Supplies of Materials

Material Schedule

 A material schedule is a comprehensive document that outlines the project’s scope,

deliverables, resource requirements, and deadlines. It serves as a blueprint for project
execution, allowing stakeholders to understand the project’s timeline and resource
needs
 Material schedules are essential for effective project management. They enable
project managers to allocate resources optimally, anticipate potential bottlenecks, and
mitigate risks. A well-crafted material schedule ensures project teams are aligned,
stakeholders are informed, and project objectives are achieve

Benefits of Using a Material Schedule in Construction

 Avoid Material Shortage: One of the biggest benefits of material scheduling in

construction is that it can help avoid material shortages. If you have a material
schedule, you will know exactly how much of each material is needed and when it
will be needed. This can help avoid construction delays due to material shortages.
 Better Project Management: Another benefit of material scheduling in construction is
that it can help with project management. Having a material schedule can help you
keep track of all materials used during the construction process. This can be helpful
when trying to stay within a budget.
 Improved Communication: Material scheduling in construction can also improve
communication between the project manager and the construction workers. By having
a material schedule, the project manager can easily communicate to the construction
workers what materials are needed and when they will be needed. This can help avoid
construction delays due to miscommunication.
 Accurate Cost Estimates: Material scheduling in construction can also help with
creating accurate cost estimates. By having a material schedule, you will know the
exact cost of all materials needed for the project. This can help you stay within your
budget and avoid any cost overruns.
 Ensure Quality Control: Another benefit of material scheduling in construction is that
it can help ensure quality control. Having a material schedule allows you to easily
 track all materials used during the construction process. This can help you identify
defective materials and ensure that only high-quality materials are used in the
construction project.

Components of a Material Schedule

A material schedule comprises several key components that collectively define the project’s
structure and requirements.

a. Project Scope and Deliverables

The first step in creating a material schedule is defining the project’s scope and deliverables.
This includes identifying the objectives, desired outcomes, and any constraints or limitations.

b. Resource Requirements

Next, the material schedule must specify the resources required to execute the project. This
encompasses personnel, equipment, materials, and any other assets necessary for successful
completion.

c. Timeframes and Deadlines

Accurate timeframes and deadlines are critical in material scheduling. Project milestones,
task durations, and dependencies must be clearly defined to ensure timely completion and
efficient coordination.

d. Budget Allocation

Effective budget allocation is another crucial aspect of material scheduling. It involves

estimating costs, allocating funds to various project activities, and monitoring expenditure
throughout the project lifecycle.
Procedure for Creating an Effective Material Schedule

Crafting a well-structured and realistic material schedule requires careful planning and
attention to detail. Here are the steps involved in creating an effective material schedule:

1. Gathering Project Information

Start by gathering all relevant information about the project, including scope, objectives,
resource availability, and stakeholder expectations.

2. Identifying and Prioritizing Tasks

Break down the project into smaller tasks and identify their dependencies. Prioritize tasks
based on their importance and urgency to ensure a smooth workflow.

3. Allocating Resources

Assign resources to each task based on their skill set, availability, and expertise. Ensure
resources are allocated optimally to avoid bottlenecks or overburdening specific team
members.

4. Setting Realistic Deadlines

Establish realistic deadlines for each task, considering potential delays, dependencies, and
resource availability. This helps manage expectations and keeps the project on track.

Monitoring and Adjusting the Schedule

Regularly monitor the progress of tasks and compare them against the schedule. Make
adjustments as necessary to accommodate unforeseen circumstances or changes in project
requirements.

Category materials

i. Standard Materials
 Standard materials are those commonly used are which are readily available from
published sources. These may include

 Conduits
 Trunkings
 Cable trays
 PVC wiring cables
 Distribution boards
 Etc

Prices of the standard materials are obtained either from manufacturers, suppliers or
catalogue price lists or from local price books.

Prices are normally based on certain quantities and the estimator must always check whether
there will be any less charge on this price due to short lengths, broken parts or minimum
order value (less than ordered)

The prices published are usually the net trade prices and contractors often obtain a discount
on these prices.

= Materials paid within one month =1/2 of discount

=One week of purchase of materials =3/4 % next price (The price after discount is given)

Materials from Own store

While majority of materials are purchased and delivered direct to the site, some materials
may be supplied direct from the contractors own stores. These materials may have
been purchased sometime before at a price lower than the contract price.

The inclination of the estimator will be to use the lower price as this would give him an
advantage to his competitors. This ignores that costs which the cost has incurred in
storing the materials. These costs includes:

- Maintaining the store staffs

- Finance charges and insurance

Costs may also have been incurred dues to deteriorations and breakages of some materials.

The contractor has to transport materials to the site.

Special Materials

Enquiries have to be sent to suppliers. Writing quotation for special materials, the prices
involved is considerable.

The enquiries should be sent as soon as the contract is deemed to have an element of
special materials as there may be delay in obtaining the prices.

Obtaining Quotation
 Enquiries For quotation should

i. State the date by which the quotation is required.

ii. State clearly the quantities and type of materials
iii. Give the specification of the materials
iv. State whether fluctuation or fixed price is required and if fixed, for what period.
v. IF appropriate, the estimates should ask for the weights and dimensions of the
materials given the specifications.
vi. State the conditions of contracts under which the contract is tendering.

Checking Quotation

Upon the receipt of supplier’s quotation, they must thoroughly checked to see that in every
way they satisfy the details given in the inquiry.

Any ambiguities in the quotation or any apparent deviation from the information given in
the inquiry should be brought to the attention of the supplier immediately and the
clarification made.

A standard practice should be for estimator having checked the quotation to his
satisfaction to write on the front page ---Checked and found correct, adding his initials and
the date. This signifies that he is satisfied as to:

a. Quantity – as given in the enquiry.

b. Quality- as per specification
c. Delivery as per the programme
d. Conditions -as per suppliers conditions of safe and acceptable
e. Arithmetic- Has no errors in the extension, addition and calculations of parts as shown
in the quotation

Incorrect Quotation

The estimator should notify the suppliers of the correctness or errors in the quotation eg.
In addition, calculations etc on receipt of the quotation so that the errors may be corrected.

On the sale of good contracts, there is a part that states that the supplier can claim ;- Incorrect
quotation from the estimator the disclaimer.

Sometime amongst a group of quotations will be one which is substantially low than others.

The temptation will be to use this without question even though the estimator feels sure that
the supplier has made an error. This is wrong and will only rebound on the estimate.

This is because most suppliers in their conditions of sale have a claim disclaiming the error.
Or stating that goods will be invoiced at the prices ruling and date of dispatch.
The estimator will not benefit in any way from using the incorrect quotations as probably
have the same quotations.

Materials cost comparison

The values of materials vary considerable depending upon the frim of the suppliers and the
purchaser.

Many factors determine the cost of materials as stated below:

i. The quantity to be purchased

ii. The annual turnover of the supplier
iii. The speed by which the purchaser settles his accounts
iv. The material transport cost, the package and carriage cost materials and sizes of
bags need.
It allows that purchaser of a large quantities of materials and prompt prayer of accounts to get
more advantageous quotations than the purchaser that delay to clear accounts and small
quantities.

It is therefore required that estimator to always obtain the quotations from their suppliers for
materials they do not often use and should not rely on manufacturers price list for these
information/prices.

Wastage of materials

Materials waste must be reflected in the unit price wastage allowance which can only be
assessed from past experience and observation of wastage be constantly noted by the
estimator.

Wastage of materials varies from firm to firm and depends to a good extent on the skill and
efficiency of the site foreman and electrical operators

Categories of material wastage

1. Cutting waste
2. Application waste
3. Stock pile waste
4. Residue waste
5. Transit waste
6. Theft and vandalism waste

SCHEDULING
There two methods of scheduling

i. Materials listing (listing materials required then costing without indicating where
to use them)
ii. Work scheduling

Material Listing

Materials listing consists of list of materials required for the work.

In this method one item could cover say 25mm conduits required for the entire project with
no indication of where or at what stages where they will be installed or to which part of the
project they are necessary.

Such approach appears to have advantage of that it simplifies the work.

The demerits of the method are:

i. It can lead to items or even a whole section of work being been left out.
ii. It can lead to labor only item been missed out such as drilling, chiseling of walls
iii. It does not provide flexibility in applying differing labor standards to the same
materials, where materials are installed in differing parts or circumstances ie
surface, foundations, walls.
iv. It does not provide detailed information necessary for planning, controls and
material procurement (the secondary function of estimate)
v. It does not provide adequate description of the work to allow the estimate to be
used as a selling aid (extent of the offer/detailed BOQ). As client may require
well elaborated details of work.

Work Scheduling

This describes the work to be carried out rather than listing only the materials to be used. E.g
2 core 2.5mm PVC insulated cable from point x to point y distance of 100m to be installed.

Subdividing the work

For example. Below is scheduling for electrical works

Main switch gear

Submain distribution

Submain Cables

Distribution board

Final subcircuit ( lighting and power circuit)

 The purpose of scheduling is to breakdown the project into individual items of work
against which it is possible to allocate labor and material to be possible.
  Once these are known for each individual item, the labor and materials resources
required for the whole project can be calculated.
 First of all therefore, the work is subdivided into sections.
Possible List of sections in electrical works

i. Main switch board

ii. Submain distribution
iii. Trunking installation
iv. Lighting Installation
v. Socket outlets
vi. Power Installations
vii. Telephones
viii. Fire alarm system
ix. Bell installation
x. Earthing
xi. Lighting Conductors
xii. Emergency lighting
xiii. Water heating
xiv. External lighting
xv. Internal telephones
xvi. Space heating

Subdiving the work

i. Consumer control unit
ii. Lighting installation
iii. Socket outlet
iv. Bell circuit installation
v. Clock installation
vi. Earthing
vii. Main distribution (metering)

Bill of Quantities

The Bill of Quantities (BOQ) is defined as a list of brief descriptions and estimated
quantities.
The quantities are defined as estimated because they are subject to measurement and are not
expected to be totally accurate due to the unknown factors which occur in engineering work.

The objective of preparing the Bill of Quantities is to assist estimators to produce an accurate
tender efficiently and to assist the post contract administration to be carried out in an efficient
and cost-effective manner.

It should be noted that the quality of the drawings plays a major part in achieving theses aims
by enabling the taker-off to produce an accurate bill and also by allowing the estimator to
make sound engineering judgments on methods of working.

Below are samples of a bill of quantities.

Purchase order, delivery note, invoice, debit and credit notes

 A quotation, or quote, is a document that a supplier submits to a potential client with a

proposed price for the supplier's goods or services based on certain conditions. A
quotation is also often known as a quote.
A purchase order is a commercial source document that is issued by a business’
purchasing department when placing an order with its vendors or suppliers. The
document indicates the details on the items that are to be purchased, such as the types
of goods, quantity, and price. In simple terms, it is the contract drafted by the buyer
when purchasing goods from the seller.

Steps in Ordering

1. Buyer creates a purchase requisition

Before sending out the purchase order to the supplier, the first step is to create a purchase
requisition. This is a document issued within the company to the purchasing department to
keep track of the goods ordered.

The purchase requisition also helps the company keep an account of their expenses. The PO
is created only after the purchase requisition is approved by the authorized manager.

2. Buyer creates a purchase order

When the goods that need to be purchased are agreed upon, the purchase order is created. The
PO lists the date of the order, FOB shipping information, discount terms, names of the buyer
and seller, description of the goods being purchased, item number, price, quantity, and the PO
number.

The PO number is a unique number associated with a certain order. It serves two purposes.
One is to ensure that the goods ordered match the ones that are received. Secondly, the PO
number is matched to the invoice to make sure the buyer is charged the right amount for the
goods.

3. Seller accepts (or rejects) purchase order

At the bottom of the purchase order is a dotted line for the authorized manager of the seller to
sign off on the order. The PO includes all the details about the transaction and what the buyer
expects to receive. Once the seller receives the PO, they have the right to either accept or
reject the document. However, once the PO is accepted, it becomes a legally binding contract
for both parties involved.

4. Buyer records purchase order

Once the order has been placed, the purchase order remains “open.” An open purchase order
is a PO where the order is placed but the goods have not yet been received, or it can mean
that only part of the order has been received. Either way, it signifies that the delivery of the
goods is not complete.

Benefits of Purchase Orders

1. Avoids duplicate orders

Purchase orders bring several benefits to a company. The most important is that it helps avoid
duplicate orders. When a company decides to scale the business, POs can help keep track of
what has been ordered and from whom.

Also, when a buyer orders similar products, matching the invoices can be difficult. The PO
serves as a check for the invoices that need to be paid.

2. Keeps track of incoming orders

In addition, POs help keep track of incoming orders, and a well-organized purchase order
system can help simplify the inventory and shipping process.

3. Serves as legal documents

Purchase orders serve as legal documents and help avoid any future disputes regarding the
transaction.

How Does the Supplier Use the Purchase Order?

Purchase orders play a major role in the inventory management process. When the supplier
receives the PO, they will take the items listed in the PO from their inventory. The PO helps
keep a record of the inventory on hand and identify any discrepancies between the values
shown in the records and the actual stock.
Additionally, the supplier needs the PO to fill the order correctly. The buyer will also be
charged by the supplier based on the payment terms agreed upon in the PO.

Purchase Order vs. Invoice

The purchase order is a document generated by the buyer and serves the purpose of ordering
goods from the supplier. The invoice, on the other hand, is generated by the supplier and
shows how much the buyer needs to pay for goods bought from the supplier. The PO is a
contract of the sale while the invoice is the confirmation of the sale.

Purchase Order vs. Sales Order

While the purchase order shows what goods were ordered from the supplier, the sales order is
generated by the supplier and sent to the buyer. It signifies the confirmation or approval of
the sale

DELIVERY NOTE

A delivery note is a document that lists all the goods included in the delivery. It is used to
maintain transparency, accountability, and accurate record-keeping throughout the supply
chain4. The note accompanies the shipment and lists quantities, not values i.e. the price of
the goods2. A copy of the delivery note is returned to the seller as proof of delivery

DEBIT NOTE VS CREDIT NOTE

 Debit and credit notes are official accounting documents used by businesses for
different purposes.
 Debit Note: Issued by the buyer to return goods due to quality issues or other reasons.
 Credit Note: Issued by the seller to confirm acceptance of a purchase return or to
correct errors in an existing invoice or order.

Understanding the distinction between credit notes and debit notes is crucial for maintaining
financial accuracy and transparency in your business. Let's explore scenarios where each comes
into play:

1. Credit Note Scenarios:

  Product Returns: Your customer returns a batch of goods due to defects, and you issue a

credit note for the refund.

 Overbilling: You accidentally charged your client more than the agreed-upon amount,

and you issue a credit note to rectify the error.

 Quality Issues: The goods delivered didn't meet the quality standards, prompting you to
issue a credit note for a partial or full refund.

2. Debit Note Scenarios:

 Additional Goods or Services: You provide extra goods or services beyond what was

initially invoiced, and you issue a debit note for the additional amount.

 Underbilling: You realize that your initial invoice underestimated the cost, and you issue

a debit note to collect the remaining amount.

 Late Fees: If your initial invoice didn't include late payment fees, and the customer pays
late, you can issue a debit note to collect those fees.

STATEMENT OF ACCOUNT

 A Statement of Account is a financial document that summarizes transactions,

balances, and activities related to an account over a period

CASH AND TRADE DISCOUNTS

 A trade discount is the amount by which a manufacturer reduces the retail price of a product
when it sells to a reseller, rather than to the end customer. The reseller then charges the full
retail price to its customers in order to earn a profit on the difference between the amount by
which the manufacturer sold the product to it and the price at which it then sells the product to
the final customer.
 Trade discounts are used to incentivize customers to buy in bulk, purchase products during
off-peak periods, or take advantage of other favorable conditions.
 The following are some of the examples of trade discounts:
 Cash discounts are offered to customers who pay for their purchases in cash or within a
specified period. For example, a supplier may offer a 2% discount to customers who pay for
their purchase within ten days.
 Quantity discounts are offered to customers who purchase large quantities of a product or
service. For example, a supplier may offer a 5% discount to a customer who purchases 50
units of a product or service and a 10% discount to a customer who purchases 100 units.
 Trade-in Allowances : These are discounts offered to customers who trade their old products
for new ones. For example, a car dealer may offer a $2,000 discount to a customer who trades
in their old car for a new one.