A Research On Factors Identification And Simulation Of Transaction Cost Between Contractor And Subcontractor Of EPC Construction Supply Chain

The concept of transaction cost between contractor and subcontractor of EPC construction supply chain is that contractors cost economic expense for getting assistance from several subcontractor to complete the EPC project goal,in the process of managing Engineering,Procurement and Construction according to the contract by the model of supply chain management.It is generally believed that the EPC model can effectively reduce the transaction cost of the project.In fact,there are some problems of material chain,information chain,capital chain fragmentation or interruption in the management of EPC supply chain,due to the uneven development of the integrated capacity of contractors in China.It results contractor still have a big gap with international engineering companies in the aspect of the project profit,market share and other major.Through the literature analysis,it is found that the main problem of the EPC construction supply chain is that the contractor has insufficient ability to integrate the resources from subcontractor.The transaction costs of contractor is high for looking for a suitable subcontractor,keeping "mutual benefit" relationship with owners and subcontractors because of a long time of transaction process,high technical level,the implementation of difficulties,transaction disputes complex to deal with,of EPC project.Therefore,it is necessary to identify the factors that lead to the increase of transaction cost between the contractor and subcontractor.The contractor may realize the effective management to the subcontractor by controlling these factors,and improve their ability of resource integration.This study is based on the contractor's perspective to research transaction cost between contractor and subcontractor of EPC construction supply chain.Firstly,based on the theory of Williamson's transaction cost,this paper defines the concept and composition of transaction cost between contractor and subcontractor of EPC construction supply chain by literature analysis,and makes a literature analysis on the factors influencing of the transaction cost and the control strategy.Then,in this study,we selected the middle and senior management experienced in EPC project management in China Railway and middle construction project to make a semi-structured interview to determine the main factors affecting transaction cost between contractor and subcontractor of EPC construction supply chain: The factors of contractor and subcontractor,The factors of particular transaction,environmental factors.Finally,using the system dynamics method,this paper constructs the system Dynamics model of transaction cost between contractor and subcontractor of EPC construction supply chain,analyzes the simulation trend chart that the transaction cost changes with the cooperation times and the cooperation time,and makes the sensitivity test and policy analysis on the influencing factors,so that the managers understand the matters needing attention in the factors,Achieving the goal of reducing transaction costs.Through the simulation and simulation of the System Dynamics model of transaction cost between contractor and subcontractor of EPC construction supply chain,this study has the following conclusions: In one transaction,the transaction cost in advance > transaction costs of signing the contract> After the transaction costs;As the number of transactions increases,the transaction costs are gradually reduced and tend to a constant;In many transactions,trust and supply chain partnership have a significant effect on the reduction of transaction cost.Through sensitivity test,we get 12 sensitivity factors,such as the scale of EPC project,asset specificity level,uncertainty,the frequency of opportunistic behavior,supply chain partnership,trust level,transaction times,limited rationality level and so on,and put forward to controlling strategy of Establishing a trust mechanism and effective communication and coordination mechanism in the cooperation between contractor and the subcontractor,improve EPC contractor rational level.