PROJECT MANAGERS’

COMPETENCY ENHANCEMENT
TRAINING

Module SIX

TRAINING ON

CONSTRUCTION MATERIALS

MANAGEMENT

SPONSORED & ORGANIZED BY: PREPARED BY: HABCON CONSULT

ETHIOPIAN ROADS AUTHORITY www.habconconsult.com

www.era.gov.et info@habconconsult.com
Phone-0911247229

JULY 2013
 TRAINING ON CONSTRUCTION MATERIALS MANAGEMENT

Contents
1. INTRODUCTION ............................................................................................................................... 3
2. COMPONENTS OF MATERIAL MANAGEMENT ................................................................................ 4
3. OBJECTIVES OF MATERIALS MANAGEMENT ................................................................................... 5
4. FUNCTIONS OF MATERIALS MANAGEMENT ................................................................................... 5
4.1 PLANNING ..................................................................................................................... 6
4.2 PURCHASING ................................................................................................................. 7
4.3 RECEIVING ..................................................................................................................... 7
4.4 INSPECTION................................................................................................................... 8
4.5 STACKING AND STORAGE.............................................................................................. 8
4.6 ISSUING MATERIAL ....................................................................................................... 9
4.7 INVENTORY CONTROL ................................................................................................... 9
4.8 MATERIAL RECONCILATION REPORT ............................................................................ 9
5. MATERIAL MANAGEMENT AND WASTE CONTROL IN ROADPROJECTS........................................ 10
5.1 FUEL AND LUBRICANTS ............................................................................................... 10
5.2 SPARE PARTS, EXPLOSIVE AND TYRES......................................................................... 17
5.3 LOCAL MATERIALS ...................................................................................................... 19
6. MATERIAL MANAGEMENT CHALLENGES ON ROAD CONSTRUCTION PROJECT ........................... 21
6.1 Challenges related to materials classification & ordering .......................................... 22
6.2 Challenges related to Site arrangement ..................................................................... 23
7. JUST-IN-TIME LOGISTICS IN THE SUPPLY OF CONSTRUCTION MATERIALS .................................. 25
7.1 LOGISTICS IN THE MANUFACTURING INDUSTRY ........................................................ 25
7.2 LOGISTICS IN THE CONSTRUCTION PROCESS.............................................................. 26
7.3 THE JIT LOGISTIC CONCEPT ......................................................................................... 27

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1. INTRODUCTION

Materials management in construction is the process of field and office activities of

planning, executing and controlling materials purchase, loading, transport and unloading,
handling and processing to avoid damage minimize wastage and deliver the required
material at site when needed so that the final material cost of the project will be optimum.
The goal of materials management is to insure that construction materials are available at
their point of use when needed. The materials management system attempts to insure that
the right quality and quantity of materials are appropriately selected, purchased, delivered
and handled on site in a timely manner and at a reasonable cost. Materials management is
the system for planning and controlling all of the efforts necessary to ensure that the
correct quality and quantity of materials are properly specified in a timely manner, are
obtained at a reasonable cost and most importantly are available at the point of use when
required.

Construction consists almost entirely of the assembly of components and materials. Thus
Materials management is an important element in project management. Materials
represent a major expense in construction, so minimizing procurement costs improves
opportunities for reducing the overall project costs. Poor materials management can result
in increased costs during construction. Efficient management of materials can result in
substantial savings in project costs. If materials are purchased too early, capital may be held
up and interest charges incurred on the excess inventory of materials. Materials may
deteriorate during storage or get stolen unless special care is taken. Delays and extras
expenses may be incurred if materials required for particular activities are unavailable.
Ensuring a timely flow of materials in an economic way is an important concern of material
management. Significant portion of reducible costs are related with efficient waste control.

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What is waste?

Waste is anything which results in money being lost. Wastes incur when materials are
damaged, less or excess is supplied than required, late or early delivery, unwise loading and
unloading and inefficient transportation systems, expensive material handling procedures,
poor methodology and inadequate workmanship and also due to unavoidable process
wastes.

To effectively manage and control materials, the performance of materials management

should be measured. A performance measure calculates the effective working of a function.
These performance measures may differ from system to system. The measures divide the
materials management system in parts and make the working of the system more efficient.
When joined, the measures make complete the materials management system.

Material management can, therefore, be defined as a process that coordinates assessing the
requirement, planning, sourcing, purchasing, transporting, storing and controlling of
materials with the minimum wastage achievable to optimize profitability by reducing cost of
material. Construction materials account for 60 to 70 percent of direct cost of a project or a
facility, the remaining 30 to 40 percent being the process costs.

2. COMPONENTS OF MATERIAL MANAGEMENT

 Required Material estimation: requirement assessment

 Material delivery Scheduling,
 Sourcing: Identification of sources
 Procurement: purchasing, producing
 Receiving and inspection,
 Material handling and transport,
 Inventory control, storage and warehousing
 Waste control management

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3. OBJECTIVES OF MATERIALS MANAGEMENT

 Efficient materials planning

 Economic sourcing, procurement and transportation
 Efficient handling, Storing and inventory control
 Effective Supply and distribution of materials
 Quality assurance
 Good supplier and customer relationship
 Improved departmental efficiency

To fulfill all these objectives, it is necessary to establish harmony and good co-ordination
between all the employees of material management department and this department
should have good co-ordination with the other departments of the organization to serve all
construction activities.

4. FUNCTIONS OF MATERIALS MANAGEMENT

The functions of Materials Management are discussed below:

In order to fulfill the objectives of materials management as stated above and to meet the
basic objectives and goals, the functions of the materials management are also categorized
as primary and secondary functions.

(I) Primary Functions

To meet the primary objectives, the primary functions of the materials management are
given as follows:
 Materials Requirement Planning (MRP)
 Inventory Planning and Control
 Ascertaining and Maintaining the Flow and Supply of Materials
 Quality Control of Materials
 Departmental Efficiency

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(II) Secondary Functions

 Standardization and Simplification

 Make and Buy Decisions
 Coding and Classification of Materials
 Forecasting and Planning

4.1 PLANNING

The most commonly used basis for planning things out for the project is the BOQ prepared
by the client, which usually misleads the project in precisely estimating the required
material supply both in kind and size. Materials requirement shall be computed from the
working detail documents take-off. Companies may have two major levels in planning-
micro and macro level. Time, cost, material, equipment and labor are the five major
types of planning undertaken on sites. materials planning should be revised as frequently
as possible, preferably every week, in order to accommodate any variations and/or
progress in the project with time and also related with current information gain and design,
methodology and other changes.

With characteristics of construction industry; such as high construction cost, long duration
and complicated participators; it is very difficult to plan and deal with at managerial affairs
in a construction project. As to materials, which consist large portion of construction
cost, thus have the same problem.

Without complete plan, it may cause many obstacles in the supply procedure; for example
delays in the schedule or wastes of other resources when some materials are supplied too
late. And when some materials are supplied too early, it will also probably raise
the inventory cost on carry, storage, overdue and insurance. In the construction industry,
the planning and management of material supply are usually handled roughly with past
experience and limited information.
It lacks some more systematic methods to increase the decision benefit.

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4.2 PURCHASING

Purchasing procedure can be described with the following steps:

 Step 1 – Material Indent

 Step 2 – Enquiry to Vendors
 Step 3 – Vendor Comparison
 Step 4 – Vendor Selection and Negotiations
 Step 5 – Purchase Order
 Step 6 – Vendor Evaluation

Materials buying schedule shall also be prepared and revised periodically to entertain any incoming
variations and changes requirement.

It. Material Unit Measured Waste Supply Delivery Purchase Moving Total Site Procurement
No. Qty factor Qty period time Time Procurement Delivery start date
planned period date

4.3 RECEIVING

The receipt system can be divided into:

i. Receipt from outside suppliers

ii. Receipts from internal divisions.
System of receipt starts even before the material reaches the site. The three documents
that should be dispatched are copy of purchase order, supplier’s advice document and the
consignment note. This enables the Stores manager to organize and plan for clearances of
materials. For receipt from internal divisions, usually transfer notes and return to stores
documents are used.

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4.4 INSPECTION

Inspection can happen in two ways

1. Pre- dispatch inspection
2. Inspection on site
It is the responsibility of the inspector to inspect all materials delivered to the site prior to
their being used in the work, most importantly there is a need to inspect before loading and
transporting to site. It is desirable to perform inspection of materials or fabricated products
prior to their delivery at site. The inspector shall have rights to reject faulty material and
remove from site or return to head office. With respect to manufactured goods, the quality
requirements should be specified in the purchase order.
Methods of Inspection
There are three methods of inspection:
i. Visual
ii. Tactile/Tangible
iii. Statistical

4.5 STACKING AND STORAGE

Types of physical storage system on site vary according to the space availability and
company practices. Industrial guidelines are also taken into consideration for the stacking
and storage of particular materials. Materials are most often classified as per the comfort
level of the workers. Basic categories followed are civil, electrical, plumbing, finishing,
construction chemicals, miscellaneous. The materials are also often stacked as per the
specification of the vendor or manufacturer.
Relevant ISO Codes (ISO: 4082: recommendations on stacking and storage of construction
materials at site) specifications are also followed.
For Example specifications prepared as per ISO: 4082, require:-
a. The materials should not be affected by impurities or atmospheric agencies.
b. Materials like cement should be stored in covered sheds and stacked on timber
raised platforms.

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c. Reinforcing bars should be stacked in yards away from moisture to prevent rusting
and also away from oil and lubricants. Bars of different classification, sizes and
lengths should be stored separately to facilitate issues.

4.6 ISSUING MATERIAL

Issues can be divided into:

i. Issues to consuming departments
ii. Issues to outside suppliers for processing or conversion.
Issuing on site does commonly happen in the case of local construction materials. In the
case of sand, select material or aggregate, the materials are consumed as and when
required corresponding to the progress of the project. For other materials, issues are based
on production programs. Based on this and the supply bill of materials, work orders are
printed, listing for each material, quantity to be issued against each component requiring
that material. This automatically controls consumption.

4.7 INVENTORY CONTROL

Inventory control can be defined as the sum of the value of raw materials, fuel and
lubricants, spare parts, maintenance consumables at any given point of time.

4.8 MATERIAL RECONCILATION REPORT

Material reconciliation report shall consist of the material description, measured (as-built)
quantity, and planned waste factor that has been allowed, Actual total consumed quantity,
actual waste factor, location of work, identified causes that has changed the waste factor,
suggestions and recommendations for future actions. This material reconciliation report can
also reported graphically as S-curve

It. Material Unit Measured Waste Consumed Location Waste Change Cause Suggestions &
No. Qty factor Qty Factor in Recommendations
planned Actual waste
Factor

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5. MATERIAL MANAGEMENT AND WASTE CONTROL IN

ROADPROJECTS

In road construction projects few materials takes the lion share of the material demand of
the project. The major material required being fuel & lubricants whose cost share reaches
on average up to 25%. Local materials such as embankment, capping, sub-base, base, sand,
stone and crushed aggregate materials cost on site contribution is also significant, about
20% of the total project cost while few other industrial materials like cement, reinforcement
steel bars, explosives, bitumen and spare parts cost reach 20%. Hence it is wise to
concentrate on the proper management and waste control of these materials.

5.1 FUEL AND LUBRICANTS

In a road construction project, the major portion of the project expense is fuel and lubricant
cost. These are also vulnerable to theft and adulteration and misuse and needs special
follow up and control, from ordering to receiving, and up to its final usage. It is also wise to
follow the fuel delivering trucks from suppliers to its final destination in some convenient
ways.

REQUIREMENT ASSESSMENT:

To best estimate the fuel demand of a project it is mandatory to properly plan the
equipment requirement of the project that requires fuel to operate; estimate the
equipment hours required and consumption rate from previous reports or performance
manual of the equipment, when new . Continuous updating of the above data is of high
importance as ground facts could differ from the planned assumptions depending on the
project site condition, equipment current status and prevailing working environment.

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SOURCING, PROCUREMENT AND TRANSPORTATION:

Sources of fuel in Ethiopia are EPE (Ethiopian Petroleum Enterprise) and are distributed
through few oil companies such as; NOC, Oil Libya, Total, Yetebaberut, TAF Oil, Nile oil,
WAS, Dalol… In identifying the best source the following points shall be taken into
consideration:
o Credit Facility
o Capacity (Delivery potential)
 Delivery trucks quantity (opportunity to get fuel fast as ordered)
 Financial strength /purchase power (availability of fuel as required)

The supply cost of fuel is highly regulated, fixed by Government; hence cost of fuel is almost
the same among the oil companies. Hence purchase and transportation cost of fuel could
not be criteria to compare the best supplier for fuel and lubricants. However, exceptionally,
depending on the purchase volume some oil companies may give discount from their
margin.
DELIVERY SCHEDULE:
Fuel and lubrications delivery schedule emanates from the equipment operation schedule
and consumption rate. Once the weekly minimum and peak consumption is identified along
similar fuel consumption periods, project stock capacity and minimum safety stock volumes
shall be determined by properly assessing the opportunity and threat of the supply. Such
factors are delivery period as of order date, variation in delivery periods duration,
availability of other nearby sources and accessibility of site.

ORDERING & FOLLOW-UP

 Determine your weekly consumption.
 Know your fuel storage capacity.
 Know the lead time from ordering to supply.
 Consider the maximum and minimum quantity of fuel your supplier can send.
 Order amount of fuel you can receive considering the above points.
 Follow against, your stock, supply truck location and quantity of fuel your supplier
loaded.

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 Give notice to supplier if the process will result in stock out.

RECEIVING AND INSPECTION:

The most sensitive and critical part of fuel management is this inspection and receiving part
as the fuel delivery practice in most construction projects lacks honesty and is mischievous.
The cares that shall be exercised are listed below:

 First and foremost the underground fuel tanker shall be properly buried in a level
ground well protected against the adverse effect of pore water pressure and ingress
of water. Its volume shall also be properly calibrated to enable measure the volume
of fuel in the tanker at any time preferably every day at similar hour of the day after
delivery and always after the fuel reservoir tanker refill, though uncommon practice
in Ethiopia.
 A level paved platform shall also be prepared for the delivery fuel trucks stand. Every
fuel truck shall stand on this platform till the fuel carried within the truck stands still
and the fuel temperature reads close to the surrounding air temperature. This allows
accurate measurement of the fuel with the trucks dip-stick and determination of
adjustment factors due to temperature differences in accordance with the
calibration certificate of the truck.
 Prior to taking volume measurement quality inspection shall proceed. The first thing
to do is to assess availability of water at the bottom part of the truck tanker. This is
conducted by painting the dip-stick of the truck with a water finding paste, found in
the oil companies, which changes color when it comes in contact with water. The
normal color of the paste will be changed to reddish color when it gets water. If this
indicator shows availability of water underneath with its color change, part of the
fuel up to the estimated water level shall be discharged to separate barrels till the
water is completely removed.
 After complete removal of the water in the fuel truck is ascertained, Quality
inspection shall proceed with a special thermo-dense meter that measures the
prevailing density of the fuel with its temperature. This reading is correlated with the
standard expected fuel density reading to determine whether the fuel is acceptably

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pure or is mixed with other liquids. The most common offence is mixing kerosene to
diesel. If this reading indicates unacceptable fuel quality the finding shall be
immediately reported to the supplier and get advice from the same to take
appropriate action accordingly. No quality compromise is advisable as wrong fuels
can significantly damage construction equipment main parts and are main cause for
malfunctioning; big waste.
 Then volume of fuel, free from water, shall be measured with the measuring dip-
stick. Note that the measuring stick should be properly inspected to confirm the
measuring scale from Zero up to end is continuous.
 All the findings of quality inspection and volume measurement shall be marked in all
copies of the fuel dispatch form sent via the driver for the delivery.

RECEIVING

 Receiving of fuel should be done always in a committee.

 Parking the fuel delivery truck on the arranged level ground.
 Wait till the fuel standstill and cool down as per the waiting time given by the
supplier.
 Check if there is any water in the fuel at the bottom of the fuel tanker. If any
discharge it till you get fuel only.
 Check the fuel spec against the given standard by taking sample fuel from top,
bottom and middle of the tanker.
 If the fuel is normal, take measurement.
 Put the measurement on the invoice and both the receiver and driver should sign.
 Discharge the fuel from the truck to your storage Tanker.
 After finishing discharging of the fuel to the storage tank wait a while and take
measurement of the fuel in the storage tank.

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HANDLING AND DISTRIBUTION:

Fuel, as we all know, is flammable and volatile, hence for safety and evaporation control
purposes the fuel tank or reservoir is advised to be buried underground. This makes leakage
control difficult once the tanker is buried. Hence the only option left to trace unidentified
cause of fuel wastes is to conduct regular inventory, preferably on daily basis. It is also
advisable to be buried far from fire sources and along the wind direction to take away
breaths from the fire source. Distribution of fuel is also another important job to be done
properly. Redistribution of fuel shall be handled with proper fuel trucks having proper
delivery pumping mechanism and volume counter. Handling of fuel with barrels or other
containers make the fuel vulnerable for contaminations and spillage, volume loss. Fueling
time is also significantly extended when fueling is conducted with barrel and hose
combination. Which ends in excess equipment idle time, still wastage.

FUEL STORAGE TANK INSTALLATION

 Make it a bit far from bed rooms, kitchens, Electric transformer and garage area.
 Install it in safe area and avoid driving over the installed tankers.
 The underground tank should installed leveled ground.
 The manhole should be well protected and sealed to avoid water entrance.
 Install Fire extinguisher near the fuel tanker and dispensing pump.

DISTRIBUTION
 Into equipment
 Register –plate/serial no, Km/hour reading, qty of fuel delivered
 Register the consumption of fuel of the equipment
 Into site distribution fuel truck
 Take totalizer reading of the fuel dispensing pumps
 Fill the fuel to the distributing truck tanker and register.
 While supplying to machines and trucks at site, register plate/serial no.,
Km/hour meter reading and fuel consumption.

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 Stock control
 Take daily stock from both the main storage tank and distributing truck.
 To get realistic data, take measurement at the constant time of the day
and similar ambient temperature.
 Maintain standard minimum stock level
 Generate and report daily fuel consumption of the site and each
equipment.

LUBRICANT
 Based on the recommendation and specification of lubricant for your equipment;
List all types of lubricants required.
 Categorize the lubricants. Engine oil, transmission oil, hydraulic oil, greases, etc
 Select one or two types from each category and minimize the type of oil for
similar usage. Eg, one type of engine oil, one type of transmission oil etc if it
meets the recommendation of OEM.

ORDER
 Considering the consumption and delivery lead time and maintaining the
minimum safe stock place order.

RECEIVING
 Receive the product by checking, the specification, filling date and expiry date if
any, and also the capacity of the container.
 Write the type and spec of the lubricant on the container, to avoid misuse of
products if their label fades.

STORING
 Oils in drum should be stacked horizontally making both caps horizontal.
 Greases in drum should be stored vertically in sheltered area.
 Storage areas should be clean and protected.

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DISTRIBUTION
 There should be decanting and measuring cans.
 The decanting area should be clean and no dust at all.
 The drums should be placed on decanting rack and properly labeled.
 Should be distributed using proper issue vouchers.

USED OIL
 Used oil should be stored in a drum or in any other storage and be properly
disposed. Letting it everywhere contaminates the environment.

STORING AND HANDLING OF LUBRICANTS:

 Lubricants in drum should be stacked horizontally making the two drum caps at
180 degree horizontal to make the drums always closed and protected from
contamination.
 Grease in drum should be stacked vertically in indoor store. Rolling grease drums
to a long distance is not allowed as it separates the thickeners and oil. Dropping
grease from trucks to ground is commonly practiced in most places but it also
reduces quality of Greases.

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5.2 SPARE PARTS, EXPLOSIVE AND TYRES

SPARE PARTS
 Determine the type and qty of parts to be ordered based on the type and make
of your equipment.
 Identify fast moving items, service items and overhauling items
 Select genuine parts suppliers.
 Create proper and labeled stacking shelves which enable any one to identify
parts needed. Location, bin card, part number, Description.
 Determine the minimum quantity of service items to be stocked.
 Arrange proper used parts storage.
 Evaluate used parts. Reuse after minor repair, needs major repair, Dispose

EXPLOSIVES
 Determine the quantity based on the requirement on the respective project need
ahead of time, as most of the time it is imported from abroad.
 Select the products
 Arrange importation. Note that delivery period is relatively long.
 Arrange escorting of the product by Security Agency or Police from port to final
destination.
 Store Detonators isolated from other explosive components.
 Location of the store to be determined jointly with Security/police.
 Store locks key will be kept one with owner, one with appointed security
representative.
 Only usable quantity at a time will be issued from store based on the quantity of
drill holes arranged for the purpose.

TIRE
 Select the type and Brand of tires suitable to your fleet and arrange purchase of
same appropriately.
 For Best performance of Tire, store in cold and dark storage area before use.
 Register serial no.s to regulate and control tire consumption.

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 As there are companies recapping tires, regulate the wear rate not to exceed the
maintainable level for recapping and evaluate.
 Dispose used tires appropriately, by evaluating reusage and tender for sale of the
salvage.

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5.3 LOCAL MATERIALS

Local materials also have significant cost share in road construction projects; their proper
management has paramount significance.

REQUIREMENT ASSESSMENT:

Local materials volume best estimate is found from detailed working drawing. This detail is
produced after properly understanding the requirement, work scope, of the item as
demanded in the project contract documents; such as; BOQ, design drawing, specifications,
conditions of contract and other referenced documents or national or international
standards. Concerning local materials, the as-built (compacted) volume is usually quantified
in the BOQ and measured for payment. This volume state is also shown in the working
details. But it is clear that it is commonly produced from ground materials in bank state and
of course is moved in loose state. Therefore to properly quantify the required volumes
during each task; production, haul and placing, execution the volume change factors shall be
determined from lab test results. Unavoidable waste factors shall also be computed from
the working details taking into account existing achieved bottom level and targeted top level
inaccuracies, required extra widths to enable construct the required width as specified and
other common wastes.

SOURCING:

Proper source location reduces significant cost of local materials as hauling of these bulky
materials is the most expensive part of their costs. Hence identification of the most nearby
and hence cost effective source is important. To this effect detailed timely material survey
and laboratory testing is of high importance to conform discovery of the nearest available
suitable material as specified.

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PRODUCTION AND STOCKING:

Proper production care shall also be exercised to prevent contamination of the suitable local
materials with overburden soils and/or other adjacent materials of different character, with
special attention for materials fulfilling specifications marginally. Materials of similar
character shall be produced and stocked in preset lot sizes to enable conduct all required
tests as recommended to each lot and plan proper use of the material either clean or by
blending with others to optimize quality or for economic reasons. Local materials shall also
be stocked in a proper way to avoid segregation and attain uniform materials in the same
stock and also to enable deliver uniform material at the final destination of the material.

TRANSPORTATION AND DUMPING:

Loading of material shall also confirm uniformity of local materials, to this effect premixing,
wetting, of materials is advisable vis-à-vis availability of equipment and cost effectiveness.
improper dumping interval leads to excessive material wastage when interval is closer than
required and demands rework when the interval is wider, both having been manageable
wastes.

PLACING:

During placing proper care shall be exercised to properly process the materials; mix, place to
planned width & elevation, compact and finish. To this end the Engineer shall confirm the
availability of the required resources, skill and adequate working space and proper
controlling mechanism. This effort minimizes rework, extra un-required width & depth,
reprocesses; all wastes.

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6. MATERIAL MANAGEMENT CHALLENGES ON ROAD

CONSTRUCTION PROJECT

Materials management can be divided into five categories, for the purpose of discussing
challenges:
• The measurement and specification;
• The procurement and purchasing process where order is transmitted to the
supplier;
• Delivery to site and logistics of checking the order, off-loading and storing on site;
• The administrative and financial process of payment;
• Using the materials in production on the job site and removing the waste.
The most common challenges during purchasing and supply of materials are,
nonconformance of materials with the project need, forgetting ordering materials in time,
over or less materials delivery, early or late materials arriving, lack of JIT strategy, lack of
training and adequate management, lack of communication among contractor and supply
chain companies.
Some common problems on construction site are more obvious which are namely:
• Failure to order on time which delays the projects;
• Delivery at the wrong time which interrupts the work schedule;
• Over ordering;
• Wrong materials or error in conformance of materials requiring re-work;
• Theft of materials;
• Double handling of materials because of inadequate supply.
In terms of logistics, the main problems are untimely materials arrival on site or even wrong
quality, lack of information on materials arrival to the site or site stock, missing materials,
unavailability of storage space, waste of labor for materials searching on site and gap
between the procurement and ordering of materials and the delivery and use of the
material on site at the production stage.

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Achieving efficient material management is important and a site layout design that reduces
material travel time is very important in construction productivity. Poor planning leads to
inefficiency, low productivity, excessive waste, and health and safety problems. Supply chain
management is one of the most important solutions for improving productivity and
efficiency and preventing time and cost wastes. The term supply chain describes the supply
system from raw materials through to goods fixed in place. The linkage is through printed
documents, purchase orders, receipts, invoices and emails which outline the specification,
contract terms and delivery and customer details. The need for detailed information reflects
the trust and relationship between the parties in the supply chain. An effective supply chain
result to an efficient and productive project. Planning and controlling of raw materials,
components and finished products face some obstacles in supply chain management due to
poor communication and luck of feedback among the stake holders.
For a proper flow of materials of order up to installation on site, technical know-how and
proper decisions are indispensably important as of planning to selection of technology.
Planning is at the heart of having effective management systems to control materials,
irrespective of the project size; all projects must have a plan.

6.1 Challenges related to materials classification & ordering

There are multi-faceted problem in construction material management but with a realistic
analysis this could be worked out. Proper material handling, un-optimized service of haul
roads, use of ineffective technology and not using the right equipment are some sort of this
kind of problems. To properly supply the materials we should have a workable material
delivery schedule and understanding the specified quality of the different type of materials
supposed to be mobilized. This will help us to order the materials according to their sizes,
time of usage on site and other factors.
 Ordering system
What materials, quantity and location or distance to the site are the main issues in terms of
ordering and this information shall be clarified in line with the contract documents to the
extreme details possible. Classification materials into an ordering system are very
important. Classification can be in terms of size and essential rate to the construction
programmed and quality control.

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There are four ordering systems

i. Synchronized system
ii. Prescheduled ordering system
iii. Periodic ordering system
iv. Non-periodic ordering system
In synchronized system Ordering proceeds continuously in a scheduled way. Fuel supply in
road projects is better managed in synchronized system. The next step, big volume material
such as form work panels, reinforcement steel bars are usually delivered in a prescheduled
ordering system; these are not as big as the synchronized system. Such materials like
cement, gravel are supplied in periodic ordering system which normally is required at
various stage of the project. And at least the materials which are obtained at the
circumstance of the project and those are small volume and large quantity such as bolts,
nails supply are managed in non-periodic ordering system.

6.2 Challenges related to Site arrangement

Site arrangement plan shall first be developed suiting to the material flow of a working area
to effectively utilize the site, reduce process costs and minimize wastes. Material flow on
site is the process of moving materials from the site entrance through a set of function areas
to the final installation areas. This can be through a model such as the one suggested by
Tommelien (1994), which in these model six types of function area are recognized:
 Site entrances,
 lay down areas,
 staging areas,
 assembly areas,
 installation areas, and
 Wastes areas.

Lay down area is for the long term stacking area for main material still taken to be utilized.
For example stack yards for re bar steel or large panel formwork. For the frequency use of
material, if they are small volumes, it should be shared with the same area. For short term

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temporary storage ‘’ storage area’’ is suitable. An assembly area is the working area needed
when materials are being placed when they finally remain and wastes area is also needed
for the waste material. Site entrances should be connected to the outside road system.

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7. JUST-IN-TIME LOGISTICS IN THE SUPPLY OF CONSTRUCTION

MATERIALS

Normally construction materials are transported to the construction site as a part of the
purchase, and the price quoted is 'as delivered in whole truckloads'. This tempts the
purchase organization to save a few cents, which are easily lost by an unsuitably form of
delivery.
Studies of logistics show that a substantial increase in productivity can be obtained by
delivering construction materials on conditions laid down by the construction site, i.e. 'Just
In Time' and 'packed for the work process'. The additional cost by this approach can easily
be covered by the savings gained on the construction site.
Delivery of materials are seldom scheduled and manufacturers and wholesale dealers report
that express delivery is by far the most commonly used form of delivery when counted by
number of orders. When looked upon with the eye of the manufacturing industry the major
challenge for the construction industry is obviously to create order and control the order to
reduce costs through elimination of waste.

7.1 LOGISTICS IN THE MANUFACTURING INDUSTRY

Logistics, originally the 'Art of moving and quartering troops', are today a very important
means to increase productivity and flexibility in any manufacturing industry. The
manufacturing industry's logistics methods were originally developed primarily for the
internal logistics, but with the increasing distribution of the manufacturing processes the
focus today is as much on the external logistics and on the synchronization between the
parties in the supply chain. Two different principles can be identified: logistics by planning
(Material Requirement Planning) and logistics by consumption. The main difference
between the two is that by planning the foreseen consumption is calculated and materials
ordered and delivered accordingly, whereas by consumption the storage is filled up when a
certain minimum level is reached. For a number of years most logistics have been based on
one of the two principles only. Today a two level approach seems to be preferred: a
planning approach on the overall level and a consumption approach in the day-to-day

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operation.

A very special form of logistics by consumption is Just-In-Time (JIT) where minimum level
before fill up is close to zero and the order size for the part in question is near one. At the
same time emphasis is put on an overall planning carried out by the management combined
with a day-to-day operation undertaken directly from the shop floor. The JIT logistics were
developed by the Japanese automobile manufacturer system, Toyota, as an essential part of
The Toyota Production System. The basis of this system is the absolute elimination of waste.
The two pillars needed to support the system are:

 Just-In-Time and Autonomation (or automation with a human touch), Closer co-
operation with the suppliers and
 No error quality management systems are important elements of the Toyota
approach too (Ohno 1978).
It is these Toyota principles and primarily JIT - adapted for the construction process with its
one of a kind operation - that are used in the concept for the construction process' JIT
logistics - aims at reduction of cost through absolute elimination of waste.

7.2 LOGISTICS IN THE CONSTRUCTION PROCESS

The manufacturers' and wholesale dealers' logistics are very like the logistics of any
manufacturing industry or wholesale trade. Indeed they are to be considered as belonging
to such industries and to behave like such. If the contractors do not look out, their logistics
too will be decided by the manufacturers and the traders, who will minimize the cost of
transportation to the construction site without considering the following handling costs.

If on the other hand one looks upon today's logistics in the construction process from the
builders' point of view it is hard to find any strategy at all. As a matter of fact, the logistics
far too often seem to be based on the Oops! -Principle i.e., ordering and deliveries take
place when the production comes to a halt due to lack of the materials required. This means
not only frequent delays and loss of time but also additional costs caused by express
deliveries. Another strategy seems to be: 'get it as cheap as you can'. As delivery of

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materials is seldom scheduled as part of the construction process each delivery becomes an
unforeseen event added to the general disorder. Besides this it means that a lot of materials
are unnecessarily stored on the construction site, which is quite unsuitable for this kind of
operation. The result is interruption of work, extra handling, breakage and loss, not to
mention the requirement for not otherwise needed storage capacity.

7.3 THE JIT LOGISTIC CONCEPT

Inspired by the Toyota Production System the aim of JIT-logistic is to reduce cost by
eliminating waste of all kinds. For most waste of materials, but also waste of labor time and
transportation. In this the JIT-logistic concept is an instrument for making the whole
construction process more effective.
The main objective is to look not only at direct transportation costs but at all costs in the
construction process related to materials delivery. Materials are not considered delivered
until the workers lay their hands on them in the exact quantity as the first step in the
construction. Packing, temporary storage, on site transportation, on site losses and
breakage, and low effectiveness due to badly and impedingly delivered and stored materials
are all considered as belonging to the transportation costs.
Studies have shown that approximately a third of the time used by the worker on the
construction site is spent procuring his materials in the widest sense, equaling about 10
percent of the total construction cost. The hypothesis of JIT-logistic is that a near-optimum
form of supply will increase costs only marginally, but will reduce waste of time
considerably. This means that materials delivery in JIT-logistic is looked upon from the point
of view of an optimum construction process primarily. Integrated JIT-logistic makes use of a
two level logistics with a planning approach for the overall logistics and a JIT consumption
approach for the daily deliveries. The logistics are considered already on the drawing board.
Materials are, where it is possible, specified as belonging to the separate construction
operation during the detailed design. In the planning of the operations all supplies are
described in detail aiming at JIT i.e., supply once a day, comprising only materials needed
until the next day, and packed for the various trades and their individual tasks and work
areas.

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Efficient and systematic logistics following the ideas in the Integrated JIT-logistic concept
may lead to substantial improvement of the productivity in the construction process. More
than ten percent is not an unreasonable expectation, to which should be added substantial
savings in the materials costs. A total price reduction is therefore realistic. A similar
reduction of the construction price is harder to obtain because the benefits will be widely
distributed among all the participants in the job in question. Only when the Integrated JIT-
logistic principles are widely accepted within the industry and the concept implemented by
all the participants in the process competition will lead to price reductions. Even though
Integrated JIT-logistic has proven itself a strong and very efficient tool in practice it has a
number of pit falls which may lead to disappointment and lack of fulfillment of expectations.
Careful management implementation is mandatory.

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