What is construction materials management, and why is it imperative for specialty contractors to control it?
Construction materials management (CMM) is a core function of supply chain management and, as we all know, crucial to successful and profitable projects. It involves planning and executing supply chains to meet the objectives and requirements for project delivery to all construction firms. These requirements include controlling and regulating material flow while simultaneously sourcing, purchasing, receiving, storing and using construction materials. It is a critical component of any construction project, as it can have a significant impact on the project's cost, schedule and quality.
Construction material and purchasing managers assess the units and cost of material required and held in inventory. They also plan schedules for stocking and inventory levels for each item, including raw material, work in progress or finished goods. Communicating information and requirements to procurement operations and the extended supply chain is a critical objective. Purchasing and materials management also involves:
Assessing material quality to meet customer requirements
Achieving the lowest cost
Meeting deadline-driven project schedules
Material management embraces all of the activities related to materials and is an essential business function that benefits every project and most likely includes equipment and machinery.
Typical roles in materials purchasing and management include inventory analysts, inventory control managers, materials managers, material planners, expediters and hybrid roles like buyer/planners.
Regardless of role, materials management's main objective is to ensure a seamless supply of material, optimized inventory levels, minimized deviation from planned.
The 5 Rs...
Common objectives for construction material procurement managers include the 5 Rs:
Right material
Right time
Right amount
Right quality for price
Right quality for resource
Now, let's dig into the types of material management and work performed by material purchasing and management experts.
1. Construction material requirements planning
Planning is a critical step in material management and directly affects profits to mitigate waste, which is why prefabrication and manufacturing are rapidly taking shape in construction. The lower the amount of materials used translates into lower production costs, increasing potential profits for the same job. Amazingly, purchasing and material management software is ubiquitous since it can help reduce overspending on materials. One method of planning to minimize inventories is "just in time" material management that requires minimal inventory levels, but still requires careful planning to maintain without impacting production schedules.
2. Construction material purchasing
Going hand-in-hand with material planning, material purchasing is ripe for leveraging software that can automate several workflows in the office and field and can be done economically and on schedule to maintain supplies and increase final profits by lowering expenses.
3. Warehouse and inventory control
An inventory can include holding a range of materials relevant to the type of construction firm. Inventory can consist of materials ready for production, sale or finished items production-ready. Gauging supply and demand ahead of a project delivery roadmap is a challenge. With the shortage of materials and labor, construction firms need rapid-fire technology to help procure materials by expanding their supplier network should sourcing become a challenge and delay start dates or slow down projects underway.
Controlling the flow of raw materials, purchased goods and finished parts require inventories to work effectively for a construction firm.
4. Construction material supply management
Supply chain management requires materials and products to be distributed to different sites or production centers; each needs to be fed. Production schedules can only be met if there's inventory or that construction firm can experience substantial financial losses.
Material disruptions can be caused by poor storage, lack of supply, antiquated processes for tracking and management; however, many situations can be mitigated if purchasing and material management teams consider advanced technology for automating workflows that enable better connections to alternative suppliers and their systems. In addition, purchasing and material management software is easy to set up and takes the guesswork out of supply chain management.
5. Material quality control
Quality control of materials is also essential since suitable quality materials lead to good quality products. Depending upon the applications, dependability, durability, performance, reliability, dimensional accuracy and aesthetic value can all be essential quality factors for quality control in materials management.
All five of these types of material management coexist to manage materials from purchase and supply to utilization successfully for a construction firm.
What do construction purchasing and material managers do?
The overriding aim of construction material managers is to maintain a consistent flow of materials for production at a profit; however, there's a host of challenges that involve several stakeholders, including but not limited to shipping and receiving issues, bills, POs, Invoice matching and inaccuracy, errors in stock-taking, unreported scrap and production reporting issues. Yes, the list is much longer.
Construction materials can usually be classified as either direct or indirect materials. Direct materials are required for a finished product, while indirect materials do not generally generate a finished product.
Inventory management, in either case, is a vital aspect of material management. This breaks down into three factors:
Maximum stock levels mean the maximum amount of material held in stock at any given time.
Minimum stock levels are in flux during production or construction; therefore, there is crucial to ascertain minimum stock levels that consider supplier delivery times, cost of the orders, and production requirements.
Point to re-order is when orders should be made to align warehouse supplies with supplier delivery times and production schedules.
Why is it Important?
Materials management is vital to ensure an unbroken chain of materials for production purposes to meet customer demands. Not only does it make sure to meet production schedules, but also crucial for saving costs for finished products while maintaining high-quality standards.
Materials management integrates purchasing, logistics, and inventory management and is vital for processes reliant on raw materials, machinery and maintenance.
Construction materials management uses inventories and production requirements for planning and control to ensure the required materials are available to meet project schedules. Yet, the individuals in these roles still rely on antiquated processes to coordinate logistics, inventory, material quality control and costs. Today, affordable technology that's easy-to-use is available to handle these complex processes with multiple stakeholders to get everyone on the same page. With just a few clicks of a button, subcontractors can streamline the entire materials procurement process by bringing your field, office, accounting, warehouse and suppliers, onto one collaborative platform — all without the help of an IT department.
