Material management concept has gained paramount importance in the construction industry. Poor material management often causes costly risks as told by the construction informer article. How can the construction giants make sure that no mistake will occur in handling materials? What are the measuring metrics your plan of material management? Can an ERP help you in that? If yes, how?
Tighten the indirect costs
Material Managements is kick started once the tender is awarded followed by budget preparation and material list against quantity, rate as well as other specification .This work plan ensures that the particular project has its checklist ready and know what to expect in future.
Anything that is not helping in constructing or installation is indirect cost within this industry. A supervisor to workers, a tent to workers, depreciation, overheads all comes under the canopy of indirect cost .Keeping a check manually is not possible and hence CIMS MM sets the limit for the budget allocation and spending for indirect costs and request proper justification on exceeding the limit. There by it properly monitor and record the spending of indirect costs.
Know Your Threshold
Every project as well as every little task has its own critical limit beyond which it is a strict NO. It can be men, material or cost. CIMS eliminates the risk of going beyond the control by allowing to set up a threshold and second level of approval is required on crossing the threshold.
This reduces the risk, shrinks the cost and boost up the project handling efficiency.
Art of right procurement
The report suggests that materials cost about 50% to 60% of the project cost. While having a lion share of the cost Material management demands a careful and systematic approach for the procurement. Assuming the procurement head decided to buy 1000 bricks from A,B,C .He got that quotation by sending an enquiry to the A,B,C .Now all he has to do is check out the comparative statement and the report generated. A offered for 100 $ while B for 90 $ and C for 110 $ and the report showcased “ B” in yellow “A” as green and “C” as red. As a best bet you are expected to choose the yellow (B) with minimum cost but your trust with quality offered by green (A) had made to select A. This can be done by hassle free by filling the remarks column as justification for your decision to go out with the next best bet.
Balancing the Need and Supply
CIMS carefully tracks the supply of materials to each unit and also the items returned on issues of quality and damage. There may also be cases where items return on not usage. Both the cases are trapped by our CIMS system and maintain accurate record of the material’s entourage.
Often the industry faces non alignment in the real and virtual data making the physical verification necessary for the materials. CIMS captures it by its excess and shortage note. This physical verification is mandatory and often most of the ERP miss out this point. Still wondering what more CIMS Construction ERP can do for material management? Sign up for schedule a demo and explore.