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CONSTRUCTION INDUSTRY INSTITUTE

PROJECT MATERIALS MANAGEMENT PRIMER

Bureau of Engineering Research Publication 7-2The University of Texas at Austin November 1988

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Project Materials Management Primer

Prepared by The Construction Industry Institute Materials Management Task Force

Publication 7-2 November 1988

TABLE OF CONTENTS

Chapter Page

1. Introduction................................................. 1 Background and Purpose.................................... 1 Importance of Construction Materials Management........... 1 Attributes of Materials Management........................ 1

2. Planning and Organization.................................... 3 Planning Guide............................................ 3 Organization and Personnel................................ 4 Computer Systems.......................................... 5

3. Project Execution............................................ 7 Materials Requirements Planning and Control............... 7 Purchasing................................................ 7 Expediting................................................ 8 Quality Assurance and Quality Control..................... 9 Transportation............................................ 10 Site Materials Management................................. 11 Surplus Materials......................................... 11

4. Special Applications......................................... 13 International Project Materials Management................ 13 The Small Project and Materials Management................ 14 Commercial Project Applications........................... 14 Special Construction Techniques........................... 15

5. Conclusions.................................................. 17

References.................................................... 18

1. INTRODUCTION

Background and Purpose

This primer is a digest of the information contained in the ConstructionIndustry Institute (CII) Special Product, Project Materials ManagementHandbook. The topics discussed are a condensation of 15 of the separatechapters in the Handbook. The Handbook contains not only the chapters on the subjects in this primer, but also several appendices and checklists. Inparticular, it contains a postproject evaluation checklist, a guide tocontractor selection, a set of definitions, and a bibliography onconstruction materials management.

The purpose of this publication is to assist owners and contractors(engineering and construction) in using modern materials management systemsand techniques which have been proven to be successful. Readers areencouraged to research the detailed documentation contained both in theHandbook and the References.

Importance of Construction Materials Management

Studies by The Business Roundtable Construction Industry CostEffectiveness (CICE) Project in 1982 and CII in 1985 and 1986 have emphasized the practical value of proper management of materials. These studies have shown that real savings exist in improved labor productivity, reduced surplus, and improved cash flow. Convincing the industry of the necessity for high level attention to materials has not been easy, however, despite the evidence that materials and equipment comprise more than half of the project cost and that the lack of materials is the major cause of project delays.

In a highly competitive market, contractors (particularly small firms)may find it difficult to make the long-term investment commitment required of a modern materials management system. Nevertheless, the long-term benefits are significant. Good management systems are essential to those companies that want to remain competitive in the future.

Attributes of Materials Management

A materials management system includes the major functions ofidentifying, acquiring, distributing, and disposing of materials needed on aconstruction project. The logical components of this system are shown inFigure 1. Not shown are the most important functions of planning andcontrolling the entire system. The more important objectives of materialsmanagement are to:

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o Assure quality materials are on hand when and where required.

o Obtain the best value for purchased materials.

o Provide efficient, low cost transport, security, and storage of materials within construction sites.

o Reduce surplus to the lowest level possible.

The functions discussed in the following sections contribute toachieving these and other important objectives.

2. PLANNING AND ORGANIZATION

Planning Guide

The project materials plan is a fundamental, important document uniquefor each project. To assist project planners and managers, the CII Materials Management Task Force has produced CII Source Document No. 27, Project Materials Management Planning Guide, which also appears as Chapter 2 of the Handbook. The guide is intended to assist project teams in the development of comprehensive materials plans, and is the framework for developing detailed procedures.

In developing the materials plan various factors must be considered,such as project size, scope, location, cash flow requirements, schedule andlead times of critical purchases, owner philosophy, owner approvals, numberof project participants, inspection roles, use of owner purchase agreements,acceptable bidders or suppliers list, and extent of prefabrication. Thematerials plan should record the assignment of responsibilities for functions involved in materials management.

Engineered materials, including equipment, are the most visible, costly,complex, and quality critical. Engineered materials will usually drive theproject schedule, and major equipment lead times will influence theengineering schedule. Bulk materials planning is more difficult because bulk materials are more numerous and quantities are never exactly known until the job is over. Design evolution causes continual updating of the bulk requirements.

Scheduling the entire materials program is essential to meeting theproject timetable. Materials schedules are as critical as those ofengineering and construction and span all phases of the project, fromdefining and approving the requirements to purchasing, vendor lead time,transportation, and site management. International materials managementschedules should include time for transportation, import licensing, andcustoms clearance.

Planning must also consider responsibilities for purchasing (home officeand site) including vendor selection, terms and conditions of the purchaseorder, forms used in purchasing, and procedures and schedules. Particularcare should be given to invoicing and payment procedures, which should bediscussed with accounting and the vendor to avoid any misunderstandings.

The degree and type of expediting will vary, depending on projectrequirements. It is important that the plan provide for an exchange ofinformation among expediting, project management, purchasing, construction,and other groups. In particular, expediting should provide sufficientinformation so that alternative construction plans can be properly evaluatedwhen problems occur.

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The transportation plan should consider safety, cost, timely delivery,hazardous material content, and point of title transfer. Of particularconcern are foreign shipments, which involve considerable additionalcomplications in terms of export regulations, delays, tracing of shipments,and licensing and import requirements.

Planning for site materials management includes consideration forreceiving, storage, control, and distribution of materials at theconstruction site. This includes layout and organization of laydown areasand warehouse facilities, development of storage and maintenance plans, andplanning for access to and within the site. Preparations for fieldpurchasing, materials control and expediting must also be addressed. All ofthese functions should be planned to allow craft labor work planning toproceed on the basis of known materials availability.

Planning for computer systems must address the materials-related dataneeds of the project, the specific functions to be integrated, and theidentity and location of various participating entities. The system mustsatisfy the control and reporting requirements for each component of theoperation shown in Figure 1. Also, it must be sufficiently flexible to allowthe entry and tracking of materials by work package, consistent with totalproject work planning. The need for and benefit of data transfer betweenentities and locations also should be addressed when selecting systems anddata formats. Finally, system planning also should consider relatedfunctions such as project cost reporting and various accounting activities.

The materials quality plan is designed to ensure conformance of vendorsupplied materials to project specifications. The plan should provide forthe use of realistic, achievable specifications and address the qualityaspects of purchasing documents, shop fabrication, and shop tests. Theinspection plan for each piece of equipment is developed during the designand preaward phases. It includes an evaluation of the need for and level ofshop inspection, including hold points.

Special construction techniques (prefabrication, preassembly andmodularization) have significant impact on materials management. Materialsplanning is usually more complex because of the additional levels ofactivities at multiple sites. Early decisions are needed on the assignmentof responsibilities among the owner, design contractor, fabricator, and theerection contractor.

Organization and Personnel

An integrated materials management organization plays a significant rolein determining the ultimate cost of a construction project. The organization must be structured to provide for the timely performance of the work, with materials personnel located at appropriate levels of project management to contribute to and influence the decision making process.

In some cases, particularly on larger projects, the entire scope ofmaterials functions may be consolidated into one unit. On smaller jobs,various materials

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functions sometimes are assigned to individuals who have otherresponsibilities and assignments. This poses significant challenges to theindividual responsible for managing all materials functions. A single focusfor the management of these functions is essential, even though the assignedindividual may have other project duties.

The organizational structure of materials management must take into con-sideration the size, scope, contracting strategy, and location of theproject. A primary requirement is the coordination between the home officeand the field, which is achieved by individuals and computer systemscomplimenting each other throughout the materials cycle. Large projects,regardless of location, will require a full staff of skilled professionalswith a direct reporting line to project management. These materialsorganizations continue to rely on home office guidance in procedure andpolicy development and the selection and supply of key field materialsmanagement personnel.

It is essential that the organization be staffed with professionalspossessing skills consistent with the scope of work. The requirements arechanging to fewer semi-skilled and more professional personnel. The required key personnel must have a thorough understanding of the project materials plan and its function within the total project. Prior experience in requirements definition, procurement, quality assurance/quality control,transportation, and site materials management is highly desirable. Computerconversancy is increasingly important as the benefits of materials management automation become practical for ever smaller jobs.

Although proper selection of personnel will minimize the necessarytraining, some training for the particular requirements of each project willbe required. Much of this training can be on-the-job, but formal training in management, business, and computers is increasingly required. Lack oftraining, especially of site personnel, has been a frequently cited factor on "problem" projects.

A proactive integrated systems approach is the only successful way toensure that materials are considered in project planning, controlling, anddirecting activities. Materials management personnel must be able to operate in the project environment, to anticipate the requirements of otherorganizations, to administer their program within a complex set oforganizational arrangements, and to communicate the importance of materialsmanagement.

Computer Systems

A computer system is usually required to achieve coordination of theindividual functions of materials management. A well designed computersystem assists with the generation of materials requirements and then tracks materials requisitions and purchase orders through the purchasing,expediting, and warehousing functions to final issue and installation. Previous research conducted by CII has indicated that materials managementcomputer systems can play an important role in improving craft laborproductivity, cash flow and vendor performance, and in reducing bulkmaterials surplus.

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Many factors must be considered when developing a materials managementcomputer system. In general, an efficient system will include the following:

o Full integration of all materials management functions throughout the home office and project site, with emphasis on establishing capabilities that will produce project cost saving benefits

o Line item reporting of purchase orders and requisitions

o Sufficient flexibility to respond to various contractual arrangements, facility types, project sizes and locations, as well as a wide range of anticipated owner requirements and constraints

o Online capability to ensure availability of current information to all system users

o A menu driven screen format, or some other user-friendly format, to ensure user acceptance and minimum user training time

o Hardware portability, i.e., software that can be used on either small or large computer systems, depending on the project data requirements

o Compatibility with other engineering, accounting, cost estimating, and project control computer systems.

To be cost effective, the computer system must effectively combine andintegrate all of the individual functions of materials management systems. The system must facilitate the dissemination of current data to a wide rangeof system users, utilize current hardware and software technology, andpossess sufficient versatility to be applicable to a wide range of projectconditions.

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3. PROJECT EXECUTION

Materials Requirements Planning and Control

The Materials Requirements Planning and Control (MRPC) function encom-passes the activities associated with the definition, quantification, andprocurement timing of project materials. The MRPC function spans theorganizational groups of owner, engineer, and constructor.

The approach to MRPC varies for each of three basic types of materials:engineered (tagged), bulk, and prefabricated. Engineered materials influence the entire project schedule, and consequently should be planned and managed accordingly.

The starting point of the MRPC function is the project schedule, whichindicates when drawings will be complete and when construction materials areneeded. From the project schedule and the most detailed estimate available,materials management personnel should determine the potential scheduleproblems and determine whether lead times permit a materials takeoff fromdrawings issued for construction.

Developing detailed bulk materials requirements is laborious and timeconsuming. Judgement and experience are required to determine the level ofdetail of the materials takeoff. Obviously, the level of takeoff isinfluenced by the need for quantities to be purchased. Depending on suchproject factors as schedule, item costs, and availability, these purchasequantities may be developed from estimates for some materials and from actual takeoffs on others. From the perspective of control and accountability, the level of detail of materials takeoff must be commensurate with the level of control detail and consistent with plans for construction work planning.

Similarly, there is no specific formula for determining the level ofcomputerization, although it must meet the information needs of the project. Computer systems facilitate tracking and reporting of bulk materialsquantities. Certain basic information such as drawing number, cost codes,line and/or bill of materials number, required quantities, and purchasedquantities must be presented in either a manual or computerized system. Anintegrated computerized system also can provide comparison of purchased,received, and issued quantities.

Purchasing

The purchasing function is central to materials management. Purchasinghas the responsibility and the authority to commit project funds formaterials, equipment, and services. The activity may be accomplished by thehome office, the field, or a combination of both depending on the size andscope of the project.

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The home office must maintain planning, procedural, and policy direction over the field operations in order to ensure consistent purchasing practices.

Vendor selection follows policy and procedures as a key step inaccomplishing the work. In selecting vendors for the project, purchasing isforming the foundation for the success or failure of the project. Vendorsmust be selected on the basis of their capabilities, small and disadvantagedbusiness considerations, geographic location, prior experience, and ownerpreference. Measurement of capabilities includes such considerations as past performance, financial condition, bargaining agreements, shop capacity,engineering support, quality assurance/quality control programs,competitiveness, responsiveness, and schedule adherence.

Several methods of contracting are available to the purchasingorganization, depending on the commodity or service required. The standardpurchase order is the most common form of contract utilized on projects,although blanket orders and other forms of agreements are used in varyingdegrees. Under any form, the contract must encourage the on time deliveryand completion of the work.

"Standard" or "general" terms and conditions of the order or contractgenerally address various commercial aspects of the transaction. They define the respective rights, duties, and obligations of the contracting parties.

Special terms and conditions also must be incorporated into the body ofthe purchase order or contract. Items such as schedule, QA/QC requirements,test information, data submittals, drawing approvals, expediting, and termsof payment are typical of the information which must be clearly specified. Purchase orders often require technical service agreements to complete thescope of work when the vendor's technical representative is required at thesite to supervise installation and/or erection.

Expediting

Several types of expediting exist, each with a different level ofintensity and cost. The least intense type of expediting is simple statusreporting. Periodic telephone contact is made with the vendor to determinethe status or progress of an order, and the information is reported to theproject in some systematic format. This type of expediting provides basicinformation to the project, but does little to prevent or overcome delays orproblems with an order. Reactive or corrective expediting is more intense than the simple statusreporting, but is initiated only in response to some event or action. Vendor contact may be made in response to a problem of delayed or late delivery.

Finally, proactive or preventative expediting is the most intense andaggressive type of expediting. Here, vendor and subvendor contact isintiated as soon as the order is issued and continues through the life of the order. The expeditor will review all elements of the order to ensure that the vendor understands the various submittal, testing, and deliveryrequirements. The expeditor will seek to gain

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a thorough understanding of the vendor's engineering, purchasing, andmanufacturing operations as they relate to the particular order. Thisenables the expeditor to monitor all elements of the vendor's performancewith the intent of anticipating and resolving problems before they seriouslyimpact the project.

Experienced professional expeditors serve as a key bridge between theengineering and purchasing activities that specify and order materials andthe field operations that are dependent on those materials for theirprogress. Accurate and dependable expediting information is essential forinformed management of the project, and facilitates the mobilization of buyer and vendor resources in response to problems or delays.

Quality Assurance and Quality Control

The management of construction quality has become a major concern ofowners and contractors because they now realize that quality affects theproject schedule, ultimate cost, and performance of the constructed facility. Materials quality, which is an important component of construction quality, depends for its success on an unbroken chain of positive actions by many different parties. (See Figure 2). Quality assurance includes verification that all participants in the fabrication and inspection program follow established and specified procedures. Management must emphasize that quality is one of the most important, if not the most important, function ofmaterials management. Owners and contractors should emphasize that qualityperformance is a major factor in the selection of suppliers. Thus, supplierquality is an important link in the quality of the constructed facility.

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Owners and contractors must continually impress on their own employeesas well as suppliers the need for quality products. The purchase orderspecification and inquiry documents should state the requirement forinspection. Details of the inspection such as test dates, forms, andcertifications should be established with the vendors prior to the actualinspections. Shop documentation must be meaningful, with required datareflecting actual results of fabrication and testing.

Transportation

The movement of equipment, materials, and personnel to the job siterepresents a unique and specialized element of materials management. Experienced traffic personnel can have a positive impact on the execution ofthe project while minimizing transportation cost.

Significant savings are possible through the use of national agreementsor negotiated project transportation agreements, and through variouscommercial arrangements for the transportation of goods, materials,documentation, or personnel. Special consideration is required in settingterms, thereby determining the proper point for transfer of materialsownership and liability. The prime contract, especially insurance clauses,may have a direct impact on the purchasing terms and conditions concerningtransportation.

Early specialized activities in the project planning phase, such asproperly performed route surveys and consideration of local trafficconditions, can significantly affect later execution of the work. Thesefront end efforts affect engineering by defining shipping envelopes, weightlimits, and schedule limitations. The traffic function or group hassignificant input to purchase documents including packing specifications,shipping instructions, invoicing instructions, and document requirements. This group's expertise is necessary in developing routing guides, shipmentprogress reports, and troubleshooting as transportation problems develop.

Transportation or traffic expertise aids the materials management teamin handling numerous types of special loads from delicate electronics tomassive modules, each requiring transport equipment that is speciallydesigned or of limited availability. Knowledge of the requirements, source,and availability of this equipment may be critical to successful execution of the work. Transport permitting requirements also must be considered early in the project. Assigning the above responsibilities to suppliers may present an easy upfront decision, but can later lead to painful lessons if the expertise is not available to the materials management team to ensure that, traffic functions are handled properly.

Traffic or logistics for foreign sites presents an added dimension tothe transportation requirements for a project. Each phase of thetransportation effort is more complex, with often stringent requirements dueto ocean shipment and transportation to remote areas of the world. Eachcountry's customs requirements are unique with potentially significantduties, taxes, and delays that must be considered in the planning efforts.

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Site Materials Management

Site materials management extends beyond the functions of receiving,storing, and issuing materials. It is affected by other elements of projectmanagement including engineering, procurement, expediting, and qualitycontrol. it is important, therefore, that the site functions be well plannedand executed, and that they be an orderly and logical continuation of anoverall materials plan. Site materials management functions are detailedfunctions that increase in complexity with the size of the project, and mayrequire specialized skills and talents.

The large volumes of structural, piping, and electrical materials thatmust be dealt with on large industrial projects make the use of computersystems at the site a requirement. The ability of these systems to catalog,sort, and combine materials by drawing, systems, areas, or other category and to allocate materials to a specific work plan can be a significant aid to craft planning. Full benefit is realized, however, only if the systems put in place on the job site are fully understood, accepted, and utilized by the crafts. This interface is the key to achieveing the substantial cost savings that are possible through the use of this technology.

Properly managed site procurement is important to the success of theconstruction effort because of the potential to impact craft productivity bylate identification, purchase, or delivery of field purchased items. Thecrafts depend on this group not only for permanent plant materials, but alsofor parts, supplies, tools, equipment, and services needed in the erectionprocess.

Receiving, storage, control, and distribution of materials at the jobsite are functions which appear routine on the surface, but can significantly affect project cost and schedule. Lost, damaged, misplaced, or improperly stored and maintained equipment and materials can result in expensive delays and disruptions. These and many other materials problems can be reduced or eliminated with the proper planning and implementation of the necessary materials management systems and procedures.

Surplus Materials

All projects can expect a certain amount of surplus; however, the key tosuccessful surplus materials management is a well conceived and well executed materials management plan. Various shortcomings in the engineering, materials control, procurement, and field materials management phases of the work may result in surplus materials. Understanding and anticipating these potential problem areas are the first steps in minimizing surplus.

Many causes of surplus can be identified. Surplus can be caused by apoorly performed materials takeoff (MTO). An off shoot the inadequate MTO is an excessive "bump" factor that may prevent shortages of some items, butresults in surplus elsewhere. Engineering revisions and changes are yetanother cause of surplus, particularly if the MTO occurs early and systemsare not adequately responsive to change. Inadequate construction materialsmanagement practices also may lead to surplus, particularly on fast trackprojects. Primary causes are

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duplicate buying and poor control systems/procedures leading to procurementof unnecessary materials.

Minimizing surplus on a project requires a proactive and timely systemof communication among all functions involved in the materials acquisitionand installation cycle. For example, design changes must be immediatelycommunicated to halt the acquisition of materials no longer required. Similarly, substitutions in the field must be immediately communicated sounused materials may be considered in the remaining design. An individualshould be identified as the focal point with the responsibility to trackthese types of changes as well as periodically to review and adjust min/maxinventory limits.

Certain procurement practices can reduce surplus through the use ofblanket price agreements. Releases are issued when engineering issufficiently complete yet will still meet field requirements. Purchaseorders for bulk materials and other commodities should include a materialsreturn provision allowing return of surplus.

Options for disposal include using the surplus in alternative services,using the surplus materials on other projects, returning them to the vendor,or selling them to a third party. All options require complete records andtimely reporting to achieve optimum results. The best option is to do thenecessary planning and to implement the necessary materials managementsystems to reduce surplus at the source.

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4. SPECIAL APPLICATIONS

International Project Materials Management

International materials management programs for construction projectsfrequently operate under some conditions over which the contractor has little or no control, and which can have a severe impact on the efficiency and cost effectiveness of the construction effort. Political and socioeconomic conditions can play a key role in the success of the project. It is not uncommon to deal with host-country government agencies that have interests at opposite ends of the spectrum. For example, agencies responsible for controlling importation of materials and equipment into a country have a vested interest in protecting and developing local resources. On the other hand, government financial authorities may negotiate export credits from other nations that have reciprocal agreements or requirements to maximize the use of granting nations' resources in order to qualify under loan agreements. This forces production outside the host country and places the owner or contractor between the import and financial authorities.

The materials management group should coordinate its activities closelywith other project functions early in the planning phase, and convey arealistic understanding of the time required for materials delivery,transportation, import licensing, and customs clearance. The owner orcontractor must be made fully aware of the impact of delays in schedules dueto importation, licensing, local supplier problems, or other risks; incertain cases the owner may be able to influence the situation. Other issues to be considered in the planning of international operations include:

o Surveys in the host country prior to procurement operations to gain information on factors such as imports and licensing, logistics facilities, labor, national monopolies, local suppliers, and subcontractors o The extent of international financing and international procurement o Banking requirements, including the major financial institutions o The extent of local funding and payment arrangements o The internal infrastructure: camps, food, medical facilities, housing, water, transportation and telecommunications, and sanitary conditions o Required expatriate and local staff needs o The effect of local labor laws on costs, proficiency, training, and number of employees required o The extent of national production capabilities to meet particularly high demand or high quality procurements o The need for extensive exchange of information between nations, owner, contractor, and worldwide suppliers o Methods of assuring quality in the host country and third countries. This is an especially delicate and somewhat intractable problem in underdeveloped/developing countries.

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International projects require personnel with special competence inmaterials management. Due to a variety of procurement and logisticalcomplexities and cultural and language barriers, managers should haveinternational project experience, negotiating skills, interpersonal andorganizational skills, and the ability to adapt to a constantly changingsituation.

The Small Project and Materials Management

The concepts of materials management are basically the same for large orsmall construction projects. The small project's approach to theimplementation of these concepts can vary significantly, however.

While planning and communication are two significant factors determiningsuccessful materials management on all projects, differences between smallprojets and their larger counterparts include:

o Organization and staffing o Forms and documentation o Computerization o Vendor relations

Smaller projects dictate smaller organizations. Capable personnel areessential because they perform multiple duties. For example, theresponsibility for materials management and engineering may be combined. Smaller projects may not be able to afford, and may not need, the same extent of formal procedures, forms, and documents as required for a larger project. It is important that the owner and contractor have standing procedures and forms in place and ready to go.

The cost of computerization may be prohibitive for smaller projects.Volumes may be such that a manual approach makes sense. Project materialsvolumes, schedules, and conditions should be considered when evaluatingcomputerized systems for smallers projects.

Project success hinges on the contractor's ability to furnish materialsand to perform on schedule. Because of the relatively low value ofindividual orders placed on small projects, the owner's and contractor'srelationship with vendors is critical to the success of the materialsmanagement process on small projects.

Commercial Project Applications

Sophisticated materials management programs are most frequentlyassociated with large energy, process, or industrial projects involvinghundreds or thousands of individually engineered, fabricated, and bulkcomponents. Many of the procedures and systems discussed in the Handbookcontemplate such an application, since these projects have the greatest needfor, and can derive the most benefit from, a properly managed materialsprogram. Other types of construction projects may benefit significantly from materials management.

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Commercial construction, for example, while in many ways different fromindustrial construction, has its own materials management challenges.

Industrial projects may involve large horizontal complexes constructedin rural or remote areas employing the contractor's own forces and utilizingmaterials and equipment purchased by or under the control of the owner orcontractor. In contrast, commercial projects may involve vertical(high-rise) facilities constructed in congested urban locales, employingeither largely or totally subcontracted forces and utilizing materials orequipment purchased by and under the control of the owner or subcontractors. For the commercial project, each of these conditions presents different butnonetheless valid opportunities to improve the efficiency of the construction effort through effective project materials management.

A key question in the commercial construction environment involvesassignment of the fundamental responsibility for the materials managementfunction. For example, should the general contractor, who has subcontractedthe entire project and serves only as a construction manager, bear thatresponsibility; or should it be assigned to the individual subcontractors who will actually requisition, procure, receive, and install the materials and equipment? The answer depends on a number of factors which may vary from one project to another, depending on the size and nature of the project and the respective capabilities and responsibilities of the contractor and the several subcontractors. Ultimately, the general contractor must monitor the overall progress of the materials management function to insure the progress of the project. In addition, the owner may specify and assign certain materials management responsibilities through the contract. In any case, the materials management function can be successfully integrated into such nonindustrial applications and produce benefits similar to those recognized in industrial projects.

Special Construction Techniques

Over the years, interest in special construction techniques forindustrial plant construction has increased. This is due largely to an acute awareness of project cost, schedule, quality, and overall environmental impact implications, all of which take on a new meaning in today's competitive project environment. Special construction techniques often can result in reduced capital costs, earlier plant completion, improved quality, and lower level of socio environmental impact on surrounding communities. While the use of special construction techniques is not always the answer toaddress these concerns, given the right circumstances, these benefits willresult. Each project must evaluate the constraints which impact theconstruction to determine whether a fully prefabricatedapproach, partially prefabricated approach, or a fully conventional "stickbuilt" approach is the proper way to construct a given facility.

In the case of modular construction, several factors bear heavily onexactly how the work should be performed. First, the individual modules arefrequently produced in a manufacturing environment as opposed to traditionalconstruction. In a manufacturing environment, timely delivery of materials,equipment,

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prefabrications, and preassemblies to the assembly line is absolutelyessential. Unlike conventional construction where materials deliveries arephased, all materials should be onsite and available when module assemblybegins. A second factor related to the manufacturing environment is theimpact of "work-arounds." Work-arounds in modular construction are notusually an option. Because of the desire to limit the number of modules, they are usually quite compact with a high density of components. Returningto a previous work area in a module to install a component that was notavailable when needed can be costly. Also, redeployment of work crews toinstall late materials will adversely impact the careful planning that goesinto modular construction.

Planning must be sufficiently detailed to assure that critical factorsare not overlooked. Planning takes on additional significance because moreindividuals and entities are involved with associated interfaces, such asmodule fabricators, transportation companies, and state and local highwayofficials.

The procurement effort must be conducted with greater control overvendor activities. Qualification of vendors supplying materials will require a more rigorous effort. A higher level of contractor expediting, inspection, and contract administration will be required, all dedicated to timely materials deliveries to the module fabrication site.

When module fabrication is subcontracted to a lower tier contractor, thesubcontract administrator becomes, for all practical purposes, a miniprojectmanager. Because the module will likely be a fully integrated, multisystementity, the subcontract administrator must be prepared to manage all aspectsof project execution to assure timely completion of the unit.

Materials control techniques also will greatly impact project success.Again, because of the fast track nature of most modular construction, earlytakeoffs are essential. Takeoffs, tracking, and reporting corresponding tothe individual modules are critical. It is necessary to perform these taskson a module-by-module basis because the modules will be assembled on anindividual basis in assembly line fashion, and the planning and controlactivities must support that plan.

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5. CONCLUSIONS

Construction materials management has made major improvements in thelast decade, and indications are that continued advancements will be madethrough automation of the many repetitive functions, the ability tocommunicate information on materials worldwide, and the use of othercost-effective measures. It is essential that materials functions havevisibility in the organization and that individuals assigned to the materials activities be properly trained, motivated, and recognized for their contributions.

With these advancements, materials management can provide better toolsto the work force, improve cost effectiveness, and have a significant impacton the ability of the U.S. construction industry to compete in both thedomestic and the international marketplace.

CII's Project Materials Management Handbook is a comprehensive guide toimproved materials management. The reader is encouraged to study thespecific chapters for more detailed information.

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REFERENCES

1. Bell, L. C., and Stukhart, G., Costs and Benefits of Construction Management Systems, Auburn University and Texas A&M University, A Report to the Construction Industry Institute, August 1986.

2. Modern Management Systems, Construction Industry Cost Effectiveness Project Report A-6, The Business Roundtable, November 1982.

3. Report on Materials Management, Construction Industry Cost Effectiveness Project, Appendix A-6.5, The Business Roundtable, February 1983.

4. Cost and Benefits of Materials Management Systems, Construction Industry Institute, Publication 7-1, November 1986.

5. Dodd, et al., Project Materials Planning Guide, Texas A&M University, A Report to the Construction Industry Institute, May 1987

6. Stukhart, G., and Bell, L. C., Attributes of Materials Management Systems, Texas A&M University and Auburn University, A Report to the Construction Industry Institute, April 1985.

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NOTES:

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Materials Management Task Force Membership

Lansford C. Bell, Auburn UniversityFrederic W. Booth, Turner Construction Co.Jim Carmody, Morrison Knudsen Engineers, Inc.Glenn Dodd, Brown & Root USA, Inc.James Early, BE&K Construction Co.Edward Ischy, Houston Lighting & Power Co.James C. Jones, Amoco Chemicals Co.Preston L. Jones, United Engineers & Contractors, Inc., Stearns-Roger Div., ChairmanPaul C. Mashburn, RUST InternationalGerald G. Minnich, Owens-Corning FiberglasNorman P. Nunn, Fluor DanielSioux Rhiddlehoover, ARCO Oil & Gas Co.Edward M. Ruane, J. A. Jones Construction Co.George Stukhart, Texas A&M UniversitySteve Sutton, FMC CorporationDouglass J. Warner, Chevron Corp.

Past Members

Bob Bishop, PPG IndustriesBob Bush, Morrison Knudsen Engineers, Inc.Richard Carr, Brown & Root USA, Inc.John Cato, H. B. Zachry Co.Frank Cuomo, Scientific DesignSandy Fitzgerald, ARCO Oil & Gas Co.David Hertweck, ARCO Oil & Gas Co.Milt Kostner, Fluor DanielRichard Mayes, RUST InternationalMike McCorkle, Fru-ConS. J. Niffen, Scientific DesignEdward Owen, Fluor DanielP. H. Pinson, ARCO Oil & Gas Co.Robert Wootten, DuPont, past Chairman

Editor: Rusty Haggard

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