Effective Materials Management in Construction Projects

Purnima Bajpai, Project Coordinator, Rajdarbar Realty Pvt Ltd

While materials count for a considerable amount of construction costs, the way materials are managed seems to be improvised rather than approached methodically. In the construction industry, one of the common challenges people face is issues with their inventory and onsite material management. Management of materials have over the years been a great problem to most firms in the construction industry. In construction project operations, there is always a tendency of mismanagement of materials by construction firms. As the size of the contract increases, so does the scale of activities on materials management. Changing procedures, installing and using new information technology and elevating managerial practices to the point where decision models are in everyday use have been known to be stressful to organizations that pursue such improvements. In many cases, the inability of the organization to embrace such changes dooms the improvement initiatives.

Purpose of Material Management
  • To gain economy in purchasing
  • To satisfy demand during period of replenishment
  • To carry reserve stock to avoid stock out
  • To stabilize fluctuations in consumption
  • To provide a reasonable level of client services
Four Basic Needs of Material Management
  1. To have adequate materials on hand when needed
  2. To pay the lowest possible prices, consistent with quality and value requirement for purchased materials
  3. To minimize inventory investment
  4. To operate efficiently
The most common steps involved in effective materials management have been elaborated below:
Bid procurement

It is common for the scope of a project to change while it is coming together, which means the bidding process can be affected. A good example of this is if the property owner decides they want to change the materials to something with higher quality, without the overall budget of the project being changed. The general contractor will usually agree to this and then work with their onsite specialty contractors, like the electrical contractors, to determine what accommodations can be made and how to make them. The electrical contractor is usually one of the last contractors to be brought into the project, and if all of the details of the project have already been determined before they are brought it, they may be asked to lower their bid to accommodate the situation.

Site Materials Management

This situation can be avoided by simply maintaining communication and involvement among all of the contractors throughout the project. Bringing in all the contractors in the beginning, including the electrical contractor, will help to avoid this problem. The contractors can all provide more realistic costs and timelines to the owner, and they will be able to help the general contractor determine what accommodations can truly be made to the project in order to make the changes the owner is wanting. Figure 1 below represents the ideal procurement cycle for a typical construction project.

Material purchasing
In general, material purchasing falls into two categories:
  1. Major Materials: materials that are specific to the project, and include things like switchgears, lighting fixtures, and alarm systems
  2. Miscellaneous Materials and Commodities: off-the-shelf items like cables, fittings, conduits, ties, and straps.
The purchasing process can often involve negotiating with manufacturers over the price and quantity, which can be a long process sometimes. The person in charge of purchasing materials needs to work out a schedule for when the materials arrive, to ensure they are there when needed. The miscellaneous materials are generally purchased through a distributor, in either a blanket purchase or based on a bidding process; though blanket purchases are not as common, due to the competitive market. These materials are easier for the contractor to acquire on shorter notice, so waiting until later in the building process may not hold up your construction. The major materials need time to be fabricated specifically for this job, so they need some time to be put together. Waiting too long to order these can lead to major delays in the construction process. The manufacturer can be short on supplies or need a longer amount of time to finish fabricating everything.

Many contractors will order materials daily as needed, collecting the lists that each area needs for the next day. The problem with this is that the materials may not be there before the workers arrive in the morning, so they may be stuck waiting for part of the day until the order arrives on site. A simple solution to this is to determine what will be needed in advance, then scheduling everything to arrive a day before it is actually needed. Many distributors are willing to work with you to break up the project into a schedule of shipments based on what is needed when.

Ideal Procurement CycleFigure 1: Ideal procurement cycle for a typical construction project
Another solution that many people are turning to is purchasing a prefabricated steel building kit. These kits come with everything you need for your building and allow you to get your building up in half the time it takes to construct a building out of traditional materials. They are also just as customizable as a building made from traditional materials. Since the kit comes with what you need, you will not need to worry about construction being held up by waiting for something to be delivered.

Material procurement

After your supplier has been selected and your materials ordered comes the waiting process. Your contractor will have to develop a system for receiving and tracking your materials as they begin to arrive. Many companies do this by creating a material requisition schedule that specifies the different materials and quantities for each of them, along with the set dates they should all arrive. To avoid having a surplus of materials, many contractors will only order 80 percent of what is estimated as needed for the project, then order the rest when it is closer to completion, when they have a better idea on what is needed.

Customarily, materials will be delivered directly to the job site, but sometimes it is not feasible due to storage limitations; in these cases, the material is sent to the contractor’s warehouse or other storage location. However, if something is not needed right away, it may also be stored in the warehouse instead of onsite for space or security reasons. Sending everything to a warehouse is also common if the contractor is planning on having everything prefabricated before bringing it to the job site. Once you have determined when and where everything is supposed to be delivered, things may become complicated, and you can end up with delays, storage problems, unexpected costs, and more. Some of the complications you may encounter include:
  • A miscommunication may lead to materials not arriving at the time needed
  • Delivering a material to the wrong location, for instance, sending it to the job site instead of the warehouse, or vice versa
  • Receiving the wrong quantity. Too many materials can lead to storage problems, while not getting enough can lead to being held up. Waiting for an important material that holds up construction work until it arrives
There are several ways you can avoid such problems from popping up in your project. The best way is to make sure that everything is clearly written down before it is submitted. Keeping communication with your suppliers will also help to avoid these pitfalls. Working with trusted suppliers is also key to making sure everything runs smoothly. Sometimes you may pay a little more for your materials, but in the end, it is worth it if it helps to make sure your project runs smoothly.

Points to be Considered While Purchasing Materials
  • Proper specification
  • Invite quotations from reputed firms
  • Comparison of offers based on basic price, freight & insurance, taxes and levies
  • Quantity & payment discounts
  • Payment terms
  • Delivery period, guarantee
  • Vendor reputation (reliability, technical capabilities, convenience, availability, after-sales service, sales assistance)
  • Short listing for better negotiation terms
  • Seek order acknowledgement
Storage and inventory management

Material tracking, inventory, and storage often lead to challenges on the job site. If there are too many people involved in the process, a simple miscommunication can lead to materials being misplaced, causing things to be held up or reordered. Keeping track of your materials is a huge challenge in construction, especially if it is a large job. A good tracking system is also important for helping minimize theft and loss, and it will help you find something quickly and easily. An easy solution is to implement an electronic tracking system. Automated systems with bar codes are popular, as you only have to scan something to mark that it has been received or removed from the site. It also gives a logical way to organize your inventory, so you know exactly which shelf something is on. There are many types of electronic systems and you can determine which one is the best fit for you. Some systems can even be set up to automatically order something for you when your inventory gets low or you run out of it.

Functions of Inventory Control
  • To provide maximum supply service, consistent with maximum efficiency & optimum investment.
  • To provide a cushion between forecasted & actual demand for a material
Your tracking system should also be able to record damaged materials separately from the current inventory. This part of tracking can also help you determine if there is an issue with where something is being stored or whether the way it is being moved is problematic. Rehandling inventory as it is moved from storage to the job site is another area where there can be issues in material management. Things can get lost or damaged if they are not handled properly, which can create difficulties in the project. Using onsite storage instead of a warehouse will help reduce the risks, but you still need to be vigilant no matter how you are storing things. Your tracking system will also help avoid losses when something is being moved.

Keep in mind that every job will have different needs for its material management, you will need to make some adjustments for each project. But, if you have a solid system in place, you will have to make only slight changes from project to project. There are countless systems that will help you manage your materials more efficiently, and help you avoid losses and damage; you just need to find the right one that works for your company.

Points to be Considered for Effective Storage of Materials
  • Stores must be of adequate space
  • Materials must be stored in an appropriate place and in a correct way
  • Group-wise & alphabetical arrangement helps in quick identification & retrieval
  • First-in, first-out principle to be followed
  • Monitor expiry date
  • Follow two bin or double shelf system, to avoid stock outs
  • Reserve bin should contain stock that will cover lead time and a small safety stock
Setting up a Materials Management System
  1. Assign unique project number schemas in the event multiple projects are being managed
  2. Defined part number catalogues must be used for managing tagged equipment, sub-components, commodities and bulk material to ensure that resource names in the MMS system match construction drawings
  3. Material descriptions, unit of measure and material classifications must be descriptive and accurate to ensure all material can be found quickly and efficiently
  4. Project controls cost coding structure must be in place at the beginning of the project to avoid confusion later on in the project
  5. Construction Work Packages must be finalized prior to the start of construction
  6. Material storage locations must be clearly defined and marked (warehouses, laydown yards, module yards, field and vendor shops)
  7. Key shipping dates must be accurate to ensure proper equipment is available to off-load material
  8. Quality requirements, hold points, inspections, and certifications must be tracked digitally
  9. Preservation requirements and record keeping must be kept up to date
  10. Logistics requirements and documen- tation should be readily available
  11. Material acceptance and release from storage forms and processes must be followed
  12. Implementing site materials manage- ment processes and procedures for inventory counts and receiving
  13. Automating Integration with Project ERP and Engineering systems will ensure proper data integrity in the System
Conclusion

Material management is an important management tool for getting the right quality and quantity of supplies at the right time. A good inventory control and sound methods of condemnation and disposal will improve the efficiency of the organization and also make the working atmosphere healthy in any type of organization, whether private, government, small or big organization, and household. Everyone should know the basics of material management so that he/she can get the best of available resources and adopt the principles of material management in all the daily activities.

NBM&CW July 2019

Click Here
To Know More / Contact The Manufacturer
Please provide your details we will contact you as soon as possible
Please let us know your name.
Invalid Input
Please let us know your Designation.
Invalid Input
Please let us know your City.
Please let us know your State.
Please let us know your Country.
Please let us know your Contact Number.
Please let us know your email address.
Please brief your query.

Sustainable Operations Management of High-Rise Project

With an ambition of providing housing for all citizens in India, the drive towards resource efficiency building operations is all-time high given the constraints in allocation of resources and their utilization, writes Mamta Rawat of Conserve Read More ...

Benefits of Project Management in Developing India’s Infrastructure

During the past couple of years, India has enjoyed the privilege of being amongst the most favored investment destinations of the world. With the sharp vision of Prime Minister Narendra Modi and compelling Read More ...

Arbitration and Conciliation (Amendment) Ordinance 2015 Provisions & Legal Issues

In a significant development for Indian arbitration law, the President of India has formally adopted the Arbitration and Conciliation (Amendment) Ordinance 2015 (the "Ordinance"), which will bring about major and long-awaited reforms to arbitration in India. The Ordinance amends Arbitration and Conciliation Act 1996 and seeks in particular to eliminate Read More ...

Redefining India – Accelerating Infrastructure Projects Through Project Management

Raj Kalady
In the last two decades, India has emerged as one of the fastest-growing economies in the world. According to a Citi group report, following the reforms undertaken by Government of India, the GDP is Read More ...

A Study of Constructability Issues Related to Various Stages of Design and Construction Process

The increasing levels of competition and the introduction of manufacturing concepts within the industry led to specialization. Such specialization led to the separation of design and construction facilities. The increasing complexity of many projects makes it more and more difficult for the designers to be fully aware of all the implications of their Read More ...

Model for Processing Construction Claims

Construction Claims
With growing standards, advanced technologies, and owner-desired additions and changes, construction projects are becoming more and more complex, while the successful completion of projects has been thought to depend mainly Read More ...

Obligations of Parties & Provisions of Claims in Modern Construction Contracts

Construction contracts usually contain notice-of-claim provisions. The contractor must, within a stated period of time, notify the project owner in writing of any occurrence which may give rise to a claim for additional compensation under the contract. The policy behind these requirements is sound. Owners should have the opportunity to respond to Read More ...

Termination of Contract Under Old FIDIC

Termination of Contract
Most commercial construction contracts include provisions allowing either party to terminate a contract for cause (also referred to as a termination for "default"). Unlike terminations for convenience, Read More ...

Position of Engineer & Independent Engineer In Standard Forms of Contracts

The engineer is generally responsible for issuing the completion certificates and supervising any tests that have been contractually agreed as well as establishing that payments to the Contractor can be made, in funded Read More ...

Study on Project Schedule and Cost Overruns - Expedite Infrastructure Projects

The KPMG in India – Project Management Institute (PMI) study was initiated on the request of MoSPI, which highlights the major reasons for schedule and cost overruns across major sector's infrastructure Read More ...

PPP Audit of Infra Project - Importance and Implication

Purnima Bajpai, Reliance Infrastructure, Pune.A contentious issue in the context of PPP arrangements and their audit relates to the scope of audit by Supreme Audit Institutions (SAI), in Read More ...

Modern Data Collection Techniques for Management of Road Assets

It is now well established that decision on maintenance, rehabilitation and upgradation/ improvement measures needs to be based on an objective assessment (with an analytical approach) to Read More ...

Management of Quality Quantity and Speed

Management is the need of today. Management has been included in various specialised fields now like environment, tourism, hotel, information technology etc. apart from traditional courses like finance, human resource, operation and marketing. In the management concept, management sets the goals based on quantities for individuals and performance Read More ...

An Innovative Tool to Teach and Train

The world is expanding and indeed expanding at a breath neck pace, Expansion of our world requires construction of new Industries and Production process from commissioned industries. No Read More ...

Infrastructure Projects Through Project Management

India is only second among the emerging economies next to China. With an average GDP rate of 7.5% and upside, the demand to improvise infrastructure is magnanimous. The average spending capacity Read More ...

Safety Planning and Administration

Theoretically Safety means the absence of danger at work which is made possible by eliminating hazards that create danger. ILO, in one of their documents, state "A thing is provisionally categorized as safe if the risks are deemed known, and in the light of that knowledge, judged to be acceptable. However, generally, safety is adjudged in terms of an Read More ...
NBM&CW

New Building Material & Construction World

New Building Material & Construction World
MGS Architecture

Modern Green Structures & Architecture

Modern Green Structures & Architecture
L&ST

Lifting & Specialized Transport

Lifting & Specialized Transport
II&TW

Indian Infrastructure & Tenders Week

Indian Infrastructure & Tenders Week