1

2
Inventory Management
Inventory 3

It is defined as comprehensive list of items which are

required for manufacturing the products and to maintain
the production facilities in working conditions”.

The term inventory includes Materials: raw, in process,

finished packaging, spares and others stocks
Inventory Management 4

 Inventory Management is primarily about specifying

the size and placement of the stocked goods.

 It is the system and processes which identifies the

inventory requirements, set targets, provides
replenishment techniques and it reports the actual
and projected inventory status.
Inventory Management 5

 Inventory management is required at different

locations within a facility or within multiple locations
of supply network to protect the regular and planned
course of production against random disturbance of
running out of materials or goods.
Inventory Control 6

 “Inventory control is a planned approach of

determining what to order, when to order and how
much to order and how much to stock so that costs
associated with buying and storing are optimal
without interrupting production and sales”.

 The inventory control system strikes the balance

between the loss due to non availability of the item
and cost of carrying the stock of an item.
Objectives of Inventory Control 7

 Purchasing items of right-quantity, at right-place and

at right- time.

 Providing a suitable, secured, and sufficient place for

storage.

 Developing a proper inventory identification system.

 Maintaining an up-to-date record keeping.

Objectives of Inventory Control 8

 Making proper requisition procedures.

 To avoid accumulation of work in progress

 To contribute directly to the overall profitability of

the enterprise
Inventory Management Functions 9
 Inventory Functions:
 To meet anticipated demand
 To smooth production requirements
 To protect against stock outs
 To help hedge against price increase.
 To permit operations.
 To provide maximum supply service, consistent with
maximum efficiency and optimum investment.
 To provide cushion between forecasted and actual demand
for a material
Construction Resources
10
Management
Resources 11

What is resource?
“Anything that can be used to satisfy construction needs is
called as a resource”

Types of resources (4Ms):

1. Money
2. Manpower
3. Machinery
4. Material
Money Management 12
“Money management is the process of managing money,
which includes investment, budgeting, banking and
taxes”.

It is also called investment management.

Financial analysis of a project is divided into:

1. Estimation of capital cost requirement.
2. Source of financing.
Capital Cost 13
The main elements of capital cost include:
 Engineering and project management cost.
 Construction materials, manpower, machineries cost
 Management and supervision during construction.
 Land acquisition including improvement.
 Construction financing.
 Inspection and testing.
Sources of Fund 14

Sources of financing

 Equity capital

 Preference capital

 Secured debentures

 Term loans

 Capital subsidy and development loans.

Manpower 15

 Next to agriculture, the construction industry provides

maximum employment.
 There is no job security and the workers are hired when
required and fired when the work is over.
 Legislation is generally necessary for the following
reasons:
1. To fix the terms of employment.
2. To provide proper working conditions.
3. To provide social security.
Manpower 16
 Types of labour:
 Skilled labour
• Masons
• Carpenters
• Painters
• Electricians
• Plumbers
• Unskilled labour.
• Majdoors .
• House keeping labour.
• Helper.
• Material shifting labours.
Machinery 17

 Machineries are generally used to reduce the no. of

labours.

 To reduce time of the construction.

 To increase the effectiveness of other resources.

Selection of Machinery 18
Machinery selection is mainly depend upon

 Whether to purchase or to hire the equipment.

 Purchase is generally preferred when the equipment

is needed for the entire project.

 Hiring is generally preferred when the cost of the

machinery is high to purchase.
Selection of Machinery 19

 It is better to use the equipment which is available at

the construction site

 Use of standard equipment, availability of spare parts.

 Suitability of local labour for operation.

Materials 20

Construction materials types:

1. Cementing materials: Lime, Cement, Mortar etc.

2. Solid materials: Stones, Bricks, Iron, Timber etc.

3. Protective material: Paints, Varnishes, Plaster etc.

Purchase of Materials 21
 The purchase is mainly depend upon quality
specification, quantity required, timing of
requirement much in advance.

 Based on this information the purchasing department

will locate the suppliers, place the orders, procure
the materials.

 The indent should generally contain the item code,

specification, quantity required, and time.
Purchase of Materials 22

 The indents are generally checked by the store

personnel.

 Only authorized persons are eligible to the requisition

of purchase of materials as per the delegated powers
THANKS TO ALL