Analysis of risk factors causing cost overruns in the purchasing phase of construction supply chains

Abstract

The construction supply chain (Construction Supply Chain - CSC) is a complex system that integrates various components, from stakeholders and processes to resources, to deliver final products and services. Effective CSC management can yield substantial benefits, ranging from cost optimization and quality enhancement to improved project sustainability. In particular, the procurement stage plays a pivotal role in the CSC, directly influencing the budget, schedule, and overall quality of construction projects. Recognizing this significance, the present study focuses on identifying the risk factors that lead to procurement cost overruns within the CSC. By synthesizing findings from previous studies and conducting surveys and direct interviews with industry experts and construction managers, the research initially identified 28 potential risk factors. The results of the Exploratory Factor Analysis (Exploratory Factor Analysis - EFA) reduced this to 22 risk factors, which were categorized into five main groups: (1) supplier evaluation and material quality assurance; (2) ineffective collaboration with the project owner and change management in procurement; (3) contract management strategies and supplier relationship management; (4) deficiencies in procurement cost control and supplier performance monitoring; and (5) inefficiencies in procurement strategies and interdepartmental coordination. These findings provide a critical foundation for enhancing procurement cost management, thereby contributing to the overall success of construction projects.