Over the past few years, the UK construction industry has been situated in a difficult period due to the effect of recent recession nationally and globally. “Output in the industry fell at a faster rate than total GDP. (Construction industry, Lucinda Maer, 2011)” Despite the return of growth in economy, the progress has been seemingly sluggish at time. Nevertheless, the future outlook is providing some encouragement especially for firms in private sector . According to reports, the market is more stabilised since the impact of financial crisis in 2008. Private sector is encouraged by the future forecast of significant rise in residential unit and the returning of growth for public sector from next year onwards despite the restriction of government funding.  (The Thomas consultancy, 2012)
“ Supply chain management (SCM) is the oversight of materials, information, and finances as they move in a process from supplier to manufacturer to wholesaler to retailer to consumer..”
Supply chain management (SCM), Margaret Rouse 2010
Raw material is a key element to company operation. The process of buying these raw materials from suppliers, through the production, to become the end-product or service for customers makes up the supply chain of the business. There are many significant issues involved, amongst which are quantity and quality of these materials, in order to maintain in high standard to meet growing demand of customers.
By supporting information exchange between the company and its suppliers and customers, helping new product development as well as building trust to all stakeholders, SCM helps company to build a strong relationship with its partners. Management targets efficient and long term supplier bases, to bring company stability, production quality and eventually optimise customer’ satisfaction.  (D. Berry, D.R. Towill, N. Wadsley, 1994)
In this report, there will be a view of the fundamental idea of SCM, the relationship between SCM and UK construction industry and discussion on the problems and limitations for companies implementing SCM.
Aims and Objectives
Supply Chain management (SCM) has become one of the most universal topics in recent years. Its glowing influence has created a lot of discussion and argument among economists and journals. Both supports and critics have put forward but still plenty of variation can still be discussed.
Aim of the report:
To investigate the significance of Supply Chain Management and government influence to UK construction industry public sector
1. To establish the clear principle of Supply Chain function and its implementation to construction firms 2. To outline how key government decisions affect the supply chain of public construction firms 3. To identity the level of significance that the limitation of SCM would bring to the construction industry 4. To demonstrate the development of measurable SCM with Balance Scorecard and Benchmark concept 2. Literature review
2.1. Principle of Supply Chain Management
SCM concerns the interrelationship of supplier, customer and company. Knowing what the customers want is very important. Meeting their requirement would be significant to company success. From buying goods, production, package, transport to selling products or service to customer, every department is covered by the concepts. (NEWS, Access America Admin, 2012). SCM sets targets for the standard of materials input and production process to ensure the company could meet the requirement of customers.
Company requires regular communication, quality checking and performance review. Good communication brings in effectiveness around work place. Exchange of knowledge improves overall standards as well as minimise errors and faults. Develop good communication system would provide