Inventory Control And Management In Construction Industry Of Pakistan
Inventory management is one of the most important aspects of Construction industry. In Pakistan although inventory management is not in common use but consultants and contractors are aware with the fact that it can play a vital role in success of a project. Construction projects depends upon having the right men with reliable skills and equipment that can complete the project with all the requirements on predicted time and estimated budget. Thus any significant contribution made by the site manager in reducing material cost will go a long way in improving the profitability and the rate of return on investment. Importance of material management in construction industry can be accessed through the fact that about 50% to 60% of the total project cost goes to the materials and its management. This study focuses on material management based on their consumption and wastage caused by the construction industry practices and identify the causes of wastage of a material in construction industry of Pakistan. In this study inventory management analysis techniques i.e. ABC Analysis, EOQ Analysis and RII Analysis techniques were applied for finding out the wastage for an office construction site at Bath Island in Karachi and adequate solutions were provided in this project for controlling the wastage of construction materials. The analysis of data collected through questionnaire shows that respondents agree with the following causes of wastage of materials that are damage by mishandling and re-work due to poor workmanship, inadequate supervision, and poor site security. This study will have far reaching implications on construction industry of Pakistan as it will make managing materials on site more efficient and easier to control.
One of the most important aspects of any business is inventory management. Those who have never worked in the business sector may not understand the importance of efficient inventory management. But, the reality of it is if contractor don't have control of the inventory, the needs of customer cannot be identified accurately, For the sake of fulfilling the needs and requirements of customer inventory management is needed for sure. Without inventory management it would be difficult for any company to maintain control and be able to handle the needs of their customers. Whether to use a fulfillment company or ship products yourself you need to know where your inventory is and where it's going. While inventory management has always been important, it has become more important over the past several decades. As the needs of company’s increases, they must in turn increase demands on their suppliers. In order to ensure suppliers to have the goods their customers need, it is necessary for them to maintain excellent and accurate inventory management.
Construction projects depend upon having the right people with right skills and equipment that are able to deliver the project on time and on budget. Having the right materials, in the right place at the right time is equally important and having the cash flow and capital to procure the labor and materials is also important.
Materials management includes procurement, shop fabrication, logistics, supply chain management, production on site and field servicing. The supply chain is a covenant term used to describe a complex web of activities. The use of new equipment and innovative method of material handling has influenced changes in construction technologies in recent years. Modern methods of materials management have been embraced by the manufacturers across a wide range of industry sectors outside of construction.
Inventory Management is simply the process by which an organization is supplied with the goods and services that it needs to achieve its objectives of buying, storage and movement of materials. Inventory is seen as incurring costs, or waste, instead of adding and storing value, contrary to traditional accounting.
Material management is the 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. The goal of material management is to ensure that materials are available at their point of use when needed, the material management system attempts to ensure that the right quality and quantity of materials are appropriately selected, purchased, delivered, and handled on site in a timely manner and at a reasonable cost.
Inventory management systems are a growing trend for all kinds of industry especially in the construction industry of Pakistan. The IMS (Inventory Management Systems) is the future of the modern stock management and the inventory efficiency in developing countries like Pakistan. It can be used for efficient inventory management and timely order of materials. It can also reduce delay and risks in a project. It also helps in controlling the wastage of materials on site. It can also provide economic stability and efficiency in future construction projects. Inventory management software can be a big growth market for the major industries for streamlining their inventory and stock.
This chapter includes the pertinent literature that was kept under consideration to understand the concept and to extract the benefits of inventory management in construction industry. This chapter also clarifies the demerits of not following inventory management techniques. The literature also enlightens the wastage of materials on the construction site and how it can be controlled.
Literature that was kept in consideration includes basic elements of construction material management, role of inventory management in material management including inventory terminologies & classification, Inventory process, inventory control systems, key performance indicators of inventory management systems, inventory models and optimization of inventory with importance of material resources planning to keep just in time inventory.
Inventory Management
The term inventory refers to the goods or material used by firm for production or sale. Inventory control refers to coordinating availability, controlling, utilization and procuring of materials. Inventory control is the course along activities with the purpose of getting to the right inventory in the right place at the right time and in the right quantity and it is directly connection to the production functions of any organization. The project develops an inventory management for the construction project. The need for the project is to present the problems, facing by the companies in material requirements and to provide proper material management. Material management is an essential management tool which will be improving the productivity of a construction industry. The management of material is related to all the periods in the construction site and also throughout the construction phase. A poor management can impact on overall construction site, time, cost and quality. Construction management is the overall planning, sourcing, purchasing, moving, storing, coordinating and controlling the project form starting to the end. The objective is to produce a functionally and financially feasible project. The construction industry is consistent with five major sector, such as residential, environment, heavy civil, industrial and commercial.
Objectives of Inventory Management
The main objectives of inventory management in the construction industry based on the past researches are:
- To minimize capital investment in inventory by eliminating excessive stock.
- To ensure availability of needed inventory for uninterrupted production and for meeting consumer demand.
- To provide a scientific basis for planning of inventory needs.
- To tiding over the demand fluctuations by maintaining reasonable safety stock.
- To minimize risk of loss due to obsolescence, deterioration, etc.
- To maintain necessary records for protecting against thefts, wastes leakages of inventories and to decide timely replenishment of stocks.
