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EXTENDED MANAGEMENT:CIVIL I
MODULE EIGHT: MATERIALS MANAGEMENTLECTURER: JB NARTEY
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INTRODUCTION
• Construction material costs form a large
percentage of production costs (60% - 40% of
total construction costs) and must therefore
be carefully selected, scheduled, transported,handled and controlled.
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MATERIALS MANAGEMENT
OBJECTIVES
• To ensure continuity of the construction activities by meansof uninterrupted supply of materials.
• To find the most quality material at the most suitable price.
• To keep financial losses due to material losses and wastecaused by duplicating, over-estimation, obsolescence andtheft as low as possible.
• To find alternative reliable sources for purchases (supplies).
• To build up good relations with suppliers and other internalorganisations.
•
To maintain good relations with all departments inside theenterprise in order to reach maximum efficiency and co-ordination.
• To develop policy and procedures that will reach the aboveobjectives at the lowest possible (optimum) cost.
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GOOD MATERIALS MANAGEMENT
BENEFITS
• Lower prices for materials
• Continuity of supply
• Reduced transportation cost
•Reduced material obsolescence
• Improved internal and external relationships
• Better control of quality
• Effective administration and unity of
organisational effort• Maintenance of adequate records and provision
of information for the operations manager.
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CENTRALISED MATERIAL MANAGEMENT
• Only one(1) department( PurchasingDept.) at the head office is responsible for
materials management for the whole
organisation.
• Site office is used only for small material
items management
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CENTRALISED MATERIALS MANAGEMENT
STRUCTURE
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CEO
ConstructionOperations
EstimatingDept.
PurchasingDept.
Plant &Equipment
Dept
FinanceDept
StoresDept
Site 1
Site 2
AdminDept
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PURCHASING/BUYING DEPT.
RESPONSIBILITIES
• Purchase materials, plant and tools necessary forthe execution of the works.
• Procedure: – Prepare Material schedules-Master programme.
– Sending Enquiries-suppliers and sub-contractors
– Finalising quotations-suppliers and subcontractors.
– Quotation Evaluations/Cheaper alternatives.
– Selection of Supplier
– Placing of orders - suppliers.
– Prepare material delivery schedules.
– Re-information and feedback- finance/accountssection, computer section and site managers
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ESTIMATING DEPT
RESPONSIBILITIES• Information supply /enquiries to suppliers
• Enquiries should embody all relevant information to enableaccurate quotations to be submitted.
• A list of firms to whom the enquiry is to be sent_ Company’s Supplychain policy
• Enquiries to suppliers information; – Specifications of the materials required.
– Quantity of materials required.
– likely delivery programme of the materials.
– Address of the site where delivery is to be made.
– Means of access to the site. – Any traffic conditions and restrictions affecting delivery to the site.
– Quotation Validity period
– Contact person & address - quotation enquiries.
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ESTIMATING DEPT
RESPONSIBILITIES
• Estimator's evaluation of quotations
– The quotation complies with the bill of quantities andspecifications.
– The unit rates are consistent throughout the quotation.
– The rates are realistic and comparable with competitors.
– The quotation includes for preliminaries and attendances.
– The quotation complies with the terms of the maincontract regarding the payment period, retention and
defects liability. – There are no onerous conditions attached to the
subcontract.
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ESTIMATING DEPT
RESPONSIBILITIES• Selection of Supplier
– It must be appreciated that the cheapest supplier might not always be the best or most suitable supplier.Therefore it is very important that the contractor careful scrutinise the selection of a supplier.
– The following factors must be taken into consideration:
• Previous experiences your Company and others have had with the supplier.
• Strength and stability of the business.
•
Experience as a supplier in the field of business.• How realistic the quotations are.
• Quality of the materials to be supplied.
• Consistent standards of the materials supplied.
• How and where the firm obtains supplies. (buy in or self-manufacturer).
• Discounts offered on Quantity purchased and Cash payments.
• Does the firm undertake to deliver?
• Reputation of the firm.
• Reserve facilities.• Location of the supplier in relation to the construction site.
• Internal facilities of supplier (well equipped; condition of stores, etc.)
• Labour relations (any unrest etc. labour policies and practices of the firm.)
• Single or multiple supplier.
• After sales service offered.
• Ability to expedite deliveries on time.
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DECENTRALISED MATERIALS
MANAGEMENT
• Each department or construction site isresponsible for its own purchasing procedures.
• Each site or department to have a buying clerk
performing the purchasing duties as well asbeing responsible for the delivery, storage and
issues.
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DECENTRALISED MANAGEMENT
STRUCTURE
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CEO
ConstructionProject
EstimatingDept.
PurchasingDept.
Plant &
Equip
Dept
FinanceDept
Admin.Dept
C.M.
Site Agent
StorekeeperSite Clerk
(Buyer)
General Foreman
Trade ForemanTime
Keeper
Stores
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SITE CLERK(SITE BUYING)
• Procedure; – Material Request_ Qty required and date required.
– Material Requisition
•
Qty required and date required.• sizes and quality, monetary figures allowable and
costing codes.
• signature of the requisitioner
–
Send material requisition to the purchasing dept. – Rreceive, check and sign a confirmation of delivery
for the materials ordered.
– Storage and distribution of materials
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CLASSWORK
• DISCUSS THE ADVANTAGES & DISADVANTAGES
OF THE CENTRALISED & DECENTRALISED
MATERIALS MANAGEMENT
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MATERIALS MANAGEMENT
PLANNING
•
MATERIAL SCHEDULING –MATERIAL SCHEDULE
• BOQ/MASTER PROGRAMME
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MATERIALS MANAGEMENT
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MATERIALS MANAGEMENT
ORGANISING• MATERIAL REQUISITION( REQUISITION FORMS)
• MATERIAL ACQUISITION – PRICE ENQUIRIES/SOLICIT QUOTATIONS(PRICE QUOTATIONS)
– EVALUATE QUOTATIONS
– SELECT SUPPLIER
– NEGOTIATE WITH SELECTED SUPPLIER(PRICE DISCOUNT)
– PLACE ORDER( MATERIAL ORDER)
– MATERIAL DELIVERY SCHEDULES(MATERIALS DELIVERY BOARD)
– LOADING (ADVICE NOTE) – TRANSPORTATION(DELIVERY NOTE/WAYBILL)
– OFF-LOADING(DELIVERY NOTE/WAYBILL)
• MATERIAL STORAGE (MATERIALS RECORD BOOK/STOCK CARD/RELEASE NOTE)
• MATERIAL PAYMENT –
PAYMENT INVOICE – CHECKING OF PAYMENT INVOICE & DELIVERY NOTES
– PAYMENT AUTHORISATION
– PAYMENT
– PAYMENT CODING
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MATERIAL MANAGEMENT
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MATERIAL MANAGEMENT
CONTROL
• Requisition Form
• Quotation.
• Order
• Advice Note.• Delivery Note.
• Invoice.
• Release Note.
• Stock Card.
• Materials record book.
• Materials delivery board.
• Materials transfer notes
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MATERIAL ACQUISITION
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MATERIAL ACQUISITION
CONTROL
• Requisition Form
– Name of project.
– The task and cost code.
– A description of the item(s) required.
– The quantity required.
• This document must be signed by an
authorised person.
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MATERIALS ACQUISITION
CONTROL
• Quotation.
–The document whereupon the
supplier submits a price at which hewill deliver materials as requested
by the buyer.
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MATERIAL ACQUISITION
CONTROL
•
Order
• The document on which the buyer requests the supplier to deliver the materialsselected from the quotation.
• The document is the acceptance of the offer (quotation) and a contract thereforecomes into being between the buyer and the supplier.
• Order information: – The quotations reference number.
– The date the order is placed.
– The order number.
– The name of project or store requiring the materials.
– The address to which the materials must be delivered.
–
The name of the person who will receive the materials. – Date and time of delivery. (If materials are required at a specific time)
– A description of the item. (As per the quotation).
– The quantity required.
– The unit price.
– The total amount.
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MATERIAL ACQUISITION
CONTROL
• Advice Note. – supplier issues to the buyer that goods have been
dispatched.
– This informs site staff to prepare for offloading and
storage. – Used extensively when goods are delivered by long-
distance eg by rail,sea,air etc
– Advice Note information:•
The order number.• The delivery address.
• A description of the item.
• The quantity.
• The method of transport.
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MATERIAL ACQUISITION
CONTROL
• Delivery Note.
– Supplier's proof that the goods have been delivered.
– Delivery note information;
• The order number is correct.
• The materials are being delivered to the correct address.
• The materials are as per the description on the order and
requisition.
• The quantity being delivered is correct.• The quality of the materials is acceptable.
• Signature of the receiver
–
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MATERIAL STORAGE
CONTROL
• Release Note.
– Issue of materials from a store to different sites or
projects.
– Release Note information:
• A description of the item.
• The quantity supplied.
• The cost code.• The signature of the receiver.
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MATERIAL STORAGE
CONTROL
• Stock Card.
– Stock Control
– Stock card information:
• Code of item.
• Description of item.
• Re-order level. (Fast moving items such as nails, screws etc.)
• Name, address and telephone number of the supplier.
• Quantity to be re-ordered.
• Date of receipt of order.
• Quantities received and issued.
• Balance of items in store.
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MATERIAL STORAGE
CONTROL
• Materials record book.
• Stock Control
• Materials delivery board.
– Material Delivery Schedule
• Materials transfer notes
– Material transfer to other sites
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MATERIALS PAYMENT
CONTROL
Invoice.
– Supplier sends to the accounts/finance
department.
– Check Invoice against delivery note.
– If there is no discrepancy, payment will be
made.
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STORES - OFF-SITE/HEAD OFFICE
• The stores department is usually a section of the
head office. – Materials are kept in stock and issued to the sites as
and when requested to do so.
• Storeman
– functions:
• Prepares requisitions for the purchase of stocks.
• Receiving of delivered goods.
• Coding, labelling and placing of such goods.
• Issuing of goods to site.
• Maintain & operate Material Control documents
• Send Material Control Documents to accounts/financedepartment.
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STORES ON SITE
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STORES -ON SITE.
OBJECTIVE
• Close to the point of use as is practically and
economically possible.
• Minimise time wasted, risk of damage, loss
and costs .
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STORES ON SITE
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STORES-ON-SITE
STORES ON SITE
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STORES -ON SITE.
PLANNING
• Management’s degree of control.
• Solicit various viewpoints
• Practical and Economic solution• Set or develop a plan
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MATERIAL DELIVERIES
• Material schedules.
• Material delivery schedules
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MATERIAL DELIVERIES
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MATERIAL DELIVERIES
LATE DELIVERIES_IMPLICATIONS
• Non productive labour teams• Non productive plant
• Delays on sections of contract
•
Penalty clauses actioned as a
result of latecompletion
• Productivity claims from subcontractors (labouronly)
It is therefore imperative for a contractor to
ensure that materials are delivered “on time”
when required.
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MATERIALS_TRANSPORT
• Off-site – By sea; Long hauls, Lowest cost, Very slow, harbours and
other supported by other modes of transport( rail,air,road)
– By rail.; Long hauls, Second lowest cost , faster and canserve any centre-coastal or inland.
–
By air; Long Hauls, Very Expensive, Very fast – By road; Short Hauls(<300km), the most economical
• On-site. – wheelbarrows, dumpers, hoists, conveyors and cranes
– This is influenced by the site layout.
• In Stores. – forklift, cranes, wheelbarrows and conveyors.
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MATERIALS TRANSPORT OFF SITE
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MATERIALS TRANSPORT-OFF-SITE
BY RAIL,SEA,AIR
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MATERIALS TRANSPORT-OFF-SITE
BY ROAD
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MATERIALS TRANSPORT-ON-SITE
MATERIAL HOISTS
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MATERIALS TRANSPORT-ON-SITE
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MATERIALS TRANSPORT-ON-SITE
_CRANES
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MATERIALS TRANSPORT-IN-STORES
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BULK TRANSPORTED
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PACKAGED/BAGGED TRANSPORTED
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LOOSE TRANSPORTED
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LOOSE TRANSPORTED
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PALLET TRANSPORTED
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PALLET TRANSPORTED
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SURPLUS MATERIALS
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PROBLEM
• Surplus materials/material left overs on site
after completion.
• Problems;
– Cost of transporting/transfering surplus materials
– Sale of surplus materials_ losses
– Time wastage of both head office & site staff
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SURPLUS MATERIALS
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SURPLUS MATERIALS
_CAUSES
• Over-estimation of waste in the material
requirements.
• Material orders were placed on strength of an
over measured/estimated Bill of Quantities.
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SURPLUS MATERIALS
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SURPLUS MATERIALS
_REMEDIES
• Arrange for handing over materials to client and thecost for inclusion in the final account.
• When requesting materials check and double check'take--off" done for ordering purpose.
•If activity is nearing completion and more material isrequired, carefully check the quantity required tocomplete and check the actual waste factors to orderthe correct quantity.
• Do not leave the "taking-off" of critical materials to a
junior staff member or a clerk.• Never accept the Bill of Quantity as correct and do not
base your ordering on this document.