Minimising logistic cost of construction materials in the construction industry: Contractor's perspective

Abstract

Construction projects involve major resource consumption, particularly in materials which can account for up to 60% of the total construction cost. Construction logistics is the integration and collaboration of several activities to plan, execute, and control the flow of physical objects from their point of origin to their point of consumption. While logistics plays a significant role in minimising material costs, the construction industry tends to pay less attention to logistic cost minimisation. This paper aims to identify construction logistic cost components and propose strategies to minimise these components on construction material cost from a contractor's perspective. Accordingly, the literature review highlighted the significance of construction materials as a resource for construction projects and the importance of material costs in total construction costs. Moreover, semi-structured expert interviews were conducted with twelve (12) experts involved in construction logistics to gather data. Both on-site and off-site experts were included in the sample. Manual content analysis was used to analyse the collected data due to its flexibility and adaptability for small sample sizes. Thirteen (13) strategies were proposed to minimise construction logistic costs on material costs, including proper knowledge of the logistic process and its cost components and implementing proper logistic cost minimisation strategies through coordination and collaboration between the head office and the site. The findings of this study are expected to contribute to the construction industry's better understanding of the importance of logistic cost minimisation strategies and their potential benefits.

Full text

Jayaruwan, S.M.R., Jayasena, H.S. and Weerapperuma, U.S., 2023. Minimising logistic cost of
construction materials in the construction industry: Contractor's perspective. In: Sandanayake, Y.G.,
Waidyasekara, K.G.A.S., Ramachandra, T. and Ranadewa, K.A.T.O. (eds). Proceedings of the 11th World
Construction Symposium, 21-22 July 2023, Sri Lanka. [Online]. pp. 808-820. DOI:
https://doi.org/10.31705/WCS.2023.65. Available from: https://ciobwcs.com/papers/
808
MINIMISING LOGISTIC COST OF
CONSTRUCTION MATERIALS IN THE
CONSTRUCTION INDUSTRY:
CONTRACTOR'S PERSPECTIVE
S.M.R. Jayaruwan
1
, H.S. Jayasena
2
and U.S. Weerapperuma
3
ABSTRACT
Construction projects involve major resource consumption, particularly in materials
which can account for up to 60% of the total construction cost. Construction logistics is
the integration and collaboration of several activities to plan, execute, and control the
flow of physical objects from their point of origin to their point of consumption. While
logistics plays a significant role in minimising material costs, the construction industry
tends to pay less attention to logistic cost minimisation. This paper aims to identify
construction logistic cost components and propose strategies to minimise these
components on construction material cost from a contractor's perspective. Accordingly,
the literature review highlighted the significance of construction materials as a resource
for construction projects and the importance of material costs in total construction costs.
Moreover, semi-structured expert interviews were conducted with twelve (12) experts
involved in construction logistics to gather data. Both on-site and off-site experts were
included in the sample. Manual content analysis was used to analyse the collected data
due to its flexibility and adaptability for small sample sizes. Thirteen (13) strategies were
proposed to minimise construction logistic costs on material costs, including proper
knowledge of the logistic process and its cost components and implementing proper
logistic cost minimisation strategies through coordination and collaboration between
the head office and the site. The findings of this study are expected to contribute to the
construction industry's better understanding of the importance of logistic cost
minimisation strategies and their potential benefits.
Keywords: Construction Logistics; Construction Materials; Logistic Cost (LC); Logistic
Cost Minimisation.
1. INTRODUCTION
Construction is the second highest industry after agriculture, with colossal resource
consumption (Raja & Murali, 2020). Construction projects consume significant resources
such as labour, material, machinery, and equipment in permanent and temporary works.
However, materials around 50-60% take a high percentage, and their impact will be 80%
1
Undergraduate, Department of Building Economics, University of Moratuwa, Sri Lanka,
rasanjanajayaruwan@gmail.com
2
Senior Lecturer, Department of Building Economics, University of Moratuwa, Sri Lanka,
suranaga@uom.lk
3
Temporary Lecturer, Department of Building Economics, University of Moratuwa, Sri Lanka,
umeshas@uom.lk

Minimising logistic cost of construction materials in the construction industry: Contractor's perspective
Proceedings The 11th World Construction Symposium | July 2023 809
of the project budget (Caldas et al., 2015). In some underdeveloped nations, material
expenditures might account for 60-65% of the total construction cost (Tserng et al., 2006).
Furthermore, a loss of 30% of labour productivity could result from a lack of materials at
the time they are required (Caldas et al., 2015). Material management is a necessary
process that needs to be controlled conscientiously. When it explores the contractors'
perspective, it is essential to manage construction materials well to prevent cost overruns.
Therefore, it is likely that the cost of materials would be increased excessively if careful
planning, management, and controlling of the utilisation of construction materials were
not exercised (Fang & Ng, 2011). As a definition, a flow of physical objects from their
point of origin to their point of consumption can be planned, executed, and controlled
through the integration and collaboration of several activities known as logistics
(Benotmane et al., 2018). Construction logistics support acquiring, storing, and
transporting materials, labourers, and other resources needed throughout the construction
process (Miashkova, 2022). It involves more than just controlling the flow of information
and materials; it also entails providing quality, ensuring safety, and creating an
environment that makes construction activities easier (Guffond & Leconte, 2000).
The significance of logistic construction cost is 20-30% of the material cost (Fang & Ng,
2011). Inadequate logistic process planning may cause material shortages that delay the
project schedule simultaneously, and it will drive indirect costs such as material price
fluctuations, penalty costs, loss of discounts, and so on (Tserng et al., 2006). Fang and
Ng (2011) mentioned that transportation, storage, and procurement are major logistic cost
components, which acquire a significant proportion of the material cost. Aljohani (2017)
identified material cost overrun as a critical factor directly impacting project cost
overruns. Nevertheless, the construction industry pays less attention to logistic cost
minimisation even though it is a significant component of material cost (Raja & Murali,
2020). Since the material acquisition process involves both supplier and the contractor,
there are suppliers' and contractors' side logistic activities. However, this study focuses
on logistic cost minimisation from the contractors' perspective because the contractors
bear most of the logistic cost components of the material logistic process (Fang & Ng,
2011). As a result, this paper aims to identify the construction logistic cost components
and propose strategies to minimise those logistics cost components on construction
material cost. Consequently, this study presents an adopted logistic planning model for
cost minimisation.
2. RESEARCH METHODOLOGY
According to Chalakkal (2021), the research approach is an action to examine a research
problem and justify using methods or strategies. Borrego et al. (2009) have stated that
there are three research approaches which are quantitative, qualitative, and mixed
methods. In qualitative research, textual data is gathered and analysed via surveys,
interviews, focus groups, conversational analysis, observation, and ethnographies (Olds
et al., 2005). Qualitative research allows for the development of details through deep
involvement in experience, and the qualitative approach enables the researcher to be
highly involved in the scenario to collect data (Creswell, 2014). For this study, it is
required to collect data regarding the material logistic process at a typical construction
site, logistics in the construction industry, logistic cost calculation, and logistic cost
minimisation, which are subjective.

S.M.R. Jayaruwan, H.S. Jayasena and U.S. Weerapperuma
Proceedings The 11th World Construction Symposium | July 2023 810
Moreover, the required data, such as subjective perceptions, opinions, and emotions, is
difficult to quantify. Therefore, the qualitative approach is more suitable for this study.
The semi-structured expert interview was selected as the data collection method since
interviews are considered one of the best data collection techniques as it goes up to the
depth of opinion of the interviewees (Punch & Oancea, 2014). Gathering data would be
more applicable because the required data is highly dependent on professional experience,
opinions, and beliefs. Table 1 shows the profile of selected respondents.
Table 1: Experts' profiles
Detail
Profession
Designation
Experience in
the industry
Expert 1
Quantity Surveyor
General Manager in Estimate and Contracts
16 years
Expert 2
Quantity Surveyor
General Manager in Estimate and Contracts
15 years
Expert 3
Quantity Surveyor
Head of Procurement Division
11 years
Expert 4
Quantity Surveyor
Procurement Manager
10 years
Expert 5
Quantity Surveyor
Chief Quantity Surveyor
26 years
Expert 6
Quantity Surveyor
Chief Quantity Surveyor
25 years
Expert 7
Quantity Surveyor
Site Quantity Surveyor
5 years
Expert 8
Quantity Surveyor
Site Quantity Surveyor
7 years
Expert 9
Quantity Surveyor
Site Quantity Surveyor
7 years
Expert 10
Engineer
Project Manager
10 years
Expert 11
Engineer
Project Manager
15 years
Expert 12
Engineer
Site Engineer
12 years
Twelve experts with relevant experience in construction logistics and who are involved
in the material logistics process were selected. Both head office and site-level experts
were included among these experts to address on-site and off-site logistics consequences.
On completion of twelve interviews, data saturation was found because no new
interpretations were arising for latest three interviews. The interviewees were
systematically queried regarding multiple dimensions related to the research objectives,
including the significance of LC, the level of awareness among industry professionals
regarding logistics, the processes involved in material logistics, the key components
contributing to logistics costs, and potential strategies to mitigate these costs. The
collected data were analysed using the manual content analysis method, where the
researcher carefully goes over and classifies text-based data, such as written documents,
interview transcripts, or focus group transcripts (Elo & Kyngäs, 2008). Since manual
content analysis is more flexible and adaptable and can be used for analysing small
samples of data in depth (Krippendorff,2019), it was selected as the data analysing
method.
3. LOGISTICS IN THE CONSTRUCTION INDUSTRY
When it matches the concept of logistics to construction firms, construction logistics can
be defined as the process of delivering materials and resources required at a construction
site in a productive way (Ghanem et al., 2018). Voigtmann and Bargstadt (2010)
mentioned that planning, coordinating, and monitoring the movement of construction
materials within the construction site are all parts of construction logistics. According to

Minimising logistic cost of construction materials in the construction industry: Contractor's perspective
Proceedings The 11th World Construction Symposium | July 2023 811
previous studies, construction logistics can be divided into off-site and on-site material
logistics.
3.1 ON-SITE LOGISTICS
The technique of allocating places for resource delivery, storage, and handling to
minimise site congestion and extra material movement so that inefficiencies are kept to a
minimum is known as on-site logistics (Thomas et al., 2005). In the construction industry,
when materials arrive at the working site, it does not mean materials have reached their
destination. Because still, crews at the site need to transport, store at the on-site
warehouse, and install in the right place - these steps in site call on-site logistics (Ghanem
et al., 2018). Wang et al. (2014) also highlighted that construction logistics present two
potential areas for performance improvement, and the first step is to address the logistical
issues at the construction site. Moreover, rearranging site logistics can result in significant
improvements (Sundquist et al., 2018).
3.2 OFF-SITE LOGISTICS
Off-site construction logistics is a component of supply chain management in which
numerous businesses collaborate to create a network of interconnected procedures to
move goods, services, cash, and information efficiently to lower overall costs, shorten
overall lead times, and increase overall profits while putting the needs of the customer
above all other considerations (Hamzeh et al., 2007). Main contractors are supplied goods
and services from sub-contractors and suppliers, and then those activities consider off-
site logistics. This is also called supply logistics which involves construction material
suppliers (Ekeskär & Rudberg, 2016). Fellows and Liu (2012) argued that supply logistics
(off-site logistics) is more complex because it involves more construction processes. For
efficient resource and material flow management, cooperation and coordination between
supply chain participants and the utilisation of off-site logistics are other steps that should
be considered (Brusselaers et al., 2022).
4. MATERIAL LOGISTIC PROCESS AT CONSTRUCTION
SITE
According to Fang and Ng (2011), a logistic process in a construction site is a sum of all
logistic activities involving material acquisition from suppliers to transporting to the
construction site. According to Jang et al. (2003), major logistic activities are
procurement, transportation, storing, and handling. The material acquisition process
involves both supplier and the contractor; there are suppliers' and contractors' side logistic
activities. Since this study focuses on logistic cost minimisation from a contractor's
perspective, it would only consider contractors' side logistic activities. Accordingly,
Figure 1 illustrates how those major logistic activities are ascertained in a construction
site.

S.M.R. Jayaruwan, H.S. Jayasena and U.S. Weerapperuma
Proceedings The 11th World Construction Symposium | July 2023 812
Figure 1: Material logistic process at a typical construction site
5. BASIC CONSTRUCTION LOGISTIC COST ELEMENT
Fang and Ng (2011) proposed Activity Based Cost (ABC) method to quantify the total
logistic cost, which is a method for identifying cost components, determining the costs
associated with each activity, and assigning those costs to cost objects, such as labour,
materials, equipment, facilities, property, and capital. According to Fang and Ng (2011),
the cost of each logistic activity is identified as a logistic cost element. Sobotka and
Czarnowski (2005) presented a similar concept. Generally, the supplier bears the storage
costs at the supplier's yard and transportation costs to the intermediate warehouse. The
contractor absorbs the storage cost on site and intermediate warehouse, material handling
(loading/unloading), other transport costs between the construction site, on-site
transportation, and procurement cost (Fang & Ng, 2011).
Enter Construction logistic process.
Material arriving to the site.
Leave construction logistic process.
OFF SITE LOGISTICS
ON SITE LOGISTICS
SUPPLIERS SIDE LOGISTIC
CONTRACTORS SIDE LOGISTICS

Minimising logistic cost of construction materials in the construction industry: Contractor's perspective
Proceedings The 11th World Construction Symposium | July 2023 813
5.1 PROCUREMENT COST
The word "procurement cost" refers to the costs related to finding appropriate suppliers
for the project, which includes selecting the best suppliers, requesting quotes from them,
negotiating the terms of the contracts with them, and ordering the material (Zeng &
Rossetti, 2003). The best item must be purchased at the appropriate quality, quantity,
time, and cost, according to the objectives of material procurement (Kamalaeaswari &
Vedhajanani, 2015). Observing consumed resources which are working staff, office
equipment, and capital cost, provide the cost of procurement (Fang & Ng, 2011).
5.2 TRANSPORT COST
Transportation is significant when considering logistic activities in the construction
industry (Sobotka & Czarnigowska, 2005). Generally, suppliers are responsible for
transport from their store to an intermediate warehouse or on-site storage. Meanwhile, the
contractor takes care of himself with on-site and material transportation to the
construction site (Fang & Ng, 2011). Rafiq et al. (2021) emphasised that the
transportation cost should relate to the distance travelled between the warehouse and the
destination, including the driver's salary, equipment expenses, fuel cost, and inventory
costs incurred in transit. The cost of the inspector and the rental or depreciation of the
vehicles should be included in the transportation cost (Fang & Ng, 2011).
5.3 COST OF SITE STORAGE
Some studies on the manufacturing sector believe that once the materials arrive at the
warehouse, the logistics process is complete (Lambert et al., 1998; Ferguson, 2000).
However, in the construction industry logistic process will not be ended until materials
are fixed to the exact location (Fang & Ng, 2011). Thus, construction materials are often
loaded into a temporary storage facility at the construction site before being fixed at the
appointed place (Fang & Ng, 2011). The fundamental responsibility of material
management is an in charge of the flow of materials from where they are ordered,
received, and stored until they are used (Patil & Pataskar, 2013). According to Fang and
Ng (2011), the cost of site storage shall include all the cost-related items, which are
material costs for racks, stow woods, other relevant materials, and labour costs charged
at the store. Moreover, it consists of the capital cost, which means the opportunity cost of
frozen material at the site (Fang & Ng, 2011).
5.4 INVENTORY COST
Inventory control is crucial to the timely and successful execution of construction
projects. The purpose of the inventory is to have the supplies on hand for when needed
by storing them (Zeng & Rossetti, 2003). Inventory also keeps finished goods, spare
parts, tools, and supplies needed for construction. Contractors maintain an intermediate
warehouse to keep materials and supply construction sites when needed (Kumar & Malik,
2022). The same authors mentioned inventory cost consists of holding cost, storing cost,
rent and electricity. The inventory holding cost is the difference between the transfer and
buffer stock costs (Zeng & Rossetti, 2003).
5.5 COST OF MATERIAL HANDLING
Effective material handling is a material management objective consisting of loading,
unloading, and fixing materials (Ramya & Viswanathan, 2019). Material handling is

S.M.R. Jayaruwan, H.S. Jayasena and U.S. Weerapperuma
Proceedings The 11th World Construction Symposium | July 2023 814
performed using machinery, mobile cranes, and other equipment or manually with human
resources (Muralitharan & Elangovan, 2015). Equipment used for material handling, such
as cranes, forklifts, chain hoists, and slings, should be sufficiently capable and adequately
maintained. Material handling costs include labour costs, machinery costs (cranes), and
equipment costs (Fang & Ng, 2011).
5.6 CUSTOM DUTY/TAXES
According to Jayasinghe et al. (2016), the tax was identified as a significant cost
component of the material. The construction industry development authority in Sri Lanka
and the Sri Lankan custom confirms that most of the construction materials in the local
industry are imported from foreign countries, and then there are several duties and taxes
charged. CESS levy, PAL, and customs duty take a significant amount on material cost
(Customs, 2023). The form of the contracts stated that paying tax on materials is a
contractor's responsibility.
Based on the ABC method, the Contractors' total LC can be quantified as follows:
Contractors’ total LC = Procurement cost + Cost of intermediate warehouse + Cost of
transportation + Cost of material handling (loading, fixing) + On site storage cost + Custom
duty/taxes
Therefore, if the contractor requires to minimise total LC, they shall identify possible LC
cost components to cut unnecessary costs.
6. STRATEGIES TO MINIMISE LOGISTIC COST
This research study focuses on developing strategies to minimise logistic costs from a
contractor's perspective. Several researchers have endeavoured to discover suitable
strategies for logistic cost minimisation. Further, strategies have been identified through
expert interviews. According to expert interviews, LC comes to the arena in two major
stages. They are LC estimating at the bidding stage and monitoring and calculating actual
LC during construction. Therefore, LC minimisation strategies shall be developed in the
bidding stage, and developed strategies will be implemented during the construction
stage. It is imperative to monitor the progress after implementing strategies to ascertain
the degree to which logistical activities conform to said strategies. Table 2 presents the
strategies recognised through the literature review and expert interviews. If at least one
expert said that a particular strategy minimises logistic cost, it has been mentioned as an
identified strategy through expert interviews. If a specific strategy has been deemed
effective in minimising logistic costs by at least one expert, it is considered an identified
strategy through expert interviews.
Table 2: Strategies
Strategy
Literature
findings
Expert
interviews
Better construction site plan
X
X
Better logistic plan
X
Identifying the most suitable material delivery schedule in line with the
construction schedule
X
Identifying the quickest route (lowest distance) with less disruptions
X
X

Minimising logistic cost of construction materials in the construction industry: Contractor's perspective
Proceedings The 11th World Construction Symposium | July 2023 815
Strategy
Literature
findings
Expert
interviews
Better labour supervision and optimising construction site with less
interruption
X
X
Better material management
X
Centralised material supply centre to supply materials for each ongoing
site
X
Local vendors
X
Identifying ideal storage capacity
X
X
Keeping own material plants to integrate the supply chain
X
Alternative transportation methods
X
Technological advancement
X
Ensure the quality of material
X
6.1 BETTER CONSTRUCTION SITE PLAN
According to Gustafsson and Schultz (2010), a construction site plan includes many
logistic cost-related aspects such as transportation routes, lifts, cranes, crane placements
and ranges, gates, passages, unloading areas, and storage areas. Experts emphasised that
a better construction site plan will minimise on-site transportation and storage costs and
save material handling by optimising the site space. Moreover, optimising construction
site space will minimise material handling costs since it saves working hours on loading
and unloading materials.
6.2 BETTER LOGISTIC PLAN
Said and El-Rayes (2011) developed a logistic planning model to assist contractors in
reducing material logistics costs by utilising an integrated approach that optimises the
critical planning decisions of material procurement and layout on construction sites.
Figure 2 shows that the existing model in a specific construction site cannot integrate
material procurement plans and storage layouts on construction sites. With that number
of drawbacks which increase logistic cost more, are arising. By utilising an integrated
strategy that simultaneously optimises two categories of decisions, the new model is
intended to assist contractors in reducing the costs associated with material logistics: (1)
material procurement decisions, which affect material inventory levels and storage
requirements; and (2) dynamic layout decisions, which identify various locations of
material storage areas and other temporary facilities over the course of a project. Both
types of decisions directly impact the objective function created to minimise the
construction logistics (Said & El-Rayes, 2011).

S.M.R. Jayaruwan, H.S. Jayasena and U.S. Weerapperuma
Proceedings The 11th World Construction Symposium | July 2023 816
6.3 IDENTIFYING THE MOST SUITABLE MATERIAL DELIVERY SCHEDULE IN
LINE WITH THE CONSTRUCTION SCHEDULE
A material delivery schedule minimises the number of orders and delivery times.
According to Expert 2, the most suitable material delivery schedule can be easily
implemented if a proper construction schedule is available. The construction schedule
mentions resource requirements for relevant activity in line with time. This strategy can
minimise procurement and transportation costs due to few material orders (Fang & Ng,
2011).
6.4 IDENTIFYING THE QUICKEST ROUTE
Identifying the quickest route with the lowest distance and fewer disruptions is crucial to
minimise material transport costs (Shah et al., 2019). Expert interviews further elaborated
on the quickest route strategy will be caused to minimise project delays, which saves
unnecessary costs for Contractors
6.5 BETTER MATERIAL MANAGEMENT
Shah et al. (2019) have mentioned that better material management which consists of
material procurement, material quality, and transportation of suitable material on-site at
the right time, is another strategy for logistic cost minimisation. If the material
management in construction projects is not managed correctly, it will create a significant
project cost variance (Gulghane & Khandve, 2015).
Figure 2: Construction logistic planning model (Adopted from Said & El-Rayes, 2011)
• Material shortage
• Improper storage
• Double handling
• Poor jobsite layout
• Low productivity
• Unorganized procurement
Material
procurement
decision
Minimize Construction logistic cost
components
Dynamic layout
decision
Material procurement
planning
Material storage &
site layout planning
Poor coordination
Existing Model
Cause to
Need new logistic
planning model
New Model
Better
coordination
(integration)

Minimising logistic cost of construction materials in the construction industry: Contractor's perspective
Proceedings The 11th World Construction Symposium | July 2023 817
6.6 CENTRALISED MATERIAL SUPPLY CENTRE TO SUPPLY MATERIALS FOR
EACH ONGOING SITE
Most of the experts stated that a centralised material supply centre allows bulk
purchasing, which causes a reduction in the number of orders. On the other hand, each
ongoing construction site can decline logistic costs because all the materials can be
delivered from one place.
6.7 LOCAL VENDORS
According to Sri Lanka customs, the construction industry spends high costs on customs
duties and port/airport levies depending on imported materials and experts confirmed it
is better to deal with local vendors to minimise duties, levies, and taxes as a logistic cost
component (Jayasinghe et al., 2016). Experts believe the Contractors should explore
alternative materials for imported materials.
6.8 IDENTIFYING IDEAL STORAGE CAPACITY
Ideal storage capacity cuts down the high initial cost of the store and maintenance costs
(Fang & Ng, 2011). On the other hand, experts confirmed that ideal storage capacity
minimises the number of material orders.
6.9 KEEPING OWN MATERIAL PLANTS TO INTEGRATE THE SUPPLY CHAIN
Another suggestion of the experts was keeping their material plants to integrate the supply
chain that, allows the contractor not to be concerned about material transportation from
suppliers' yards, taxations and material shortages.
6.10 ALTERNATIVE TRANSPORTATION METHODS
Contractors should find alternative transportation methods which spend the least
transportation cost to minimise the logistic cost. Experts recommended that material
transportation from railways is a cheap alternative transportation method.
6.11 TECHNOLOGICAL ADVANCEMENT & ENSURING QUALITY OF
MATERIALS
Furthermore, ensuring excellent quality material and using new technologies were
identified as effective strategies to minimise the logistic cost component. Poor quality
materials increase material rejections, which repeat the logistic process. As suggested by
Experts 1, 2, 3, 4, 8, 10 and 12, adopting new technologies improves the efficiency of the
material acquisition process and minimises the logistic cost as they have practically
experienced using Enterprise Resource Planning (ERP) system.
7. CONCLUSIONS
Examining logistical expenses is paramount for contractors as it facilitates the successful
execution of projects within budgetary constraints while attaining anticipated
profitability. The primary objective of this research endeavour was to formulate strategies
that mitigate logistical costs on material expenses, achieved through a comprehensive
review of existing literature and semi-structured interviews conducted with industry
experts. The literature review in this study centred on elucidating the fundamental
principles underlying the minimisation of logistical costs associated with construction

S.M.R. Jayaruwan, H.S. Jayasena and U.S. Weerapperuma
Proceedings The 11th World Construction Symposium | July 2023 818
materials, thereby underscoring the influential role construction materials play as a
critical resource in construction projects. Prior scholarly investigations have
unequivocally substantiated the significance of material costs within the overall
framework of construction expenditure. Consequently, this study adopted a contractor-
centric perspective in its examination of logistical costs, identifying a substantial portion
of such costs attributable to construction material expenses. Minimising unnecessary
logistic costs and observing the logistic cost component to reduce material costs is crucial.
The study presented the material logistic process and identified major logistic activities
that could be categorised as significant cost components. These costs related to the
logistics of construction materials were delineated based on the ABC approach.
The study found that logistic costs can be controlled in both the bidding and construction
stages. Accordingly, thirteen strategies were proposed to minimise logistic construction
costs on material costs. It was confirmed that estimators, planners, project managers, and
other industry professionals must properly know the logistic process and its cost
components. Logistic costs take a considerable proportion of material costs, and a lack of
planning and controlling of logistics can cause material cost overruns. Therefore, this
study's outcome is beneficial for contractors to have a clear picture of logistic costs and
develop a proper logistic plan to address logistic cost minimisation strategies. As both the
head office and construction site are involved in the logistic process, implementing proper
logistic cost minimisation strategies requires proper coordination and collaboration
between the head office and the site. The introduction of technological advancements can
enhance the implementation of these strategies.
Finally, in-depth investigation, proper training for staff, and identifying barriers will
provide continuous development for contractors in establishing logistic cost minimisation
strategies. The findings of this study are expected to contribute to the construction
industry's better understanding of the importance of logistic cost minimisation strategies
and their potential benefits.
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