Optimizing the Materials Management Process

For construction companies, the ability to move materials through the supply chain and to install the appropriate components on schedule can determine the success or failure of a construction project. Especially in the current industry environment, in which profit margins are tight and there is little room for error, construction business owners should consider using a fully integrated automated system for tracking and commissioning materials.

In all construction projects, labor and materials are the two largest cost categories, and are closely linked to each other. To deliver a construction project on time and on budget, contractors have to ensure that they have the workers with the right skill sets and the right quality and quantity of materials and equipment on site simultaneously. This also means that contractors must have the necessary cash flow and capital to procure the labor and materials at the right points in time. Purchasing materials too early can tie up capital, and lead to interest charges on the excess inventory, as well as storage costs. On the other hand, if materials are not delivered in time workers may be idle or unable to complete their assigned tasks. Ineffective materials management processes can thus lead to serious delays and significant losses of workforce productivity.

But even if materials delivery schedules are planned carefully, the overall project life cycle and costs can shift abruptly in response to a range of factors, including design changes, weather delays, shipping and receiving errors, inaccurate materials information, shrinkage due to inadequate storage, and unanticipated labor shortages. A single glitch in the schedule can set off a cascade of problems in other parts of the project, resulting in production delays and cost overruns. These pressures can be especially acute when prefabricated or modular construction components are being installed, or if a project requires the just in-time delivery of components because of a lack of adequate storage space on the job site. To ensure the effective coordination of materials with labor and equipment over the life cycle of a project, managers need to be able to track the real-time status of the materials that have been purchased and the timing of materials deliveries, and to monitor whether the components meet the quality and design specifications. Tracking and sourcing materials accurately and in real time can be difficult to achieve if the project team members are using different software applications, paper logs, spreadsheets, or paper or digital files that are stored in different locations. Even a small delay or error in updating the inventory of materials or a breakdown in communication can lead to delays and additional costs, and may be especially serious if the lead time for fabricating or delivering the components is long.

As the demand for better data coordination in the construction industry has grown, information technology-based control systems have been developed that integrate material and supply chain work processes, providing project managers and other team members with online information on components as they move through all of the project phases. Automated materials tracking systems can provide users with total visibility of all their construction materials at any location in the field, and in all weather conditions. These tracking systems generally employ a combination of sensor tags (barcodes, QR codes, RFID tags, and GPS), readers, mobile devices, and web-based software to allow users to track materials over the full life cycle of the project. Typically, the components are scanned and tagged by the supplier, and can be tracked as they make their way from the supplier to the project site warehouse and lay down yards, and are ultimately installed. While the tracking and commissioning of materials remains complex, automating these processes can help contractors avoid some of the potentially costly errors associated with the use of manual tracking systems, thereby reducing risk and boosting productivity and profitability.


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