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CONSTRUCTION MATERIALS
MANAGEMENT
(COTM 5202)

06/25/2022 BSc. IN CONSTRUCTION TECH. & MANAGEMENT, WU, MARCH

2022
 Presentation content
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 Definition of Materials and Classification of Materials

 What is Materials Management
 Benefit of Materials Management

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 1. Introduction
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 Definition of Materials
 Materials can be defined as the physical materials that are
purchased and used to produce the final product. In other
words, materials are the parts used to produce the final product.

 Classification of Materials
 Construction materials can be classified into different
categories depending on their fabrication and in the way that
they can be handled on site.
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 Cont…
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Based on this criteria, materials can be classified into

five categories,
1. Bulk materials- these are materials that are delivered in mass
and are deposited in a large container.

2. Bagged materials- these are materials delivered in bags for ease

of handling and controlled use.

3. Palleted materials- these are bagged materials that are placed in

pallets for delivery.

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 Cont…
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4. Packaged materials- these are materials that are packaged

together to prevent damage during transportation and

deterioration when they are stored.

5. Loose materials- these are materials that are partially

fabricated and that should be handled individually.

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 Example on Classification of Materials
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Material Bulk Bagged Palleted Packaged Loose

Sand X
Gravel X
Topsoil X
Paving Slabs X
Structural Timber X
Cement X X X
Concrete X
Pipes X X
Tiles X
Doors X
Electrical Fittings X
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 Other Classification
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 Some other scholars states that the main categories of

materials encountered in a construction project are engineered
materials, bulk materials, and fabricated materials.
 Bulk materials- these are materials manufactured to
standards and are purchased in quantity.

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 Cont…
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 Engineered materials- these materials are specifically

fabricated for a particular project or are manufactured to an

industry specification in a shop away from the site. Examples

of such materials include pipes, pipe fittings, wiring, and

cables.

 Fabricated materials- these are materials that are assembled

together to form a finished part or a more complicated part.

Examples of such materials include steel beams and columns

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 Cont…
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ABC Analysis/Clasification
 Is a basic analytical management tool
 It enables management to place efforts where the
results will be greatest.
 This technique tries to analyze the distribution of any
characteristic by money value of importance in order
to determine its priority.

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 Cont…
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 Principles of ABC analysis:

 The analysis does not depend upon the unit cost of the items
but only on its annual consumption value.
 It is independent of the importance of the item in terms of
money.
 The limits of ABC analysis are not uniform but depend upon
the size of the undertaking, its inventory as well as the
number of items controlled
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 Cont…
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Applications of this
technique
 Inspection
 Inventory Control
 Store-keeping
 Criticality of items  Verification of bills.
 Obsolete stock control

 Purchase orders

 Receipt of materials
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 Steps for classifying the items into A,B,C
categories.
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1. List out all the items in the inventory.

2. Ascertain the unit cost of each of the items.

3. Ascertain the number of units issued in a year.

4. To obtain the annual consumption value

multiply the unit cost of each item with the
number of units issued in a year.
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 Cont.
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5. Sort the list of consumption value of each item in

the descending order.

6. Starting at the top of the list compute the

cumulative total of the money consumption value.

7. Compute for each item the cumulative percentages

for the item count and cumulative annual value.

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 Cont…
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Then you can categorize

 About 10 % of materials consume 70 % of resources.
 About 20 % of materials consume 20 % of resources.
 About 70 % of materials consume 10 % of resources.

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 Cont..
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A‟ ITEMS
Small in number, but consume
large amount of resources

B‟ ITEMs
Intermediate

C‟ ITEMS
Larger in number, but consume
lesser amount of resources

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 F-S-N Classification
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Fast Moving – Slow moving – Non-moving.

 Fast Moving items: most inventory models are aimed at
managing the fast moving goods, which exhibit a regular
consumption pattern.
 Slow Moving items: Many spare parts come under this
category, they require different management approach,
 Non-moving items: Optimal stock disposal rules rather than
inventory provisioning.

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 What is Materials Management ?
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 Materials represent a major expense (60-70%) in construction,

so minimizing procurement costs improves opportunities for
reducing the overall project costs.
 Poor materials management result in increased costs during
construction.
 Efficient management of materials can result in substantial
savings in project costs.

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 Cont…
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 If materials are purchased too early, capital may be held up

and interest charges incurred on the excess inventory of
materials.
 Materials may deteriorate during storage or get stolen unless
special care is taken. Delays and extras expenses may be
incurred if materials required for particular activities are
unavailable.

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 Cont…
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Therefore, Ensuring a timely flow of

materials is an important concern
of material management.

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 Definition of Materials Management
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 Material management can be defined as a process that:

 coordinates planning,
 assessing the requirement,
 sourcing,
 purchasing,
 transporting,
 storing and controlling of materials,
 minimizing the wastage and optimizing the profitability by reducing cost of
material.

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 Cont…
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 The purpose of material management is to assure that: the

right materials are in the right place, in the right quantities
when needed.
 In order to better understand materials management lets
discuss the following processes planning, procurement,
logistics, handling, stock and waste control.

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 Planning
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 Materials planning includes quantifying, ordering

and scheduling. Planning especially in terms of
increasing productivity, profit, and facilitating the
timely completion of construction projects. Hence,
productivity will suffer if the material planning
process is not executed properly.

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 Procurement
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 Procurement is described as the purchase of

materials and services from outside organizations to
support the firm’s operations from production to
marketing, sales and logistics.

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 Cont.
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 As such, a detailed material schedule and co-

ordination of the procurement and order of
material are important in assuring material
availability at the right time.

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 Logistics
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 Generally, logistics is a concept that emphasizes

movement and it may include planning,
implementing, and controlling the flow and storage
of all goods from raw materials to the finished
product to meet customer requirements.

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 Handling
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 Handling of materials is the flow component that

provides for their movement and placement. Due to the
frequency of handling materials there are quality
considerations when designing a materials handling
system.

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 Cont.
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 Materials handling equipment selection is an

important function as it can enhance the
production process, provide effective
utilization of manpower, increase production
and improve system flexibility

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 Stock and Waste Control
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 Stock control is classified as a technique devised to

cover and ensure all items are available when
required. Stock control can include raw materials,
processed materials, assembly components,
consumable stores, general stores, maintenance
materials and spares, work in progress and finished
products.
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 Cont.
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 It is of great importance that the bulk of

construction materials delivery requires
proper management of stock control.

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 Benefit of Materials Management
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An effective material management system can bring many

benefits for a company, some of these benefits include;

 Reducing the overall costs  Reduce storage of materials

on site and reduce material

of materials through
surplus
 Improvements in labor
 Better cash flow management
productivity
 Improvements in project
 Stock reduction
schedule
 Purchase savings 06/25/2022
 CHAPTER TWO
2. Materials Requirement Planning
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CONTENTS

1. What is MRP?

2. Example on MRP

3. Reorder Point Planning

4. MRP Report

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 Planning (Reminder from previous lecture)
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 Materials planning includes quantifying, ordering

and scheduling. Planning especially in terms of
increasing productivity, profit, and facilitating the
timely completion of construction projects. Hence,
productivity will suffer if the material planning
process is not executed properly.
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 1. What is Materials Requirement Planning?
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 Material Requirements Planning is a time phased priority-

planning technique that calculates material requirements in
terms of quantity and schedule its supply to meet demand
across all products and parts in one or more plants.
 The function of material planning department/unit is therefore
to plan for the future procurement of all the required materials
as per the production schedule. At the time of material
planning, the budget allocated for the materials will also be
critically reviewed, for better control.
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 MRP systems use four pieces of information to determine
what material should be ordered and when :
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 the master production schedule, which describes when each

product is scheduled to be manufactured;
 bill of materials, which lists exactly the parts or materials
required to make each product;
 production cycle times and material needs at each stage of the
production cycle time; and,
 supplier lead times.

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 Cont.
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 2. Example of MRP Logic and Product Structure Tree
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Given the product structure tree for “A” and the

lead time and demand information below,
provide a materials requirements plan that
defines the number of units of each component
and when they will be needed.

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Product Structure Tree for Assembly A

Demand
A Day 10 50 A
Day 8 20 B (Spares)
Day 6 15 D (Spares)

B(4) C(2) Lead Times

A 1 day
B 2 days
C 1 day
D 3 days
E 4 days
D(2) E(1) D(3) F(2) F 1 day
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First, the number of units of “A” are scheduled backwards to

allow for their lead time. So, in the materials requirement plan
below, we have to place an order for 50 units of “A” in the 9th
week to receive them in the 10th week.

Day: 1 2 3 4 5 6 7 8 9 10
A Required 50
Order Placement 50

LT = 1 day
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Next, we need to start scheduling the components that make up “A”. In
the case of component “B” we need 4 B’s for each A. Since we need 50
A’s, that means 200 B’s. And again, we back the schedule up for the
necessary 2 days of lead time.
Day: 1 2 3 4 5 6 7 8 9 10
A Required 50
Order Placement 50
B Required 20 200
Order Placement 20 200

LT = 2 Spares
A 4x50=200

B(4) C(2)

D(2) E(1) D(3) F(2)

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Finally, repeating the process for all components, we have the final
materials requirements plan:
Day: 1 2 3 4 5 6 7 8 9 10
A Required 50
LT=1 Order Placement 50
B Required 20 200
LT=2 Order Placement 20 200
C Required 100
LT=1 Order Placement 100
D Required 55 400 300
LT=3 Order Placement 55 400 300
E Required 20 200
LT=4 Order Placement 20 200

Part D: Day 6
40 + 15 spares

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 3. Reorder Point Planning
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 Variables B. Automatic Reorder Point

 Safety Stock planning
 Expected average material System Calculates
consumption  Reorder Point
 Replenishment Lead time  Safety stock
 Types
 Manual
 Automatic

A. Manual Reorder Point

Input Planning
 Reorder Point
 Safety stock
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 Conti...
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Material Requirements Planning System

 Based on a master production schedule, a material requirements
planning system:
 Creates schedules identifying the specific parts and materials
required to produce end items.

 Determines exact unit numbers needed.

 Determines the dates when orders for those materials should be

released, based on lead times.
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 4. MRP Reports
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Primary MRP Reports

 Planned orders to be released at a future time.
 Order release notices to execute the planned orders.
 Changes in due dates of open orders due to rescheduling.
 Cancellations or suspensions of open orders due to cancellation
or suspension of orders on the master production schedule.
 Inventory status data.

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Secondary MRP Reports

 Planning reports, for example, forecasting inventory
requirements over a period of time.
 Performance reports used to determine agreement between
actual and programmed usage and costs.
 Exception reports used to point out serious discrepancies,
such as late or overdue orders.

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Thank You
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