Materials
constitute a major cost component for any Industry. The total cost of installed
materials (or Value of Materials) may be 60% or more of the total cost,
even though thefactory cost may be a minor part of the total, probably less
than 20-30%. This is because the manufactured item must be stored, transported,
and restored before it is put in place or "consumed" at the site. The
total cost of materials will include, in addition to the manufacturer selling
cost, the cost of procurement (cost of placing processing and paying the
material, physical distribution, the distributor's cost, and the transportation
of materials), and the site-handling costs (cost of receiving, storage,
issuing, and disposal). The efficient procurement and handling of material
represent a key role in the successful completion of the work. It is important
for the contractor to consider that there may be significant difference in the
date that the material was requested or date when the purchase order was made
and the time at which the material will be delivered. These delays can occur if
the contractor needs a large quantity of material that the supplier is not able
to produce at that time or by any other factors beyond his control. The contractor
should always consider procurement of materials is a potential cause for delay
(Willis, 2008). Poor planning and control of materials, lack of materials when
needed, poor identification of materials, re-handling and inadequate storage
cause losses in labor productivity and overall delays that can indirectly
increase total project costs. Effective management of materials can reduce
these costs and contribute significantly to the success of the project.
Material
Management
Different
researchers provide different definitions for material management, therefore
different definitions can be found in different references. Basically, material
management is concerned with the planning, identification, procuring, storage,
receiving and distribution of materials. The purpose of material management is
to assure that the right materials are in the right place, in the right
quantities when needed. The responsibility of
one department
(i.e. material management department) for the flow of materials from the time
the materials are ordered, received, and stored until they are used is the
basis of material management.
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