Jigjiga University

CoET
Program: Construction Technology
and Management
Course code: CoTM 5202
Course name: Construction
Materials Management

1
Course Content

1. Introduction to construction materials

management
Definition
Importance of construction materials management
Management of Construction Materials
Classification of materials

2. Management of the Production of construction

Materials
Management at: Quarries, Plants and Industries

2
Course Content

3. Construction Materials Supply

Management:

Supply chain management in

construction
Procurement of Construction materials
Transportation of Construction Materials
Construction Materials Handling
Storage and Inventory Management
3
Course Content

4. Construction Materials Standard and

Quality management.

.Evaluation and Requirements for the

completion of the course
Continuous Assessment 50 %
Written examinations 50%
Attendance requirement 75%

. Reference
Lecture note
Any related materials to the subject
4
1. Introduction to construction
materials management
Definition of MM
Materials management is the process of management
which co-ordinates, supervises and executes the tasks
associated with the flow of materials to, through and out
of an organization in an integrated fashion.
Materials Management is an integrated process of
planning and controlling all necessary efforts to make
certain that the quality and quantity of materials and
equipment are appropriately specified in a timely manner,
are obtained at a reasonable cost and are available when
needed. The materials management systems combine and
integrate the take-off, vendor evaluation, purchasing,
expediting, warehousing, distribution and disposing of
materials functions.
Materials management is part of logistics and refers to the
location and movement of the physical items or products.
5
Introduction Contd
Materials management is a process:
It is how a building is designed and
how materials are estimated.
It is how materials are acquired and
even how the packaging is specified.
It is how the delivery schedule is
designed.
It is how contractors plan materials
use and how they manage previously
used materials and cuts.
It is how waste is managed for use
elsewhere or recycling rather than
being discarded in a landfill.
[Construction Materials Management
Guideline, A Chapter of the American6
Institute of Architects]
Introduction Contd
Materials Management is The planning and
control of the functions supporting the
complete cycle (flow) of materials, and the
associated flow of information. These
functions include identification, cataloging,
standardization, need determination,
scheduling, procurement, inspection,
quality control, packaging, storage,
inventory control, distribution, and disposal.

7
Introduction Contd
Materials management in construction is the efficient use
of goods and equipment before, during and upon
completion of a building process.
It deals with material cost, material supply material
storage, utilization and handling
The scope of materials management applicable to
construction industry involves the planning of materials,
procurement of materials, packaging, storage, inventory
control, transportation of materials, material handling,
disposal of scrap and surplus
Successful materials management requires the
participation of all persons involved in a construction
process.

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Objectives of Materials Management

Economy in Materials Cost

Efficient control of inventories
Ensure Uniform flow of Materials for
production/construction
Ensure right quality at right price
Establish and Maintain good relations with
customers
Economical consumption of important items and
finding their substitutes

9
Why is CMM important?
One of the three cost components in Construction is Material .
Hence, Materials management is an important element in project
planning and control to make construction projects cost efficient.
Materials represent a major expense in construction, so minimizing
procurement or purchase costs presents important opportunities
for reducing costs.
Poor materials management can also result in large and
unavoidable costs during construction.
First, if materials are purchased early, capital may be tied up and
interest charges incurred on the excess inventory of materials.
Even worse, materials may deteriorate during storage or be stolen
unless special care is taken.
Second, delays and extra expenses may be incurred if materials
required for particular activities are not available. Accordingly,
insuring a timely flow of material is an important concern of
project managers.

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Why is CMM important?
Materials management is not just a concern during
the monitoring stage in which construction is taking
place.
Decisions about material procurement may also be
required during the initial planning and scheduling
stages. For example, activities can be inserted in the
project schedule to represent purchasing of major
items such as elevators for buildings.
The availability of materials may greatly influence the
schedule in projects with a fast track or very tight
time schedule: sufficient time for obtaining the
necessary materials must be allowed.
In some case, more expensive suppliers or shippers
may be employed to save time.

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Who are involved in CMM?
Many People are Involved
Successful materials management like
any successful project relies on the skills of
many professionals from the architect
and designers through project
management to the trade contractors.

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At Pre-construction phase, people Involved
In materials
management:
Team Role in Materials Management
Member
Architect Designs for best use of standard sizes, for multiple
applications and for their recyclability.
Engineer Ensures appropriate structural component dimensions,
quality and spacing for use of standard fasteners and
materials for multiple applications and recyclability.
Estimator Uses latest materials takeoff technologies and exercises
accuracy in estimates.
Purchaser Plans purchases and deliveries to reduce
surplus and to balance materials maintenance
during on-site storage versus transportation

13
On Construction site people involved In
materials
Management:
Team Role in Materials Management
Member
Site Applies the materials management plan to the site and
construction oversees its implementation. Takes into consideration
manageme physical space available
nt and ensures subcontractors are familiar with and
committed to the plan
Site Keeps track of new materials, cuts and used materials;
materials organizes and stores them for availability by the
manager various trades throughout
the project in accordance with the materials
management plan.
Communicates with site management and Materials
Subcontract Manager regarding the types of materials they may be
manageme able to use for various
nt purposes. Ensures trades follow the Plan's practices.
Trade Use materials properly, store new materials properly, 14
workers. handle and cut them carefully for maximum use and
Management of Construction
Materials, Permanent and Temporary

Construction materials cover all types of materials used

in construction including electrical and mechanical
fittings fixture, devices and instruments that are
incorporated during the construction of permanent
works and temporary supporting works at site.
permanent works: Materials used for the
construction of permanent works are named as
permanent materials
temporary supporting works: those materials
used for the construction of temporary works are
categorized under here. ( engineers facilities,
offices, false works, formworks)

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Classification of materials
Why should we classify materials?
We deal with hundreds of different types
of inventory items. With so many items,
complexity of managing the process
increases.
To manage these inventories effectively
grouping is essential.
Grouping together of materials of similar
technical affinity is known as
classification.
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Classification contd.
The primary purpose of classifying materials is
to control quality, cost and timely supply.
There are many factors that need consideration
while classifying materials. These include
storage space, shelf life, supply reliability,
inventory costs, ease of identification,
construction sequence, transportation
requirement, price, procurement time,
procurement source and project life.
Some of the general categories are;
(a)bulky, one time purchase, repetitive use, and
minor materials
(b)Vital, essential and desirable materials
(c)Indigenous and imported materials
(d)High price, medium price and low price materials
(e)High usage value, medium usage value and low-
usage value materials

17
Classification contd.

Classification can be also be based

on various attributes:
By size
By names
By values
By end use
By product category

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 ABC Classification of construction Materials
The most commonly used method for classifying construction
materials is to group them into high-value, medium-value and low-
value materials.
this classification is achieved using the ABC analysis. The
prerequisite for applying the ABC analysis technique is that the
project should have a standardized bill of materials listing the
physical quantities (including standard usage), unit rate and total
cost for each item.

BILL OF MATERIALS

S.No. Item of Uni Quantit Rate Amou

material t y nt
s

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The materials
Grou Total Inventor
management
p Item y
technique of ABC
analysis is based Class s Costs
on the principle of A 10% 70%
control by
selection which
implies that is not B 20% 20%
necessary to give
the same degree of
attention to C 70% 10%
procurement ,
storage, issue and
control of all types
of materials. 20
ABC Classification
Class A
5 15 % of units
70 80 % of value
Class B
30 % of units
15 % of value
Class C
50 60 % of units
5 10 % of value

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Methodology
(a) Identifying materials required and
estimate quantity of each material.
(b)Obtaining the approximate unit rate
for each item.
(c) Assessing the requirement during
the period under consideration, i.e.
yearly or project completion basis.
(d)Determine the usage value of each
type by multiplying the quantity
required with the corresponding
unit rate.
22
Methods contd

e. Calculate the percentage usage of

each material with respect to total
project cost
f. Arrange the items in the descending
order of usage value and then
compute cum. Usage value against
each item.
g. Draw two horizontal lines
demarcating the descending order of
the cum purchase value at 70% level
and 20% level 23
ABC Classification:
Example
PART UNIT COST ANNUAL USAGE
1 $ 60 90
2 350 40
3 30 130
4 80 60
5 30 100
6 20 180
7 10 170
8 320 50
9 510 60
10 20 120
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 ABC Classification: Example
(cont.)
TOTAL
PART %UNIT
OF TOTAL
COST% OF TOTAL
ANNUAL USAGE
PART VALUE VALUE QUANTITY % CUMMULATIVE
1
9 $30,600 $ 60
35.9 6.0 90 6.0
8 16,000
2 18.7
350 5.0 40 11.0
2 14,000 16.4 4.0
A
3 30 130 15.0
1 5,400 6.3 9.0 24.0
4 4
4,800 5.680 6.0 60 30.0
B
3 5
3,900 4.630 10.0 100 40.0
% OF TOTAL % OF TOTAL
6 CLASS6
3,600 4.2
ITEMS 20 18.0
VALUE 180 58.0
QUANTITY
5 3,000
7 3.510 13.0 170 71.0
10 A
2,400 9, 8,2.8
2 71.0
12.0 C 15.0
83.0
7 B8
1,700
320
1, 4,2.0
3 16.5
17.0
50 25.0
100.0
C9 6, 5,510
10, 7 12.5 60 60.0
$85,400
10 20 120
Example 10.1
25
Classification contd.
ABC classification
A ITEMS
Small in number, but consume large amount
of resources
Must have:
Tight control
Rigid estimate of requirements
Strict & closer watch
Low safety stocks
Managed by top management
Low ABC analysis does not stress on items
those are less costly but may be vital 26
Classification contd.
B ITEMs
Intermediate
Must have:
Moderate control
Purchase based on rigid requirements
Reasonably strict watch & control
Moderate safety stocks
Managed by middle level management

27
Classification contd.
C ITEMS
Larger in number, but consume lesser
amount of resources.
Must have:
Ordinary control measures
Purchase based on usage estimates
High safety stocks
Limitations of ABC analysis:
Items on the border line of the ABC
classification need to be scrutinized for
placing them under A/B or B/C.
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Classification contd.
H-M-L Classification
High, Medium, Low value of items.
Focus: Cost per unit of items.
Useful for:
keeping control -over material consumption at the departmental level
for deciding the frequency of physical verification
controlling purchases
V-E-D Classification
VITAL-ESSENTIAL-DESIRABLE
Focus: To determine the criticality of an item. Mainly useful for the
purchase department.
Based on critical value & shortage cost of an item
It is a subjective analysis.
Items are classified into
Vital: Shortage cannot be tolerated.
Essential: Shortage can be tolerated for a short period.
Desirable: Shortage will not adversely affect, but may be using more
resources. These must be strictly scrutinized
ABC in conjunction with VED is used for classification of materials
as shown in the table under:- 29
Classification contd.

V E D ITEM COST

A AV AE AD CATEGORY 1 10% 70%

B BV BE BD CATEGORY 2 20% 20%

C CV CE CD CATEGORY 3 70% 10%

CATEGORY 1 - NEEDS CLOSE MONITORING & CONTROL

CATEGORY 2 - MODERATE CONTROL.
CATEGORY 3 - NO NEED FOR CONTROL

VED action plan

VITAL: Maintain large stock of
inventory.
ESSENTIAL: An In-between policy
DESIRABLE: Minimum stock is
enough

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Classification contd.

S-D-E Classification
Scarce-Difficult to Obtain-Easy to Obtain
Focus: Availability
Useful for the procurement department, vital to
the lead time analysis, helps in determining
purchasing strategies.
SCARCE: items in short supply.
DIFFICULT: items which might be available in the
indigenous market but cannot be procured easily,
items from distance places, un-reliable suppliers
EASY: items which are easily available, possibly
from the local markets

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Classification contd.
F-S-N Classification
Fast Moving
Slow moving
Non-moving.
Focus: Inventories
Useful for: Stores department and inventory control. Enables the
adoption of the right type of inventory policy to suit a particular
situation. Also useful for controlling obsolescence.
Categorization is based on value, criticality and usage.
To determine the number of months lapsed since the last
transaction the date of receipt or the last date of issue is taken
whichever is later.
Fast Moving items: most inventory models are aimed at managing
the fast moving goods, which exhibit a regular consumption pattern.
Slow Moving items: Many spare parts come under this category;
they require different management approach, (see below).
Non-moving items: Optimal stock disposal rules rather than
inventory provisioning rules are to be determined.

32
Classification contd.
Managing Slow moving inventory
1. If spares are required only at a pre-specified time, such
as the time of scheduled major maintenance for
replacement, then it is desirable not to stock them but to
place procurement orders sufficiently well in advance,
keeping lead times in view, so that spares arrive just-in-
time.
2. If the part gives adequate warning of an impending
breakdown, then the best policy is to place an order the
moment a warning is received. Adequate warning means
when the lead time required is less than the warning time.
3. In situations where adequate warning is not obtainable,
some stock should be kept. In general one-for-one
ordering policy is useful. This means placing an order for
one spare when one is consumed

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Classification contd.
X-Y-Z Classification
Is Based on the value of stocks on
hand (i.e. investment in inventory)
Items whose inventory values are high are
X items.
Items whose inventory values are low are
Z items
Class of items A B C
Items whose
Make efforts inventory
to reduce the values
Make efforts to convert to Y are
Steps to be taken to dispose
X stock to Z category category off surplus stocks
moderate are Y items.
Make efforts to reduce the Items are with in control, no control may be further
YXYZ is stock
used in conjunction
to Z category with
further action ABC analysis
is necessary tightened as
shown under
Items are with in control, no stock levels may be reviewed Items are with in control, no
Z further action is necessary twice a year further action is necessary

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Classification contd.
XYZ in conjunction with FSN analysis:
This analysis helps prevent
F S N
obsolescence analysis helps
Class
prevent obsolescence
of
items
X Tighten Control Deplete stocks Dispose off
to very low level immediately at
optimum price

Y items are within Deplete the Dispose off as
control, no stocks further, early as possible
further action is at a good price
necessary.
Z Liberalize Control items are within Dispose off as
(to reduce control, no early as possible,
clerical costs) further action is even at lower
necessary. price 35
Question
s? 36