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Study on Construction Materials and Machinery Losses Among Contractors in

Klang Valley

Article · March 2018

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 Study on Construction Materials and Machinery Losses
Among Contractors in Klang Valley

Nor Haslinda Abas*, Mohammad Syaifur Rohman Shomad**, Muhammad Fikri Hasmori, Rafikullah
Deraman, Abd.Halid Abdullah, Sasitharan Nagapan, Junaidah Jailani
*IBS Cluster, Jamilus Reasearch Centre,
Faculty of Civil and Environmental Engineering, Universiti Tun Hussein Onn Malaysia, 86400 Batu Pahat,
Johor, Malaysia
Email: nhaslin@uthm.edu.my

**Brem Maju Sdn. Bhd.

3rd Floor Brem House, No.12 Lorong Utara A, Off Jalan Utara, Petaling Jaya, 46200 Selangor, Malaysia

Abstract
Construction industry has a lot of uncertain risks compared to other industries. One of the many
problems that occur often in a construction project is loss of construction resources (i.e. materials,
machinery) due to many factors, for example thefts, vandalism, negligence etc. There are many
guidelines or checklist available focusing on site security to avoid materials and machinery loss
but it is believed that the study on the construction resources, particularly materials and machinery
loss in Malaysia is still lacking. Therefore, this study was conducted investigate the types of
experiences that construction contractors have had with the materials and machinery loss, together
with the counter-measures that had been done to reduce or eliminate them. Structured open-ended
interviews were done on construction personnel who were directly involved in the construction
projects around Kuala Lumpur and Selangor. A total of twelve (12) interviews were conducted
among construction practitioners of selected companies. The interview questions also included the
types of materials and machinery that frequently being lost on construction site and the way these
items were lost. The participants were also asked about their insights and opinions on reducing
these loss based on their experiences and propositions. From the interview analysis, the types of
materials and machinery that were frequently lost were attained. It is also found that, the
contractor often experience materials and machineries loss due to thefts and negligence. Some
solutions on preventing these losses were also obtained.

Key words: Construction sites, Losses, Construction materials and machinery losses, Site security

1. Introduction

Construction industry is an industry that has a lot of uncertain risks, compared to other industries. It is renowned
to be a high risk-industry which involves complex, time consuming design and construction processes characterized by
unforeseen circumstances. It requires a large amount of human skills, interests and the coordination of various areas and
different, relevant, and many activities.

Whenever a contractor undertakes a new construction project, there is uncertainty about the whether the project
will be completed within budget and on schedule or not. An effective contractor will generally be able to efficiently
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23
manage the resources given to complete the facility. Unfortunately, there are aspects of projects that are beyond the
controls of contractors. For example, the achievement of the project objectives can be jeopardized by the deliberate
efforts from others such as thieves. Thieves can directly impact the success of a project and lower the potential
profitability of the project that is being constructed. The costs of theft on a project are difficult to predict as these events
are somewhat random occurrences, but projects that falls victim to such losses could face major losses (Alias and
Hussin, 2002).

One of the problems that often occur in a construction project is construction resources (i.e materials, machinery)
loss due to theft and negligence. The loss of these resources at construction sites can occur when there is lack of
supervision, especially in conditions where strangers/public can easily enter and exit the construction site due to
improper site security. Negligence of the designated person who does not properly check the quantity of materials stored
and monitor the vehicles movement at the construction site can also result in theft and loss of material. Contractors will
get hit with the loss but eventually incorporate it into their cost of doing business. Thus, the cost of their construction
projects will increase.

Managing loss of materials and machinery on construction site in order to reduce or prevent the loss is extremely
crucial because contractors are exposed to this risk, and it is their duty to handle all resources from delivery to the point
of installation. For the examples, the manufacturers or suppliers of the construction materials (e.g. cement, aggregate,
timber, backhoe, bulldozer, excavator, etc.) usually produces or delivers the materials in different shapes, sizes, weight
and quantity. Therefore, the contractor should know how to avoid the materials and machinery loss in order to maintain
profit

Besides that, contractors often perceive the loss of materials and machinery on construction site and it is
unavoidable. They may implement common theft and negligence prevention safety measures such as guarded storage
area to the alleged safest loss-control measure which is insuring the materials and other resources to the insurance
company. However, it is important to note that, though insurance may offset some of the financial loss, many uninsured
costs (which include insurance deductibles, production delays, paperwork and time reporting and replacing stolen
materials) are paid by the contractors and sub-contractors themselves.

While there are many guidelines or checklist available focusing on site security to avoid materials and machinery
loss, it is believed that the study on the construction resources (i.e. materials and machinery) in Malaysia is still lacking.
Even though there is one particular study on the risk management application for handling thefts (Alan and Rees, 2004),
it only focuses on the materials resource and did not further investigate to what extent the materials had lost.

Therefore, the questions that arise in that:

1) What are the types of construction materials and machinery that frequently being lost on construction
site?
2) In what way the materials and machinery have been lost on construction site?
3) What are the solutions in reducing the loss of construction resources due to theft and negligence at
construction site?

This paper describes a study that was undertaken to determine the types of experiences that construction
contractors have had with theft, together with the counter-measures employed to reduce or eliminate loss, by adopting
the work of Berg and Hinze (2005). This is valuable as by sharing those practices that have proven to be successful for
some contractors, the construction community might be able to reduce the losses.

2. Literature Review

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24
 The process of starting a project up to its completion is time consuming. This has made the construction project
become more risky and require a more comprehensive effective technique to avoid materials and machinery loss due to
theft and negligence (Flanagan and Norman, 1993). In a developing country like Malaysia, there are many large-scale
development projects currently underway that take long time to compete, such as Mass Rapid Transit (MRT), high rise
building, residential projects and so on. The risk of losing materials in construction will occur in everywhere and at any
time, depending on the type of decisions taken and made, which normally serves as a guide for losses (Berg and Hinze,
2005).

There are many of material and machineries in site that are risky for losses such as aggregate, Portland cement,
steel, plastic pipe, crusher run, steel or reinforcement and for machineries such as dump truck, excavator, and mixer
truck.

There are two main factors of materials and machinery loss on the site which are theft and negligence. These
factors are commonly occurring at construction site. Materials and machineries loss due to theft often occurs on
construction sites (Berg and Hinze, 2005). The employees can easily retrieve materials from construction sites without
being noticed by anyone due to lack of security measures. Materials loss due to theft often occurs on construction sites.
The employees can easily retrieve materials from construction sites without being noticed by anyone due to lack of
security measures.

There are some common measures to prevent losses of construction materials such as fenced area, proper storage
at construction sites and adequate lighting. Theoretically, by building a fenced area to isolate the construction materials
is necessary to prevent theft and is deemed as the easiest method to avoid materials loss. Fenced area serves as the
boundary between the areas of construction work with the public. This method is popular among contractors to prevent
the loss of construction materials. Generally, there are two types of stores typically used by the contractors in Malaysia
as storage of construction materials, which are closed-store and open-store. Proper store is of closed-storage type,
which is a small covered area, in contrast with the open-storage that has no roof and walls (not covered). Ironically, not
every contractor builds the store as a storage area for construction materials. Some contractors provide the store only to
protect material from the exposure to rain. Lighting system is very important to ensure that construction sites safer.
Good lighting can prevent theft at night. This is because thieves usually prefer to steal at night after work. Lighting
around the roads, storage of materials, and the border area of the construction project will prevent intruders go inside at
site construction, especially at night.

3. Methodology

This study employs structured interview with construction project contractors to attain information about the
experiences they have had regarding the materials and machinery loss at their sites. The purpose of using the structured
interview is to ensure that each interview is presented with exactly the same questions in the same order. This ensures
that answers can be reliably aggregated and that comparisons can be made with confidence between sample subgroups
or between different survey periods (Marican, 2005).

The participants of the interview were several construction companies who actively involved in a construction
projects surrounding Kuala Lumpur and Selangor. A total of twelve (12) interviews were conducted on construction
practitioners of the selected companies. The interviews were conducted on the construction personnel of the company,
who involve directly in the project and have the capability to answer the questions. The interview questions were
divided into two parts, which are: i) Part A - Respondent’s background; and ii) Part B - Types of construction materials
and machineries that are frequently lost on construction site, the way these materials and machinery are lost, and the
solutions in reducing the loss of construction materials and machinery on construction site.

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25
4. Results and Discussions

4.1 Background of Interviewees

The interviews were conducted on professional individuals assigned by the companies and were capable to
provide the information required related to the study. The selection of the interviewees were on the individuals who
involved directly in the projects, have had experiences in the construction projects and were capable to provide
appropriate answers and justifications to the interview questions.

The demographic profile of the interviewees is shown in figure 1. Most of the interviewees interviewed were
among site engineer and project manager. Besides that, ten (10) interviewees had academic qualification of Bachelor’s
Degree and the remaining hold Diploma qualification. With regards to the years of experience, majority of the
interviewees have working experience at least 5 years.

From the analysis, it is believed that the information related to interview questions provided by these
interviewees would be reliable because they are currently hold the managerial position and have had adequate
experience to share their knowledge and experience about the loss of materials and machinery at construction sites, and
opinions to overcome the problem.

Figure 1: Profile of the interviewees

4.2 Background of the Companies (contractors)

Table 1 shows the background of the participating construction companies, with regards to the CIDB’s
registration and types of the contractors’ specialization. Of the twelve (12) companies interviewed, five (5) companies
were from Grade7 (G7), two companies from Grade 4 (G4), Grade 3 (G3) and Grade 1 (G1); and one company from
Grade 2 (G2). The interviews were done on six (6) companies that specialized in civil engineering construction (i.e.
water supply works (water treatment plant and distribution line), civil engineering structure, civil engineering
maintenance works,), civil engineering structure, road and pavement construction, excavation), whereas five (5)
companies that specialized in building construction category (i.e. steel frame system, building general work, concrete
repair work, paint work and roof installation) and one (1) company from mechanical and electrical category. The annual
volume of work for every company are also shown.

Company CIDB Annual volume Contractor’s Specialization

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 Contractor’s of work (RM)
Classification
A G7 20M Civil Engineering Construction (Water supply works, water
treatment plant and distribution lines)
B G7 50M Civil Engineering Construction (MRT station)
C G7 300M Civil Engineering Construction (Development of cathode
graphite plant)
D G3 700K Building Construction (Steel frame system)
E G2 100K Civil Engineering Construction (Excavation)
F G7 2M Building Construction (House renovation and building
construction)
G G3 50M Building Construction (Building general works)
H G7 7.5M Civil Engineering Construction (Civil engineering structure)
I G1 150K Civil Engineering Construction (Road and pavement
construction)
J G4 300K Building Construction (Concrete repair work, paint work, roof
installation)
K G1 500K Building Construction (Building general works)
L G4 1M Civil Engineering Construction (Road and pavement
construction)
Table 1: Background of the Participating Construction Companies

4.3 Types of materials and machinery that are frequently lost at construction site

From the interviews, mostly, the type of materials that had always went missing on construction site was steel
reinforcement bar. This could be seen in figure 2 where 92% of the participants stated that they had experienced the loss
of reinforcement bar. It is believed that steel reinforcement bar is popular because it can be sold back at a higher price at
scrap metal shop. This is followed by cement bag and formwork (33%), PVC pipes, raw materials (sand, aggregate, etc.)
and cable wire.
Information regarding the average loss of materials per incident was also obtained from the interviews, as
summarized in figure 3. Eight (8) participants indicated the average material losses per incident were ranged between
RM 0 to RM 3000, one (1) participant between RM3001- RM 10000, two (2) participants from RM 10001- RM30000
and one (1) participant indicated the average material losses per incident were ranged more than RM30000. The highest
average loss of materials per incident recorded was RM30, 000 (Company A).

Figure 2: Types of materials that are frequently Figure 3: Average losses of materials per incident
loss at construction sites (materials)
Meanwhile for machinery, three (3) participants stated that they have not experienced the machinery loss for
their projects. From figure 4, two (2) participants indicated that they have experienced the loss of both of compactor

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27
machine and drilling machine. Other than that, one (1) company have experienced the loss of machinery for mixer truck,
excavator, backhoe and compressor.

With regards to average machinery loss per incident (see Figure 5), the highest average loss of machinery
recorded was RM100,000 which was from Company C and F. The higher amount of loss value for machinery was
mainly because the types of machinery lost was expensive. Taking Company C and F for example; Company C has
experienced the loss of hacker (2 nos) and welding set (2 nos) in 2014, whereas Company F has lost compactor
machine. The market price for hacker and welding set are RM2500 and RM2200 respectively. The price of compactor
machine is RM7800. From the data, two-third of the participating companies had experienced loss of machinery.

Figure 4: Number of machinery loss Figure 5: Average losses per incident (machinery)

4.4 The way the materials and machinery are lost on construction site

The interview was also done to obtain the information related to the ways the material and machinery were lost
on construction site. From the interviews, the main problems faced by the construction firms with regards to the
construction materials and machinery loss was due to theft and negligence. From the information obtained, ‘thefts’ was
the main factor encountered on the loss of materials and machinery, compared to ‘negligence’. Eleven (11) participants
stated that they have experienced theft that cause the material and machinery lost, whereas only eight (8) firms
experienced negligence. From this number, six (6) firms have experienced both theft and negligence that lead to the
loss.

4.4.1 Thefts

From the interviews, eleven (11) out of twelve (12) companies have had problems on materials and machinery
loss due to thefts. This means that more than 90% of the participants had problem in thefts that lead to the loss. It is
often alleged that employees are probably the thieves on many projects. However, not all participants of the interviews
shared this sentiment. Most of the interviewed companies did not feel their employees or former employees were
prominent perpetrators of thefts on their projects. Only two (2) participants stated that the thefts were done by their
workers. For instance, interviewee B stated that: “Some workers steal rebar and electric cable….they bring back [to
their home] and sell [the rebar and electric cable]”, whereas interviewee I stated that: “Some workers take the waste
steel reinforcement bar and sell it”. However, the thefts were also due to outsiders, as indicated by Interviewee C: “HT
cable that have completely done, were stole at night. Two (2) drum units of HT cable [were] stolen through forest
roads.”

When asked whether they reported the thefts incidents to law enforcement, two-third of the participants indicated
that they did reported the incidents to the law enforcement body such as police; whereas the other four (4) firms stated
that they have never reported the incidents. There were also some indicators or requirements for the companies to report
the thefts incidents, which depend on the amount of thefts (whether in RM or quantity of loss). For instance, interviewee
I stated that: “….. if [the amount of loss (due to thefts)] is more than RM1000 ….., it is compulsory [to] do the report

Vol. 4, March 2018 Asian Journal of Technical Vocational Education And Training (AJTVET)
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and …..if less than RM 1000, it depends on situation but normally does not have reported to the police”, whereas
interviewee B stated that they report to the police for major loss of materials and machinery only.

Majority of the participants stated that stolen item were never recovered, whereas three (3) participants
provided uncertain answers on this question. For example, interviewee D stated that some items were recovered but only
a little amount of it if compared to the amount of loss. There was a company who retrieved the amount of loss from the
insurance company, for example, interviewee A stated that: “Stolen item [have] never been recovered back and only
replaced by using the money from the insurance company”.

4.4.2 Negligence

The results showed that eight (8) companies (66%) had experience negligence that lead to the loss of
construction materials and machinery at their sites. With regards to negligence, the contributing factor was mainly due
to: “poor supervision controls that, normally those tools will leave on site after work”, as stated by Interviewee B.
There was also response from interviewee who relates the act of negligence by workers to cause thefts, for interviewee J
stated that: “Most of the times, the driver of dump truck left the key on the truck when not in use to make their work
easier, but this behaviour can cause thefts”.

Further analysis on negligence type of loss is not necessary because it relies heavily on human being (worker’s
fault), therefore questions whether they reported the incident or whether they recovered the items lost due to negligence
were deemed inappropriate.

4.5 Solutions in reducing the loss of materials and machinery at construction site

The interviews were also ask participants’ opinions about measures that can be used to effectively reduce
construction materials and machinery loss at construction site. Firstly, the respondents were asked to list down all
security measures they used to prevent the loss. A number of practices were employed. The breakdown of responses is
shown in table 2. Mostly, all measures listed were the types of security measures utilized at their sites.

Security measure Company using security measure (%)

Security guard system 58
Supervision 50
Fence the area (hoarding) 33
Security camera (CCTV) 25
Storage area 25
Proper record (checklist) 17
Table 2: Security measure in reducing materials and machinery loss

From the analysis in table 2, it could be seen that, about half of the interviewed companies used security guard
system and supervision by workers as their preventive measure. Other measures include hoarding, CCTV and proper
storage area. The least popular utilized measure was checklist for proper record of the materials and machinery. This is
mainly because this measure could only benefits in terms of obtaining the amount of materials or machinery in and out,
which is more reliable to avoid negligence, rather than preventing from thefts.

Meanwhile, for the more popular types of measures e.g. security guard and fencing, it is deemed that these
measures were intended to prevent thefts. This was probably due to the higher number of thefts incidents at site that lead
to the loss of construction materials and machinery loss, as discussed in 4.4.

Deeper analysis on the types of security measures employed on construction site revealed that, the expensive
types of measures were usually used by Grade 7 companies, whereas Grade 4 and below usually use inexpensive ones
that rely much on the supervision and recordkeeping. This is mainly because the Grade 7 companies’ usually undertaken
construction projects that worth much higher value than the lower grades.

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29
 The results also revealed that there were several measures or approached employed by the participating
companies which specifically intended for preventing machinery loss. The list is provided in table 3. These include
securing machinery in fenced area, parking of equipment and machinery in well-lighted area, securing machinery with
chains and lock. From the list, it could be seen that the measures employed were mainly to prevent from machinery
thefts.

Preventive measures Company using measure (%)

Securing machinery in fenced area 25
Parking of machinery in well-lighted area 17
Securing machinery with chains and lock 8
Mark machinery by using a distinctive color 8
Installing the track device at machinery 8
Table 3: Measures used to prevent thefts of machinery

When asked about the participants’ opinions on the best solution to prevent construction materials and
machinery loss due to theft and negligence, a list of approaches was provided, as shown in figure 6. From figure 6, it
could be seen that four (4) interviewed participants perceived that security guard system as the best solution in
preventing loss of materials and machineries. This is followed by proper record and supervision, monitoring daily
activity, and proper storage as best method in reducing loss of materials and machinery with two (2) each. Other
measures include fence the area (e.g. hoarding) and do checklist of materials and machinery with one (1) participant
perceived these as the best solution.

2 2 2
1 1

Security Proper Monitoring Proper Fencing area Do checklist

guard Record And daily activity storage
Supervision

Figure 6: Best solution to prevent material and machinery loss

Apart from that, participants were also asked about the use of project layout decision to prevent the loss of
construction materials and machinery. This is because; project layout decisions can directly influence or impact job-site
security (Berg and Hinze, 2005). Some examples of project layout decisions strategies that could discourage the loss of
materials and machinery are “placing the machinery and materials in well-lighted area, utilize and locks the boxes for
tool and machinery, storing machinery and materials away from public access and out of view, placing trailers so doors
face the road, storing containers so they are positioned in lighted area and close to the office, etc. (Berg and Hinze,
2005)”.

The results showed that ten (10) companies agreed that project layout can prevent loss of materials and
machinery. One company stated that project layout does not help anything for prevent loss of materials and the other
one was not sure the whether project layout can prevent loss of materials and machineries at construction site.
Interviewee C stated that: “Project layout is among the best solution to prevent loss of materials and machineries, but it
would be ineffective if the thief is among the worker”. Meanwhile, Interviewee I stated that “Project layout can help
prevent the problem of loss materials and machinery because it can help managing the work, arrange the storage with
raw materials and machinery and it can help to prevent loss of materials and machineries.”. Other than that,
Vol. 4, March 2018 Asian Journal of Technical Vocational Education And Training (AJTVET)
30
Interviewee L stated that “It [i.e. project layout] can do some checking in construction site, that’s why it can prevent
loss of materials and machineries”. Hence, it can be concluded that the majority of the participating companies agreed
that the project layout can make preventive for loss of materials and machineries due to theft and negligence.

5.0 Conclusion

More than where 92% of the participants stated that they had experienced the loss of reinforcement bar. It is
believed that steel reinforcement bar is popular because it can be sold back at a higher price at scrap metal shop. This
material easy to bring with higher weight to sell back. The second and third higher type of material loss were cement
bag (33%) and formwork (33%) participants stated that they had experienced this types of materials easy loss at
construction site. This is followed by PVC pipes, raw materials (sand, aggregate, etc.) and cable wire. The most popular
machinery that frequently losses on construction site were compactor machine and drilling machine with two (2)
participants stated that they had experienced loss for these each type of machinery. This is followed by mixer truck,
excavator, backhoe and compressor machine with one (1) participant stated that they had problem for these each types
of machinery.

From the interviews, the main problems faced by the construction firms with regards to the construction
materials and machinery loss was due to theft and negligence. From the information obtained, ‘thefts’ was the main
factor encountered on the loss of materials and machinery, compared to ‘negligence’. Eleven (11) out of twelve (12)
participants stated that they have experienced thefts that cause the material and machinery lost, whereas only eight (8)
firms experienced negligence. From this number, six (6) firms have experienced both thefts and negligence that lead to
the loss. In conclusion, the loss of materials and machinery occurs when there is lack of monitoring of site workers;
inappropriate storage of materials and machinery; and unsafe site conditions that allows easier entry and exit for
stranger.

There were numbers of security measures employed by the participating companies in preventing the loss of
materials and machinery due to theft and negligence at construction sites.. From the analysis in, it could be seen that,
33.33% interviewed companies proposed security guard system as the best solution in reducing loss of materials and
machineries. This is followed by proper record and supervision, monitoring daily activity, and proper storage. Other
measures include fencing area (hoarding) and do checklist materials and machinery with 8.33% propose this as best
solution.

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