Transshipment approach to coordinate materials for a contractor’s project portfolio

Abstract

The challenges to coordinate material supply and dynamically changing demand always lead to construction interruptions or a considerable waste of materials on-site. Mainstream research has provided various advanced digital solutions to solve these problems; however, they have not addressed how to make reliable decisions with digital models to manage the demand fluctuations of construction materials. This study proposes a transshipment approach to enable the lateral sharing of perishable materials and optimize material allocation for a contractor’s project portfolio. The transshipment approach includes two main steps. First, the daily material supply and demand data are collected from a continuously updated schedule and three-dimensional models as input for calculating unused material quantities. Second, an evolutionary optimization algorithm is used for optimizing the transshipment quantities with minimal cost. As proof of concept, the proposed transshipment approach is demonstrated by looking at a portfolio of seven building projects managed by the same contractor. The demonstration shows that the allocation of the unused materials helps to avoid waste and reduce costs from over-ordered materials by around 52%. As a result, this also leads to improved coordination between contractors and suppliers and better material flow in construction projects.