Impact of Material Management on Productivity—A Case Study

TLDR

Formal material management programs can yield significant construction cost savings, but small‑ and medium‑sized contractors often doubt their cost‑effectiveness. The study aims to quantify the adverse impacts of ineffective material management practices. Using data from an ongoing construction productivity study of two steel erection projects, the authors calculated daily output with credit rules, identified days of adverse conditions, compared actual to expected productivity to estimate lost work‑hours, and compared the resulting cost impact to that of effective material management. The analysis yields a benefits/cost ratio of 5.7, indicating that improved material management is highly cost‑effective.

Abstract

Recent CII research has indicated that formal material management programs have the potential to yield significant construction cost savings, yet small‐ and medium‐sized commercial contractors may not feel that an integrated material management program is cost effective. The objective of this paper is to quantify the adverse impacts of ineffective material management practices. Data collected as part of an ongoing construction productivity study is used to analyze and compare the effects of material management practices on two steel erection projects. Rules of credit were applied to calculate the daily output. Adverse conditions caused by the lack of an effective material management program are identified, and the days on which the conditions occurred are noted. For these days, the actual daily productivity is compared with the expected productivity to determine the number of work‐hours lost. The cost impact is compared to the cost of effective material management. The results show a benefits/cost ratio of 5.7, favoring greater attention to material management.