This topic is very useful for the construction management student. This topic is very important for the researcher in management field.

1. Presentation on
Presented By:
Mr.Bande Kiran B.
Assistant Professor
S.R.E.S‘s College of Engineering,
Kopargaon
“COST REDUCTION USING SCM APPROACH TO
THE FLYOVER CONSTRUCTION PROJECT”

2. AIM OF PROJECT
This study is to reduce the cost of construction in SCM
adoption in a flyover and also increase awareness in the
construction sector to avail utmost benefits by adopting
SCM as tool.

3. OBJECTIVES
 To study the conventional SCM along with its nodes involved
in a flyover construction project.
 This study is to identify shortcomings in traditional SCM
used in a flyover construction.
 To investigate the reasons which are responsible for the
existence of the shortcomings faced by the supply chain.
 Identifying the ways and means of making the current supply
chain more effective and efficient.

4. Project Details
1 Name of the Project Construction of flyover at Saswad
phata,Hadapsar,Pune
2 Client Pune Municipal Corporation ( PMC ),Pune
3 Name of the Contractor M/s J. Kumar Infrastructure Ltd., Mumbai
4 Name of Consultant
appointed by Client
M/s S.N. Bhobe Associates, Pune
5 Name of Project
Manager
Mr. S.V. Patil
6 Head Office Mumbai
CASE STUDY

5. Proposal of Flyover
Flyover Length 590m ( Including R.E Wall)
Total Cost of Flyover Rs. 24 crores
Total Duration of Construction 2 Years
Project Start Date Dec. 2011

7. Supply Chain Management Model for the Construction Industry
Source: Syed Mahmood et al, ‘Supply Chain Management In Construction’, Delhi Business Review, Vol.3,
No.1(2002),p. 26-30.

8. Supply Chain of Project
Material, Equip.& Labours
Project Requirements
Feedback
Client
PMC
M/s S.N. Bhobe
Associates
Designer
Mr. Kengar
Project Engg.
Mr.Shashikant
M/s J. Kumar
Infrastructure
Ltd.
Hydra, Tractor,
Dumper, JCB, Transit
Mixer, Crane
Material Producers
Cement-ACC & Birla- Karnataka
& Ultra Tech -Gujrat
Sand- Bhima River
Aggregate-Dabhade Crusher
Steel- Tata , Jindal & JSW
Hydra, tractor-
Mahindra
T.M- Tata
Crane- Photon
Procurement
services, Unions-
Store room &
Labour camp
Labours
Skilled
Unskilled
Project Database
Suppliers
a)Cement- Mr. R. R. Kirad
b)Sand- Mr. Tupe & M/S
Bhairawnath Enterprises
c) Aggregate- M/s Sai
Balaji, M/s Matoshri
Enterprises, M/s Jai Ganesh
Enterprises
d) Steel- M/s S.S. Steel
Corporation , Bhosari, M/s Jai
Steel , Katraj, & M/s Bhushan
Steel , Shivajinagar
Labour Contractor
Mr. Sharma
Mr. Pathan

9. Supply Chain Assessment
• Case study analyzes the different supply chains involved in the
project.
• Supply chain is assessed by direct observation and personal
interviews.
• The case study merely applied to the part of supply chain
coordinated by main contractor.
• The case study assesses the supply chain in three parts i.e.
material, labour and equipment.

10. Source: Tender Documents

11. Material Chain
• This chain is very important because materials cost of project
is approx. 65% of total project cost.
• The proper and efficient management of material chain
increases the profit of overall project.
• The material chain starting from raw materials, material
producers, material suppliers , bidding of suppliers and finally
material reach on store yard.
• For this project a repetitive materials have taken in to
consideration i.e. Cement, Sand, Aggregate and steel.

12. General Material Chain
Supply Supply Supply
Demand Demand Demand
Information
Raw
Material
Material
Producer
Material
Supplier
Store
Yard

13. Cement Chain
ACC Cement
Factory at
Wadi,
Karnataka
Birla Super
Cement
Factory at
Shedam,
Karnataka
Ultra Tech
Cement at
Gujrat
Supplier
Mr. R.R. Kirad
Cement Bags
Stored in
Store Yard

14. Steel Chain
Jindal Steel &
Power Ltd.,
Jharkhand
Tata Steel
Ltd.,
Jharkhand
JSW Steel
Ltd.,
Karnataka
M/s S.S.
Steel
Corporation,
Bhosari
M/s Jai Steel
Corporation,
Katraj
M/s Bhushan
Steel
Supplier,
Shivajinagar
Steel Stored
in Store Yard

15. Aggregate Chain
M/s Jadhav
Crushing
Plant,
Wagholi
Supplier 1
M/s Sai Balaji
Enterprises
Supplier 2
M/s Matoshri
Enterprises
Supplier 3
M/s Jai
Ganesh
Enterprises
Aggregate
Stored in
Store Yard

16. Sand Chain
Source
Bhima River
Supplier 1
Mr. Tupe
Supplier 2
M/s
Bhirawnath
Enterprises
Sand Stored
in Stored
Yard

17. Problems occurred in Supply Chain
Multiple Suppliers
• Increase material Cost
• Increases Lead Time
Short term relationship
• little scope for payment and order flexibility.
• opportunity to share market information is also reduced.
• contractor faces uncertain demand for the product.

18. Variability in supply chain
• Lack of information sharing and visibility in the supply
chain
• Lack of supply chain coordination and integration
• Poor planning
• Delays in the supply process
o Design changes
o Obstruction
o Traffic diversion
Synchronization of material flows
• Improper coordination between suppliers & contractors
and between producer & suppliers.

19. Materials Original
Rate ( in Rs.)
Supplier’s Margin
( in %)
Rate to the
Contractor ( in
Rs.)
Cement 280 per bag 10-12 310 per bag
Sand
River Sand 1700 per cum 8-10 1853 per cum
Crush Sand
2000 per cum 6-8 2140 per cum
Aggregate
10mm 650 per cum 9-10 712 per cum
20mm 600 per cum 9-10 657 per cum
Steel 52,250 per
MT
12-14 59,043 per MT

20. Materials Lead Time without
Supplier ( in days)
Lead Time with supplier
( in days)
Cement 3 6
Sand 2 5
Aggregate 3 5
Steel 3 7

21. Total Quantity of Materials
Sr.No. Grade of
Concrete
Qty. of Cement
( in Kg)
Qty. of Sand
( in Kg)
Qty. of Aggregate ( in Kg)
10mm 20mm
1 M45 42,75,000 39,33,520 39,06,000 49,68,000
2 M35 5,16,000 4,98,000 5,34,600 7,64,560
3 M30 Pier
Cap
6,16,696 9,98,893 9,81,200 13,61,800
Pier 7,56,000 12,25,827 12,04,200 16,71,300
4 M25 6,24,000 11,04,000 10,65,600 14,78,400
5 M15 52,500 1,66,250 1,47,350 2,17,350
Total 68,40,196 79,26,490 78,38,950 1,04,61,410

22. Total Estimation of Materials without Suppliers
Materials Rate Quantity Estimated cost
( in Rs.)
Cement 280 per bag 1,36,800 bags 3,83,04,000
Sand River
Sand
1700 per cum 4600 cum 78,20,000
Crush
Sand
2000 per cum 4663 cum 93,26,000
Aggregate 10mm 650 per cum 4622 cum 30,04,300
20mm 600 per cum 4921 cum 29,52,600
Steel 52,250 per MT 600.53 MT 3,13,77,692
Total 9,27,84,592

23. Total Estimation of Materials with Suppliers
Materials Rate Quantity Estimated cost
( in Rs.)
Cement 310 per bag 1,36,800 bags 4,24,08,000
Sand River
Sand
1853 per cum 4600 cum 85,23,800
Crush
Sand
2140 per cum 4663 cum 99,78,820
Aggregate 10mm 712 per cum 4622 cum 32,90,864
20mm 657 per cum 4921 cum 32,33,097
Steel 59,043 per MT 600.53 MT 3,54,57,093
Total 10,28,91,674

24. SCM
Principle
Principle’s framework Aiming
at
Applying
to
Compression · Reducing the number of
nodes, members or actors in
the chain
Or
· Reducing the physical distance
between any two nodes.
Costs Structures
Speeding up Reducing the amount of time
necessary to move between any
two nodes in a chain or network or
between any two stages in a
process.
Time Processes
Criteria for Supply Chain Management

25. Proposed Supply Chain
Material, Equip.& Labours
Project Requirements
Feedback
Client
PMC
M/s S.N. Bhobe
Associates
Designer
Mr. Kengar
Project Engg.
Mr.Shashikant
M/s J. Kumar
Infrastructure
Ltd.
Hydra, Tractor,
Dumper, JCB, Transit
Mixer, Crane
Material Producers
Cement-ACC & Birla-Karnataka & Ultra Tech- Gujrat
Sand- Bhima River
Aggregate-Dabhade Crusher
Steel- Tata , Jindal & JSW
Hydra, tractor-
Mahindra
T.M- Tata
Crane- Photon
Procurement
services, Unions-
Store room &
Labour camp
Labours
Skilled
Unskilled
Project Database
Labour Contractor
Mr. Sharma
Mr. Pathan

26. Conclusion
• From the case study it is found that ,when the
suppliers are reduced from the chain, the total
material cost decreases from Rs. 10,28,91,674 to Rs.
9,27,84,592 (decreased by 9.82 %).
• Due to the suppliers in the material chain, the lead
time of the materials increase two times (2.09) the
lead time without suppliers.
• Following are the benefits of supplier reduction
 Reduction of transportation and loading & unloading cost
 Reduction of documentation and paper work
 Reducing the physical distance between producer and store
yard
 Getting quality assurance of material and reduced lead time

27. Conclusion
• Limitations of Supplier Reduction
The supplier can provide material on credit where the
payment can be made within a permissible time and not
immediately.
In case of urgent material requirements, a supplier can make
the material easily available in least possible time.

28. Recommendation
• Evaluation of material cost should be conducted
between purchasing from supplier and purchasing
directly from the material producer.
• The evaluation shall be carried out with respect to
time, transportation cost and time, credit allowance,
payment methods etc.

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35. THANK YOU