Construction Materials Management_Lecture Slides E8.pdf

7/17/2019 Construction Materials Management_Lecture Slides E8.pdf

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EXTENDED MANAGEMENT:CIVIL I

MODULE EIGHT: MATERIALS MANAGEMENTLECTURER: JB NARTEY



INTRODUCTION

• Construction material costs form a large

percentage of production costs (60% - 40% of

total construction costs) and must therefore

be carefully selected, scheduled, transported,handled and controlled.

2



MATERIALS MANAGEMENT

OBJECTIVES

• To ensure continuity of the construction activities by meansof uninterrupted supply of materials.

• To find the most quality material at the most suitable price.

• To keep financial losses due to material losses and wastecaused by duplicating, over-estimation, obsolescence andtheft as low as possible.

• To find alternative reliable sources for purchases (supplies).

• To build up good relations with suppliers and other internalorganisations.

•

To maintain good relations with all departments inside theenterprise in order to reach maximum efficiency and co-ordination.

• To develop policy and procedures that will reach the aboveobjectives at the lowest possible (optimum) cost.

3



GOOD MATERIALS MANAGEMENT

BENEFITS

• Lower prices for materials

• Continuity of supply

• Reduced transportation cost

•Reduced material obsolescence

• Improved internal and external relationships

• Better control of quality

• Effective administration and unity of

organisational effort• Maintenance of adequate records and provision

of information for the operations manager.

4



CENTRALISED MATERIAL MANAGEMENT

• Only one(1) department( PurchasingDept.) at the head office is responsible for

materials management for the whole

organisation.

• Site office is used only for small material

items management

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CENTRALISED MATERIALS MANAGEMENT

STRUCTURE

7

CEO

ConstructionOperations

EstimatingDept.

PurchasingDept.

Plant &Equipment

Dept

FinanceDept

StoresDept

Site 1

Site 2

AdminDept



PURCHASING/BUYING DEPT.

RESPONSIBILITIES

• Purchase materials, plant and tools necessary forthe execution of the works.

• Procedure: – Prepare Material schedules-Master programme.

– Sending Enquiries-suppliers and sub-contractors

– Finalising quotations-suppliers and subcontractors.

– Quotation Evaluations/Cheaper alternatives.

– Selection of Supplier

– Placing of orders - suppliers.

– Prepare material delivery schedules.

– Re-information and feedback- finance/accountssection, computer section and site managers

8



ESTIMATING DEPT

RESPONSIBILITIES• Information supply /enquiries to suppliers

• Enquiries should embody all relevant information to enableaccurate quotations to be submitted.

• A list of firms to whom the enquiry is to be sent_ Company’s Supplychain policy

• Enquiries to suppliers information; – Specifications of the materials required.

– Quantity of materials required.

– likely delivery programme of the materials.

– Address of the site where delivery is to be made.

– Means of access to the site. – Any traffic conditions and restrictions affecting delivery to the site.

– Quotation Validity period

– Contact person & address - quotation enquiries.

10



ESTIMATING DEPT

RESPONSIBILITIES

• Estimator's evaluation of quotations

– The quotation complies with the bill of quantities andspecifications.

– The unit rates are consistent throughout the quotation.

– The rates are realistic and comparable with competitors.

– The quotation includes for preliminaries and attendances.

– The quotation complies with the terms of the maincontract regarding the payment period, retention and

defects liability. – There are no onerous conditions attached to the

subcontract.

11



ESTIMATING DEPT

RESPONSIBILITIES• Selection of Supplier

– It must be appreciated that the cheapest supplier might not always be the best or most suitable supplier.Therefore it is very important that the contractor careful scrutinise the selection of a supplier.

– The following factors must be taken into consideration:

• Previous experiences your Company and others have had with the supplier.

• Strength and stability of the business.

•

Experience as a supplier in the field of business.• How realistic the quotations are.

• Quality of the materials to be supplied.

• Consistent standards of the materials supplied.

• How and where the firm obtains supplies. (buy in or self-manufacturer).

• Discounts offered on Quantity purchased and Cash payments.

• Does the firm undertake to deliver?

• Reputation of the firm.

• Reserve facilities.• Location of the supplier in relation to the construction site.

• Internal facilities of supplier (well equipped; condition of stores, etc.)

• Labour relations (any unrest etc. labour policies and practices of the firm.)

• Single or multiple supplier.

• After sales service offered.

• Ability to expedite deliveries on time.

12



DECENTRALISED MATERIALS

MANAGEMENT

• Each department or construction site isresponsible for its own purchasing procedures.

• Each site or department to have a buying clerk

performing the purchasing duties as well asbeing responsible for the delivery, storage and

issues.

13



DECENTRALISED MANAGEMENT

STRUCTURE

14

CEO

ConstructionProject

EstimatingDept.

PurchasingDept.

Plant &

Equip

Dept

FinanceDept

Admin.Dept

C.M.

Site Agent

StorekeeperSite Clerk

(Buyer)

General Foreman

Trade ForemanTime

Keeper

Stores



SITE CLERK(SITE BUYING)

• Procedure; – Material Request_ Qty required and date required.

– Material Requisition

•

Qty required and date required.• sizes and quality, monetary figures allowable and

costing codes.

• signature of the requisitioner

–

Send material requisition to the purchasing dept. – Rreceive, check and sign a confirmation of delivery

for the materials ordered.

– Storage and distribution of materials

15



CLASSWORK

• DISCUSS THE ADVANTAGES & DISADVANTAGES

OF THE CENTRALISED & DECENTRALISED


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PLANNING

•

MATERIAL SCHEDULING –MATERIAL SCHEDULE

• BOQ/MASTER PROGRAMME

17





ORGANISING• MATERIAL REQUISITION( REQUISITION FORMS)

• MATERIAL ACQUISITION – PRICE ENQUIRIES/SOLICIT QUOTATIONS(PRICE QUOTATIONS)

– EVALUATE QUOTATIONS

– SELECT SUPPLIER

– NEGOTIATE WITH SELECTED SUPPLIER(PRICE DISCOUNT)

– PLACE ORDER( MATERIAL ORDER)

– MATERIAL DELIVERY SCHEDULES(MATERIALS DELIVERY BOARD)

– LOADING (ADVICE NOTE) – TRANSPORTATION(DELIVERY NOTE/WAYBILL)

– OFF-LOADING(DELIVERY NOTE/WAYBILL)

• MATERIAL STORAGE (MATERIALS RECORD BOOK/STOCK CARD/RELEASE NOTE)

• MATERIAL PAYMENT –

PAYMENT INVOICE – CHECKING OF PAYMENT INVOICE & DELIVERY NOTES

– PAYMENT AUTHORISATION

– PAYMENT

– PAYMENT CODING

18

MATERIAL MANAGEMENT



MATERIAL MANAGEMENT

CONTROL

• Requisition Form

• Quotation.

• Order

• Advice Note.• Delivery Note.

• Invoice.

• Release Note.

• Stock Card.

• Materials record book.

• Materials delivery board.

• Materials transfer notes

19

MATERIAL ACQUISITION




CONTROL

• Requisition Form

– Name of project.

– The task and cost code.

– A description of the item(s) required.

– The quantity required.

• This document must be signed by an

authorised person.

20



MATERIALS ACQUISITION

CONTROL

• Quotation.

–The document whereupon the

supplier submits a price at which hewill deliver materials as requested

by the buyer.

21




CONTROL

•

Order

• The document on which the buyer requests the supplier to deliver the materialsselected from the quotation.

• The document is the acceptance of the offer (quotation) and a contract thereforecomes into being between the buyer and the supplier.

• Order information: – The quotations reference number.

– The date the order is placed.

– The order number.

– The name of project or store requiring the materials.

– The address to which the materials must be delivered.

–

The name of the person who will receive the materials. – Date and time of delivery. (If materials are required at a specific time)

– A description of the item. (As per the quotation).

– The quantity required.

– The unit price.

– The total amount.

22




CONTROL

• Advice Note. – supplier issues to the buyer that goods have been

dispatched.

– This informs site staff to prepare for offloading and

storage. – Used extensively when goods are delivered by long-

distance eg by rail,sea,air etc

– Advice Note information:•

The order number.• The delivery address.

• A description of the item.

• The quantity.

• The method of transport.

23




CONTROL

• Delivery Note.

– Supplier's proof that the goods have been delivered.

– Delivery note information;

• The order number is correct.

• The materials are being delivered to the correct address.

• The materials are as per the description on the order and

requisition.

• The quantity being delivered is correct.• The quality of the materials is acceptable.

• Signature of the receiver

–

24



MATERIAL STORAGE

CONTROL

• Release Note.

– Issue of materials from a store to different sites or

projects.

– Release Note information:

• A description of the item.

• The quantity supplied.

• The cost code.• The signature of the receiver.

25



MATERIAL STORAGE

CONTROL

• Stock Card.

– Stock Control

– Stock card information:

• Code of item.

• Description of item.

• Re-order level. (Fast moving items such as nails, screws etc.)

• Name, address and telephone number of the supplier.

• Quantity to be re-ordered.

• Date of receipt of order.

• Quantities received and issued.

• Balance of items in store.

26



MATERIAL STORAGE

CONTROL

• Materials record book.

• Stock Control

• Materials delivery board.

– Material Delivery Schedule

• Materials transfer notes

– Material transfer to other sites

27



MATERIALS PAYMENT

CONTROL

Invoice.

– Supplier sends to the accounts/finance

department.

– Check Invoice against delivery note.

– If there is no discrepancy, payment will be

made.

28

/



STORES - OFF-SITE/HEAD OFFICE

• The stores department is usually a section of the

head office. – Materials are kept in stock and issued to the sites as

and when requested to do so.

• Storeman

– functions:

• Prepares requisitions for the purchase of stocks.

• Receiving of delivered goods.

• Coding, labelling and placing of such goods.

• Issuing of goods to site.

• Maintain & operate Material Control documents

• Send Material Control Documents to accounts/financedepartment.

29

STORES ON SITE



STORES -ON SITE.

OBJECTIVE

• Close to the point of use as is practically and

economically possible.

• Minimise time wasted, risk of damage, loss

and costs .

30

STORES ON SITE



STORES-ON-SITE

STORES ON SITE



STORES -ON SITE.

PLANNING

• Management’s degree of control.

• Solicit various viewpoints

• Practical and Economic solution• Set or develop a plan

32



MATERIAL DELIVERIES

• Material schedules.

• Material delivery schedules

33

MATERIAL DELIVERIES



MATERIAL DELIVERIES

LATE DELIVERIES_IMPLICATIONS

• Non productive labour teams• Non productive plant

• Delays on sections of contract

•

Penalty clauses actioned as a

result of latecompletion

• Productivity claims from subcontractors (labouronly)

It is therefore imperative for a contractor to

ensure that materials are delivered “on time”

when required.

34



MATERIALS_TRANSPORT

• Off-site – By sea; Long hauls, Lowest cost, Very slow, harbours and

other supported by other modes of transport( rail,air,road)

– By rail.; Long hauls, Second lowest cost , faster and canserve any centre-coastal or inland.

–

By air; Long Hauls, Very Expensive, Very fast – By road; Short Hauls(<300km), the most economical

• On-site. – wheelbarrows, dumpers, hoists, conveyors and cranes

– This is influenced by the site layout.

• In Stores. – forklift, cranes, wheelbarrows and conveyors.

35

MATERIALS TRANSPORT OFF SITE



MATERIALS TRANSPORT-OFF-SITE

BY RAIL,SEA,AIR

36



MATERIALS TRANSPORT-OFF-SITE

BY ROAD

37



MATERIALS TRANSPORT-ON-SITE

MATERIAL HOISTS




_CRANES

40



MATERIALS TRANSPORT-IN-STORES

41



BULK TRANSPORTED

43

/



PACKAGED/BAGGED TRANSPORTED

44

LOOSE TRANSPORTED



LOOSE TRANSPORTED

45



PALLET TRANSPORTED

46



PALLET TRANSPORTED

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SURPLUS MATERIALS



PROBLEM

• Surplus materials/material left overs on site

after completion.

• Problems;

– Cost of transporting/transfering surplus materials

– Sale of surplus materials_ losses

– Time wastage of both head office & site staff

48

SURPLUS MATERIALS



SURPLUS MATERIALS

_CAUSES

• Over-estimation of waste in the material

requirements.

• Material orders were placed on strength of an

over measured/estimated Bill of Quantities.

49

SURPLUS MATERIALS



SURPLUS MATERIALS

_REMEDIES

• Arrange for handing over materials to client and thecost for inclusion in the final account.

• When requesting materials check and double check'take--off" done for ordering purpose.

•If activity is nearing completion and more material isrequired, carefully check the quantity required tocomplete and check the actual waste factors to orderthe correct quantity.

• Do not leave the "taking-off" of critical materials to a

junior staff member or a clerk.• Never accept the Bill of Quantity as correct and do not

base your ordering on this document.

Construction Materials Management_Lecture Slides E8.pdf

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