We emphasize the importance of material management in the construction industry in our blogs every now and then. Unfortunately, many construction contractors and project owners fail to acknowledge its significant impact on overall project success. It is true that, as a general contractor, you will continuously work under the immense weight of responsibility for almost every construction project component.
From labour management to equipment operation, there is so much to oversee. However, we have seen numerous construction projects meet their demise as a result of poor attention to material management.
Some of you might shrug and snort in disbelief, but the truth remains that material management is the single most crucial element of any construction site.
According to a study by ResearchGate, construction materials account for 50% to 60% of the total costs of any construction project. Can you imagine what slight mismanagement of this element could cost you? Many project owners believe that generous investment is the key to the success of their projects. In truth, when material mismanagement is a common occurrence at your site, injecting money into a project is like flushing it down a toilet.
In order to save you from the tragedy of watching your hard work go down the drain, we use this blog to warn you regarding the financial and reputational damage and consequences of poor material management.
How Does Poor Construction Material Management Impact A Project?
Every aspect, task, and activity on a construction site is interdependent. Thus, mismanagement in any part will ultimately affect all the other components and the project as a whole. For this reason, most of the potential impacts of material mismanagement are more of a chain of events rather than independent consequences.
Inferior Quality Of Raw Materials
Material management is not just about buying, stoning, and dispatching raw materials. In truth, material management is quite a challenging and complex task that requires due diligence and care. In this regard, finding a reliable supplier that can consistently provide high-quality raw materials is the biggest concern. If a material manager disregards this initial supplier search and scrutiny, they are likely to fall into the hands of unprofessional people who will sneak inferior quality products into each order.
This will either lead to a compromise on overall project quality or high replacement costs.
This point is closely related to the one above. Besides inferior quality products, a careless and lazy material manager may also pay a higher price for goods available at relatively lower prices from other suppliers. However, due to their indifference and inattentiveness, they fail to do proper research and eventually purchase expensive materials, leading to peaking project expenditures.
Increased Material Waste
The mismanagement story does not end at the material ordering phase. Once the materials have reached their desired storage area, their useful life will depend upon the measures taken to ensure the site is in a conducive condition and ready to receive the materials.
Unfortunately, very few managers pay attention to this crucial step only to reap unpleasant and costly results in the form of damaged, degraded, stolen, and decayed materials.
Similarly, if the material is dispatched to the site and its usage is not adequately monitored, the workforce might disregard the importance of the materials and mishandle them during use. The latter also increases material waste.
All of the material management failures mentioned above will lead to budget overruns and uncertainties in the future.
Decreased Profit Margins
When your costs exceed your budget, you often have two choices. You can either pass on the extra costs to the client and demand an increase in the preset project price or bear the burden and decrease your profit margins. If you chose the first option, the client would ask you to explain why you weren’t able to provide a reasonable estimate beforehand. This will ultimately lead to the loss of your credibility in your client’s eyes.
In contrast, if you decide to bear the costs, your profit margins will be significantly reduced. In order to avoid such dilemmas, we recommend that you hand over the material management task to a reliable general contractor.
Project Delays And Loss Of Goodwill
All these, in combination, in the end, lead to numerous project delays, compromises on quality, and dissatisfied clients. As a construction contractor, your biggest weapon to prosperity is word-of-mouth publicity. However, improper material management will only result in negative hype and loss of goodwill.
About Taurus Projects
From site preparation to civil earthworks, material management, and fleet management, we have what it takes to diligently handle a construction project from every angle. Learn more about Taurus Projects and our services.
Contact us now to ensure the timely and as-budgeted completion of your project.