Material Procurement and Management in Real Estate

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The successful completion of a construction project demands effective management of the core processes like planning, procurement, execution, monitoring and controlling.  Since construction materials make for the majority of the project cost, their mismanagement can negatively affect the entire life-cycle of the project. The construction industry is often found grappled with issues like price fluctuation, improper handling of materials, unattended timelines, material wastage and poor communication among the stakeholders. However, such ill-occurrences can be significantly eliminated with effective material procurement and management strategies and softwares. Reducing incurring costs, time and efforts, can considerably increase the viability of the construction projects.

Material Procurement and Management

Infrastructure development has become the core sphere where major market capitalisation has been taking place. A lot of construction and infrastructure projects such as metros, rails, commercial buildings, etc. are marking this progress. Therefore, it is necessary to streamline construction project planning and control of which material procurement and management is an integral part. Materials, directly or indirectly, impact every aspect of a construction process. Construction companies that do not leverage material management systems fail to avoid additional costs that may be a result of either ordering more than the current requirement, delayed material deliveries, purchasing on inflated prices or lack of material traceability.

Encompassing functions like supplier viability analysis, purchasing, inter-site transfers, logistics, and transport, receiving, and invoicing, material procurement ensures the availability of the appropriate amount of the required product at the right time at best prices. It is also observed that effective procurement methodologies can help increase profitability manifold. It is, thus, advisable to standardize the procurement process in order to achieve better margins and inventory utilisation.

The procured construction materials need to be effectively managed with respect to storage, security and issuance. The material management cycle comprises of everything ranging from estimate to consumption and necessitates regulation to ensure overall cost-reduction and timely project delivery. The same can be accomplished by leveraging an ideal material procurement and management software like BuildSupply Material Manager. It is capable of handling numerous significant tasks including creation of bill of materials, raising indents, receiving bids, issuance of purchase orders, inter-project material transfer, real-time store tracking, and store reconciliation, advancing effective material management.

Construction Material Procurement And Management Software: A Game Changer
With the advent of advanced technologies in the construction business, a significant transformation has been observed. An efficient construction material procurement and management software analyses your material requirements and reduces all purchase related complexities thus, increasing the operational efficiency exponentially. The procurement and management processes are streamlined owing to a wide range of functionalities offered by these softwares.

If you own a construction firm and looking forward to investing in a construction procurement and material management software, the below-mentioned points will help you in choosing the best software to meet your needs –

  • Efficient procurement process and reduced purchasing complexity
    One of the biggest advantages of using a construction material management software is effective material purchasing which, in turn, enhances the procurement process manifold. In sophisticated businesses including construction, it is indispensable to make effective procurement decisions.to cater to the niche requirements. With its advanced built-in features to further purchase bid management, order management, purchase requisitions, estimate and procurement integration etc., an ideal construction material procurement and management software eliminates various anomalies concerning the procurement process and streamline it further.
  • Monitors inventory levels
    Effective material usage analysis as performed by a construction material management software helps keep track of materials that are being used in real-time and also, depicts the exact balance of the inventory in-hand. For instance, when the inventory reaches the buffer stock level, it sends out alerts. It also calculates the exact re-order quantity that helps avoid situations like stock-outs and excess stock, thus, enhancing liquidity and encouraging effective working capital management. Moreover, it prepares and provides a date-wise detail of inventory history with regards to quantity of materials ordered, their prices along with suppliers’ information, enabling accurate budgeting.
  • Provides a single unified platform solution
    Usually, a lot of challenges pop-up while handling construction inventory and having a unified inventory management platform simplifies the complexities involved and enables effective decision making. The software allows the user to onboard various suppliers, request material quotations, compare & finalize quotations, raise purchase orders, track materials from supplier to store, etc. Having these functions available at your disposal under a single unified platform can help in business analysis and projections as well.
  • Automated purchase orders
    When orders are handled manually, a lot of time gets consumed, leaving the process prone to errors. Automating purchase orders with the help of a centralized software allows sending of purchase requisition to the concerned authority for approval. Thereafter, it automatically communicates the purchase orders to the respective vendor, thus, eliminating paperwork and loss of important data points.
  • Measurement units’ flexibility
    Every construction material has a different unit of measurement. For instance, sacks of cement & wood logs are measured in tons or kilos and tiles come in a set of a fixed number of boxes. With a material management software, the issue of data flexibility is catered to, meaning users can choose from a varied range of ‘units of measurement’ as per their individual requirements.
  • Material tracking & traceability
    In the events like purchase returns, inter-site material transfers etc, it becomes inevitable to track the inventory movement in order to achieve correct inventory valuation. With a construction material management software in place, inventory tracking functionality can be improved considerably which, in turn, helps you track and manage inventory at a project and site level.
  • Financial saving and more working capital to invest back in your business
    In order to ensure appropriate investment in the working capital, it is recommended to reduce the inventory ordering and carrying costs. With an effective construction material management software like BuildSupply Material Manager, it becomes convenient to accurately predict the inventory requirements at all times along with reduced material wastage that translates into reduced costs and improved profitability.

The success of the construction business depends on several factors including the maintenance of dependable inventory, effective material procurement and management of sales and work orders. A construction procurement and material management software, with its all-inclusive approach, automates the material management process and makes it completely hassle-free, thus, significantly reducing the manual-intervention. Consequently, construction businesses find themselves in a better position to make timely decisions that not only enhances their material procurement process but also promotes cost reduction, prompting further growth.

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