ArticlePDF Available

Analysis of Improper Material Management Affecting Cost in Construction Projects

Authors:

Abstract

The paper aims to fill a void created by the absence of proper materials management on construction sites. Research has shown that construction materials accounts for 50-60% of the total cost in construction projects. For a productive and cost efficiency, material management is very essential. Material mismanagement decrease the contractor's profit leading to huge losses, and leaving the project in big troubles, therefore the proper management of this single largest component can improve the productivity and cost efficiency of a project and help ensure its timely completion. The existing construction material management practices of contracting companies are investigated in this paper. The study was exclusively assessed through questionnaire survey, interviews, field visits and discussion with the concerned authorities. 26 factors were selected for the proper assessment of most critical factors. The factors are ranked according to the degree of significance as assessed by the respondents. The results obtained from the ranking factors shows that the top five major's causes of cost overruns are: design issues, market condition, store issues, contractor issues and external issues. Recommendations are given for reducing the material mismanagement in the construction industry.
A preview of the PDF is not available
... Even though, there are many evidence that show benefits that industries such as manufacturing and retailing had gained from effectively managing supply chain coordination, there is however limited evidence of its success and its impact in construction industry (Othman, 2011). Furthermore, Lenin et al. (2014) carried out a study on improper material management affecting cost in construction projects in India and his study Findings revealed that the top five major causes of cost overruns were design issues, market condition, store issues, contractor issues, and external issues. Their Recommendations were given for reducing material mismanagement in the construction industry thus leaving behind the effects of material mismanagement and the industry need to obtain a great operational performance, avoid waste and select proper resources. ...
... Findings revealed that there was significant increase in organizational performance as a result of the use of inventory control system. Lenin, Krishmaraj, Prasad and Kumar (2014) carried out a study on improper material management affecting cost in construction projects in India. Findings revealed that the top five major causes of cost overruns were: design issues, market condition, store issues, contractor issues, and external issues. ...
Article
Full-text available
This study sought to establish the influence of acquisition of materials on performance of road construction projects in Kenya: A case of Nairobi County. The objective of the study was to establish the extent to which acquisition of materials influences performance of road construction projects in Kenya. This study was anchored on the theory of controlling, theory of construction management, and stakeholder theory. The paradigm used was pragmatism and the research approach used was mixed methods. Cross sectional descriptive survey and correlational research design were used. The sample size was 74 senior engineers which comprised 30 senior engineers from consulting engineering firms and 44 senior engineers from construction companies; 74 managing directors which comprised 30 managing directors from consulting engineering firms and 44 managing directors from construction companies. A five point Likert type scale questionnaire was used to collect quantitative data while interview guides were used to collect qualitative data. The statistical tools of analysis that were used for descriptive data were frequencies, percentages, arithmetic mean and standard deviation while the statistical tools that were used for inferential statistics were Pearson’s Product Moment Correlation and Linear Regression. The Fisher (F) test was used to test the hypotheses. The results indicated that with R²=0.246, F(6,40)=2.173, p=0.066>0.05, H1 was rejected and it was concluded that acquisition of materials had no statistically significant influence on the performance of road construction projects. However, establishment of quantities of materials required had a statistically significant influence on the performance of road construction projects. The study recommends that organizations that deal with road construction should have appropriate policies on establishment of quantities of materials required.
Article
Full-text available
Materials management function is always a major concern to the management of any industrial organisation as high inventory and an inefficient procurement process affect the profitability to a great extent. Problems multiply due to a very current business environment in India. Hence, existing materials planning and procurement processws and inventory management systems require a re-look with respect to a changing business environment. This study shows a radical improvement in materials management function of an Indian petroleum refinery through business process re-engineering (BPR) by analysing current processes, identifying key issues, deriving paradigm shifts and developing re-engineered processes through customer value analysis. BPR has been carried out on existing processes of “materials planning and procurement” and “warehousing and surplus disposal”. The re-engineered processes for materials management function trigger a few improvement projects that were identified by the group of executives who took part in the re-engineering exercise. Those projects were implemented in an integrated framework with the application of the state of art information technology tools.
Article
Full-text available
Over the past decade, the traditional purchasing and logistics functions have evolved into a broader strategic approach to materials and distribution management known as supply chain management. This research reviews the literature base and development of supply chain management from two separate paths that eventually merged into the modern era of a holistic and strategic approach to operations, materials and logistics management. In addition, this article attempts to clearly describe supply chain management since the literature is replete with buzzwords that address elements or stages of this new management philosophy. This article also discusses various supply chain management strategies and the conditions conducive to supply chain management.
Article
Full-text available
Current, manual, materials management and control procedures are unsatisfactory: they are labour intensive, inaccurate and error prone. The result is waste and surplus of materials, delays, decrease in productivity and lack of up-to-date, real-time information regarding the status of purchase orders (PO), the levels of inventory, the actual vs. planned usage of materials, and others. The purpose of the present work was to develop an automated model, which alleviates some of these problems. Prior to developing the model, a field survey was conducted to learn, at first hand, what the typical problems with materials management and control are. The model initiates materials purchasing, follows up the status of PO, records materials data as they arrive to the site and their movement around the site, makes recommendations, generates reports and issues warnings. The model was implemented, tested and evaluated in an ongoing building construction project. The onsite experiments confirmed that automated materials management and control are feasible, resulting in real benefits, such as time savings, and availability of up-to-date and accurate information regarding stocks of materials on site.
Article
Construction productivity is rarely analysed in Iran. If productivity is to improve, current weaknesses must be identified. To this end data were collected through a structured questionnaire survey. By utilizing the relative index ranking technique, the identified problems were prioritized for detailed analysis and discussion. Results indicate that the five highest-ranking problems are: Materials shortage, weather and site conditions, equipment breakdown, drawing deficiencies/change orders, and lack of proper tools and equipment. Devastating war with neighbouring Iraq has led to a boom in construction activities leading to shortages of construction materials. The casual employment of the majority of construction operatives and poor managerial skills are the significant contributors to low productivity on Iranian construction sites.
Article
Materials constitute a huge proportion of the cost of construction. Materials are sometimes ordered weeks or even months ahead of requirement leading to uneconomical inventory on construction sites or contractors' warehouses. Building material inventory represents cost to procure, cost to store and insure, cost to guard against theft and cost incurred when inventory becomes obsolete. This paper presents an overview of the Just-in-Time (JIT) production system and discusses application and implementation issues for the control of material inventory in building construction. JIT ensures that suppliers deliver directly to the production floor to achieve either a reduction in inventory or zero inventory and consequently a reduction in production costs. Implementation of JIT building material management in construction has the potential to realize the same far reaching benefits experienced in manufacturing. Relevant factors to consider in JIT implementation for material inventory management in construction are implications for construction output and quantities, production planning, design planning, construction contractor and suppliers' relationships, material sourcing, and education and training.
Article
Many management-related problems exist amongst local contractors in developing countries. Problems vary in nature and intensity but are usually associated with inefficient management of construction resources including materials, labour, plant and subcontractors. This paper deals with material management practices in the construction industry in Malaysia. A questionnaire survey and interviews were conducted with local practising public works contractors to examine the management of materials and to identify the nature of problems associated with material management. Problems identified included delay in the delivery of materials, the lack of use of advanced planning techniques, material variances and computers. There is a need for an improved material management approach by contractors in a developing country.
Article
This paper examines the relationships between construction planning efforts and construction planning effectiveness. The influence of the project's environment and organizational characteristics of construction firms on planning efforts and planning effectiveness is also investigated. A sample of 26 building projects was studied and the results were analysed using simple correlations. Three factors were found to have a significant effect on improving construction planning effectiveness: increases in planning time prior to commencement of work on site, the extent to which emphasis is placed on the determination of construction methods during construction planning and the frequency of revision of construction plans after commencement of work on site. Significant relationships were also found between project environment variables and organizational characteristics of construction firms and planning efforts and planning effectiveness. Implications of the results are that construction planners should systematically evaluate alternative plans, sufficient time should be allowed for proper planning, thorough reviews are needed whilst work is in progress, the planning effort needs to be relevant to the environmental context of the project and the firm should be appropriately organized. Suggestions are given for future research studies.
It is acknowledged that construction activity has major impacts on the environment. Moreover, the construction process is usually fragmented, and involves several parties with different objectives. Thus, often, none of them normally assumes direct responsibility for protecting the environment. The concept of supply chain management (SCM) is now commonly applied in business for the mutual benefit of enterprises in the supply chain (from the organization extracting the basic raw material to the final customer). A basic principle of SCM is “integration”. However, SCM is not well known in the construction industry. This paper considers the potential of applying SCM to integrate the construction process in Singapore, and thereby, address its pressing problems including its poor environmental performance. It is found that SCM can help to green the construction supply chain in Singapore. Some recommendations on how awareness of SCM can be enhanced, and its application by construction enterprises made most likely to succeed are offered.
Article
It has been noted that many problems exist among local construction contractors owing to inefficient materials management. Problems reported include delays in the supply of construction materials, and inappropriate scheduling of materials in construction projects. There is a need for an improved materials planning approach. Efficient planning of materials not only means increased productivity and profit to the company, but also facilitates the completion of construction projects. In view of the variation in size, timing and frequency of material orders, the authors felt that the implementation of a materials planning system (MPS) in construction would produce cost savings similar to those achieved in the manufacturing industry. However, an economic evaluation of a construction MPS would probably involve the treatment of uncertain costs and savings. A practical risk analysis based on converting subjective estimates of timing and magnitude of cash flows to beta distributions was used to illustrate the feasibility of implementing such a system in construction.
Automatic Data Identification: For your own good
  • T Andel
Andel,T.(1993) "Automatic Data Identification: For your own good." Transportation and Distribution. 34 (10). pp.76-88.