Material Management

Dr Adewale Abimbola, FHEA, GMICE.

www.edulibrary.co.uk

Aim

and Objectives

Aim: Material Management�Objectives: At the end of the lesson, the students should be able to:

• Perform inventory optimisation techniques: safety stocks and reorder point.
• Discuss the impact on a project of items with long lead-times and how best these can be managed.
• Evaluate just-in-time delivery system.

Intro. Quiz

List the different types of material needed on a typical construction site.

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Just in Time Deliveries (JIT)

• Originated with Toyota in the 1960s.
• Industrialized prefabrication systems and concrete deliveries follow JIT.
• Challenges in the construction industry to fully go JIT because of external factors like unpredictable weather, long haul, etc.
• JIT benefits: reduced inventory costs, efficient material handling.

(129) Just in Time by Toyota: The Smartest Production System in The World - YouTube

(1) NewArk Hotel construction timelapse: 15 storeys in 48 hours. - YouTube

Inventory Optimisation

• Develop a method for convenient, timely, and incremental material deliveries.
• Prevent work interruptions for material handling.
• Aim for efficient material storage and handling to enhance workflow.

Automated Inventory Management System

How To Set Up A Barcode System | inFlow Inventory software

Safety Stock

Z-score MS Excel formula = NORMSINV()

Worked Example 1:

A project manager records the daily use of A4 photocopier paper in a month (Table 1). She has determined that the lead time is 3 days and the service level is 95% (This means the safety stock levels will cover for 95% of all probable requests).

Determine the safety stock; the additional quantity held in inventory to mitigate the risk of a stockout.

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Safety Stock

Safety Stock

Reorder Point

Worked Example 2:

A project manager records the daily use of A4 photocopier paper in a month (Table 1). She has determined that the lead time is 3 days and the service level is 95% (This means the safety stock levels will cover for 95% of all probable requests).

Determine the reorder point to avoid running out of stock.

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Reorder Point

Reorder Point

Self-assessment Task 1

A site supervisor monitors the daily consumption of concrete blocks on a construction site over a month (Table 1). After establishing a lead time of 5 days and a service level of 92%, calculate the safety stock and reorder point.

Self-assessment Task 2

A civil engineering firm is managing the construction of a major bridge project. The project requires careful management of specialised materials such as high-strength steel cables, pre-stressed concrete beams, and custom-designed expansion joints.

Given parameters:

• Lead time for steel cables: 12 weeks

• Service level: 98%

Calculate the safety stock and reorder point.

Note: Use MS Excel to complete this task.

Group-assessment Task

• Discuss the effects of extended lead-times on project timelines, and explore effective strategies for their management.
• Evaluate the merits and drawbacks of implementing a just-in-time delivery system in construction projects.
• Analyse the significance of well-planned delivery schedules and investigate the potential ramifications of inadequate planning on the overall construction programme.

References/Bibliography

• Canter, M. R. (1993) Resource management for construction. London: Macmillan Press Ltd.
• Hans, R. (2024) What is inventory reorder point in inventory management? Available at: https://www.deskera.com/blog/inventory-reorder-point/ (Accessed: 01 March 2024).
• Henry, R. (2019) Full Guide to Reorder Point (ROP): Definition, Formula & Calculator. Available at: https://www.extensiv.com/blog/reorder-point-safety-stock (Accessed: 01 March 2024).
• March, C. (2009) Operations management for construction. London: Spons Press.
• Pearson (2017) BTEC national construction student book. London: Pearson.
• SITMI Academy (2023) Safety stock | reorder point rop | economic order quantity eoq | min max levels calculation in excel. Available at: https://www.youtube.com/watch?v=pypb4WOOLFI&t=938s (Accessed: 01 March 2024).
• Thieuleux, E. (2022) Safety stock formula & calculation: the 6 best methods. Available at: https://abcsupplychain.com/safety-stock-formula-calculation/#:~:text=To%20get%20the%20safety%20stock,of%20the%20lead%20time%20L.&text=We%20get%20a%20Safety%20Stock,reorder%20point%20of%201345%20pieces. (Accessed: 01 March 2024).