Supplier development and its incentives in infrastructure mega-projects: A case study on Hong Kong-Zhuhai-Macao Bridge project

doi:10.15302/J-FEM-2018077

Front. Eng

2018, Vol. 5

Issue (1) : 88-97 https://doi.org/10.15302/J-FEM-2018077

RESEARCH ARTICLE

Supplier development and its incentives in infrastructure mega-projects: A case study on Hong Kong-Zhuhai-Macao Bridge project

Wei ZENG¹(

), Jinwen ZHANG², Hongwei WANG³, Hongtao ZHOU¹

¹. School of Automation, Huazhong University of Science and Technology, Wuhan 430074, China
². Hong Kong-Zhuhai-Macao Bridge Authority, Zhuhai 519060, China
³. School of Automation, Huazhong University of Science and Technology, Wuhan 430074, China; School of Management, Huazhong University of Science and Technology, Wuhan 430074, China

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Abstract

In this paper the Hong Kong-Zhuhai-Macao Bridge project is taken as a case to analyze supplier development in infrastructure mega-projects. Compared with manufacturing industry, the characteristics of supplier development in infrastructure mega-projects is analyzed in term of development motives, supplier selection, quality management, production mode, owner participation and risks. The critical factors influencing the construction supplier development are identified, which include incentives, collaboration, future market, trust and bilateral communication. Furthermore, focusing on the incentives for the supplier’s product quality and production capacity improvement, decision-making framework models are proposed to design the incentive mechanisms.

Keywords infrastructure mega-project supplier development critical success factors incentives case study

Corresponding Author(s): Wei ZENG

Just Accepted Date: 25 December 2017 Online First Date: 30 January 2018 Issue Date: 21 March 2018

Cite this article:

Wei ZENG,Jinwen ZHANG,Hongwei WANG, et al. Supplier development and its incentives in infrastructure mega-projects: A case study on Hong Kong-Zhuhai-Macao Bridge project[J]. Front. Eng, 2018, 5(1): 88-97.

URL:

https://academic.hep.com.cn/fem/EN/10.15302/J-FEM-2018077
https://academic.hep.com.cn/fem/EN/Y2018/V5/I1/88

Fig.1 Collaboration between the owner and the supplier in the supplier development

Factors	Drivers	Barriers	Study
Incentives	The owner’s incentives motivate the suppliers to actively participate in the supplier development, thereby ensuring the resource supply and enhancing the suppliers’ competitiveness.		^{Krause et al., 2000}; Toin and Nassimbeni, 2000; Mead and Gruneberg, 2013
Collaboration	Collaboration at the strategy, operation and support layer enables the organization and conduct of supplier development activities.	The owner and its suppliers have to pay high attention to collaboration from high level leaders to executive level and this requires heavy investment on manpower, material and financial resources.	^{Krause et al., 2000}; Nagati and Rebolledo,2013; ^{Li et al., 2007}
Future Market	To improve the competitiveness in the future market is one of important factors for the suppliers to take part in the supplier development program.	Uncertainties and risks of the future market affect the supplier’s return on investment and willingness to participate in the supplier development.	Mead and Gruneberg, 2013
Trust	The mutual trust between the owner and the supplier can build a good cooperative partnership and help facilitate the conduct of supplier development activities.	Different interests among the participants often hinder the achievement of their mutual trust.	^{Handfield et al., 2000}; ^{Li et al., 2007}; ^{Sako, 2004}
Bilateral communication	The effective bilateral communication can accurately identify the requirements of supplier development, detect problems during the supplier development process and improve the efficiency of the supplier development activities.	The poor communication between the owner and the supplier often leads to deviations or inefficiencies during the supplier development process.	^{Krause et al., 2000}; Nagati and Rebolledo,2013; ^{Li et al., 2007}; ^{Krause, 1999}
Suppliers’ competitiveness	Suppliers’ own abilities, including product quality, productivity, and management capacity, affect the owner’s supplier selection and supplier development method and input.		^{Hahn et al., 1990}; ^{Mahapatra et al., 2012}; ^{Modi and Mabert, 2007}

Tab.1 summary of the drivers and barriers of construction supplier development.

Fig.2 Conceptual model of construction supplier development

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