article-based) | Defence date: 2021-06-18
Degree programme
80 + app. 72
Aalto University publication series DOCTORAL DISSERTATIONS, 70/2021
This dissertation studies the buyer's perspective on supplier evaluation and development within construction supply chain. Highlighting the multitude of suppliers in a construction firm's supply chain and the fragmented nature of the sector, former research emphasizes the essential role of implementing effective supply chain management (SCM) in construction industry. Extending this notion, adopting successful practices of supplier evaluation and development from other research and industry domains can be very beneficial to this sector. Thus, this study develops data-driven methods for supplier evaluation and development in construction using performance evaluations and purchase transaction data. The analysis involves data from suppliers that work for a large international construction firm and operated in Finnish construction projects during the period of 2010–2016. First, it is argued that supplier evaluation in a changing construction project environment differs from evaluation in the context of routine-based operations, such as manufacturing. Challenges with supplier evaluation in the context of construction projects are outlined, and a possible solution from the data envelopment analysis (DEA) context is developed and discussed. Next, it is suggested that combining DEA with the recency, frequency, and monetary value (RFM) concept and customer pyramid from marketing literature can improve supplier development (SD) investment efforts in construction. For effective SD resource allocation, suppliers are categorized based on the scores obtained from the applied framework. Then, building upon earlier research on productivity dynamics in economics and real options theory (ROT) for strategic investments with uncertainty, this work claims that there are certain patterns between the obtained supplier performance and the purchasing volume of the buying company. The study proposes that suppliers be categorized into exiting, surviving, and entering groups based on the discontinuity, continuity, and start of the buyer's purchase, respectively. This method can differentiate the influence of each supplier group from the company's supply chain performance. Finally, this study investigates supplier evaluation within the project lifecycle by testing whether the construction firm favors suppliers from the late or early project phases. Overall, this dissertation contributes to research on supplier evaluation and development by extending and presenting novel data-driven approaches in the construction supply chain context. For practitioners, the study provides effective methods to manage large supplier networks and evaluate strategic decisions to develop supplier portfolios over time.
Defence is held on 18.6.2021 12:00 – 16:00 Online via Zoom:
Supervising professor
Peltokorpi, Antti, Asst. Prof., Aalto University, Department of Civil Engineering, Finland
Thesis advisor
Kuosmanen, Timo, Prof., Aalto University, Finland
supplier evaluation, supplier development, performance analysis, data-driven methods, construction industry
Other note
  • [Publication 1]: Abdollah Noorizadeh, Antti Peltokorpi, and Necmi K. Avkiran. Supplier performance evaluation in construction projects: challenges and possible solutions. Journal of Construction Engineering and Management, 145(4), 1–13. January 2019;
    DOI: 10.1061/(ASCE)CO.1943-7862.0001616 View at publisher
  • [Publication 2]: Abdollah Noorizadeh, Kamran Rashidi, and Antti Peltokorpi. Categorizing suppliers for development investments in construction: application of DEA and RFM concept. Construction Management and Economics, 36(9), 487–506. January 2018;
    DOI: 10.1080/01446193.2017.1416151 View at publisher
  • [Publication 3]: Abdollah Noorizadeh, Timo Kuosmanen, and Antti Peltokorpi. Effective purchasing reallocation from suppliers: insights from productivity dynamics and real options theory. International Journal of Production Economics, 233. March 2021;
    Full text in Acris/Aaltodoc:
    DOI: 10.1016/j.ijpe.2020.108002 View at publisher
  • [Publication 4]: Antti Peltokorpi, Olli Seppänen, and Abdollah Noorizadeh. Project lifecycle approach to the perceived value of suppliers: a study of a Finnish contractor. In: Proceedings of the 24th Annual Conference of the International Group for Lean Construction, 3–12, Boston, Massachusetts, USA. July 2016;
    Full text in Acris/Aaltodoc: