Integrating project activities: the theory and practice of managing the supply chain through clusters

Building on the results of two demonstration projects carried out in the UK, this paper develops the notion of 'work clusters' as an organizational approach to supply chain integration and the application of concurrent engineering principles. The organizational design principles are presented together with the process used to set up clusters at project level, and the impact of the clustering arrangement on the re-engineering of the design and construction process is discussed. It is argued that the clustering arrangement successfully supported efforts to improve value, eliminate inefficiencies, and reduce costs in the project. Evidence concerning the difficulties, barriers and costs associated with the implementation of the clustering approach is also addressed. The paper concludes with some reflections on the use of clusters and on issues for future research.