Materials management is both planning and controlling to make sure that materials that appear on site are of the correct quality and quantity. It is also ensuring that materials were delivered on site at the correct time and at the lowest cost possible.
The materials management process begins in the early stages of a project plan. It integrates communication between head office and on site, ideally with a purchase requisition. All employees must understand the importance of the materials management process. The use of construction management software is growing and can be integrated as a major asset in managing material orders.
How can managing material orders on site save you time and money?
Procurement
Whether you are building a small extension or a large office block, establishing your best material supplier is critical. This can be based on price and stock availability, but just as important will be reliability of the supplier. Whether you can afford the time at the start of each project or every 6 months, it is important to re-visit your material prices occasionally to see if your rates are competitive with the rest of the market.
Time to order
A lot of construction businesses will order materials on a daily basis. Lists of materials are drawn up and sent to the office for ordering (purchase requisition). Planning can dramatically reduce material costs just by shopping around. Allowing time between order and delivery means you can shop around for the best prices on the day for your required list. If you don’t have time to do this, set a rule that orders over € x require 3 quotes from suppliers. This alone can make a dramatic influence on your project costs.
Materials cost and planning
Improved budgeting and planning is hugely important for the material management process. Materials make up a huge percentage of a project’s budget, so accurately scrutinising these material costs throughout the project ensures that the project is kept on track.
The implementation of construction purchase order software and a good material management strategy gives contractors access to important historical material prices. This data gives companies the ability to analyse material costs as they arrive to ensure the agreed rate is being charged. Our research has shown that these agreed prices can be lost at best and tend to fluctuate without monitoring. As much as I don’t like to plug software in these blogs, this is LiveCosts.com’s best feature.
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Having excess material filling up your site is not only a waste, but it reduces the protection of your materials in the case of damages, break in’s, and increases the likelihood of an operative injuring themselves etc. Without proper planning, a construction business may over order in fear that they won’t have enough materials to complete the job. Effective material management processes and implementation of Lean Construction methods can effectively decrease material waste and have a positive impact on project costs.
Delivery
Communication around expected delivery times from the suppliers can be essential to allow the site operatives to plan their tasks around these deliveries on any given day.
General good practice is to assign one operative per site location to make the requisition and receive the goods. Site operatives will then have to check:
- Quantity on purchase order vs delivery docket vs actual delivery
- Quality of delivered items vs expected quality
- Missing items from original order (purchase order) vs delivered goods
Your tracking system, whether it be paper based or software, should be able to record damaged materials as they appear on site. This part of tracking can also help you determine if there is an issue with the ordering of your materials.
Having a workflow with the site operative to relay this information back to accounts payable is critical as planning and overpayment can be adversely affected.
Kitting
This is a method where materials can be packaged in customised kits, containing just what is needed for a particular room, floor, or area of a construction project. Your distributor can work with the contractor to do the pre-work. This facilitates faster delivery and installation on-site and reduces the amount of waste that needs to be carried away.
