Power of Material Management in Construction Companies
- September 8, 2014
- Posted by: cemblog
- Category: Construction
As we all know, Construction industry is one among the top list of industrial sectors that is prone to numerous challenges. A Construction Management Company can be successful only if it has the supremacy to meet both its time and budget goals. Meeting these goals all at once is hard in reality.
A construction project management hinges on placing the right people, having the right skills with the right equipment needed to meet the time and budget requirements. Equally important is the other factor of having the right material, at the right time in the required place. Materials used in the construction management company cover around 45% to 70% in the total cost of the project. An effective Material Management can pave way to ensure the availability of materials and thus the success of Construction Management Company. Material management is the process of planning & controlling the purchase & supply of the right quantity and quality of materials required for the construction project in a timely fashion.
Functions of Material Management:
Materials planning, purchasing, procuring, inventory control, distribution, good supplier & customer relationship, quality assurance are the objectives of material handling department in any construction management company. To achieve these objectives, the functions of the material management department can be categorized as primary and secondary functions.
Primary functions include material requirements planning (MRP), purchasing, inventory planning and control, quality control, and maintaining flow of materials. Secondary functions include making make or buy decisions, standardization or simplification of processes, coding of materials, classification of materials and forecasting future needs.
Material management challenges:
Few of the most common errors and issues occurring in material management in an organization are listed below.
Ordering in Excess – Cash flow is the key aspect in running a construction management company. Ordering and storing excess material might tie up the cash flow and also incur interest charges for the business.
Unavailability of storage space – When products are purchased in excess volume, lack of storage space results in loss of materials due to damage and theft.
Unorganized storage – This leads to wastage of labor efforts and time, searching the materials when needed.
Wrong quality or type of materials – Purchase and storage of the wrong quality of material, results in re-work demanding labor force efforts and time.
Not ordering on time – Inadequate training in handling materials and not keeping track of the material used, leads to miss out on ordering the materials. This in turn leads to delay in supply and thus a delay in project delivery.
Double handling of material – This occurs as a result of inadequate materials when required. The process not only involves wastage of time and thus a delay in delivery of the project, but also plays a vital role in the extending the budget due to surplus transmission of materials.
Construction project management software
Using efficient construction project management software, you can overcome the above issues. One of the important modules in such construction project management system is the material or inventory management.
Efficient construction project management software assists the overall cycle of material management. The phases of the material management process include:
- Material identification – Identifying the right type, quantity and quality of material required.
- Vendor selection – Selecting a suitable vendor as per the material requirement and cost constraints.
- Procurement – Preparing & processing of demand and end receipt, and approval of payment.
- Construction phase – Planning efficient transfer of materials so that the availability is assured as and when required.
Advantages of Material Management Software:
- Coding and classification of materials for easy identification
- Easy management of vendor bids
- Standardization of purchasing process
- Availability of detailed reports
- Reduction in overall cost
The key success factor of a construction management organization is the consistency and control over the availability of materials and tools, by assessing the future demand and delivery delay. This ensures an uninterrupted flow in the organization’s process, thus meeting the time and budget goals.
Choose the right construction management software with an efficient material management module to gain competitive advantage.