What is Construction Material Management?

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Construction material management is the function of quantity planning, budgeting, sourcing, storing and on-site handling of construction inventory. It encapsulates the critical processes that help streamline the flow of materials for all construction projects executed by an enterprise.

Additionally, material management also encompasses key technologies, talent, and processes, involved in optimizing the purchasing, storage, and utilization of all materials. While the scope of material management is vast, its goal is to ensure that construction materials are available on-site and are managed in a highly efficient manner.

Construction firms become highly agile when they strengthen material management, benefiting from greater cost control, and enhanced on-site productivity. They can better predict demand for specific construction materials, such as TMT steel, ready-mix concrete, AAC blocks, OPC cement, tiles, etc. based on the project lifecycle and building requirements.

Let us understand why effective material management is critical to the success of a construction project.

Scope of material management in construction
Construction material management has a wide scope in the construction industry, as it plays a significant role in the optimization of acquisition & storage costs, as well as the efficient utilization of all materials. From buying the right materials from the right supplier to ensuring timely delivery and better material utilisation, material management is a critical domain performing multiple functions.

Forecasting & Planning
Construction firms focusing on a new project development across multiple sites, within various geographical conditions, require the appropriate materials at the right time. From analysing current inventory to forecasting new requirements, construction material management plays a vital role in ensuring construction firms remain agile throughout the project lifecycle.

Material procurement
Procurement plays a key role in material management in construction, which is why managers need to have complete control over the buying process from creating material estimates to issuing purchase orders. Critical areas, such as supplier selection, materials assessment, raising indents/purchase requisitions, awarding purchase orders, and refiling stock, need to be monitored regularly to drive operational efficiencies. Firms need to stay updated on the flow of the materials from suppliers to project sites, while also referencing a standardized materials store for effective materials management.

Inventory tracking and stock reconciliation
Construction inventory management also involves the effective handling, storage, and refiling of all inventory assets. Firms need to codify and classify their inventory, conduct regular inspections, and streamline dispatching protocols in a highly effective manner.  It is also important for firms to transport materials to project sites accurately, based on the on-ground requirements, quantities of materials, and specifications outlined.

Stock reconciliation is also a key part of construction material management, capturing the effective utilization of all materials across projects. It is critical to controlling costs, increasing the workability on site, and limiting wastage of key materials. The tracking, verification, and maintenance of stock is essential to ensuring construction projects are successfully developed in a timely manner.

Why is construction material management critical?
As construction materials account for 65- 70% of the overall construction project budget, it is critical to optimize the sourcing, storage, and utilization of the enterprise inventory. Additionally, it is important to chart all processes, from approvals management to delivery tracking, to ensure the availability of all materials when necessary.

Construction firms also need real-time insights on their inventory, periodic purchases etc. to optimize the utilization of building materials. From procurement to site-delivery, all materials must be accounted for to ensure optimal utilization and minimal wastage. With multi-site projects, processes become much more complex, requiring the use of a sophisticated technological solution.

Firms also have dynamic relationships with multiple sellers and engage the right suppliers for the right project. This is essential in projects that require highly customized materials with unique features and benefits. Buyers on board the right suppliers, analyse the product description/benefits offered, conduct price evaluation, issue purchase orders, receive approvals, and track the flow of the materials from supplier to project-site. The entire process needs to be highly streamlined to ensure that there are no delays, bottlenecks, or lapses in order deliveries, quality, or quantities.

Key benefits of material management solutions
Construction and Infrastructure firms can optimize their material management processes by opting for a comprehensive material management software specifically designed for their needs. Cloud-based material management solutions help construction firms remain one-step ahead of all project requirements while having complete control over their materials inventory on the go.

Procurement teams can also streamline purchasing complexities, introduce greater transparency and save costs by leveraging an all-encompassing material procurement and management solution. Key functions, such as raising indents, receiving bids, issuing purchase orders, creating bills of materials, tracking materials, automated stock updating, and processing inter-project materials transfer, can be performed seamlessly through a comprehensive construction material management solution.

Conclusion
Material management is a key business function, focusing on optimizing the planning, procurement, utilization, and management of project inventory. Construction firms can leverage technology to help better manage their inventory while having end-to-end control, from estimate to consumption. The top construction inventory management software solutions focus on empowering decision-makers, by optimizing core processes and providing real-time insights across materials categories. BuildSupply Material Manager makes material management easy through its comprehensive solution suite, designed to offer construction firms and contractors complete control over their purchasing processes, inventory flow and tracking.

 

References
https://www.nbmcw.com/tech-articles/project-management-arbitration/40324-effective-materials-management-in-construction-projects.html
https://theconstructor.org/construction/construction-materials-management/7200/
http://ijermce.com/specissue/may/12.pdf
https://pdf.savills.asia/asia-pacific-research/india-research/covid-19—building-again-brick-by-brick-april-2020.pdf
https://www.academia.edu/38544689/Importance_of_Material_Management_in_Construction_Industry
https://www.thehindubusinessline.com/news/real-estate/spike-in-cement-prices-troubles-construction-real-estate-sectors/article31574763.ece

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