Materials represent one of the largest expenses in construction projects. Even in light of this, organizations often focus mainly on labor and cost reduction for improving project profitability. Material logistics in large-scale construction projects is often not approached methodically by implementing material management strategies. This presentation gives 5 points to consider, when your project wants to move towards a more methodical approach to tracking materials. The Material Handling System (MHS) from LogiNets has been developed to resolve the key issues in tracking materials at remote construction sites: https://loginets.com/en/products/material-tracking-system/

1. 5 steps to better material tracking in
large-scale construction projects

2. Efficient materials tracking
• Transparent material flows require that all elements of
construction supply chain are viewed as interlinked parts of
material flows.
• Materials in capital projects move through the phases from
procurement to site installation -and even maintenance.
• Consider how a material will be tracked from an
engineering drawing until installation, rather than only
looking at how information relating to a material will be
moved within the purchasing team.

3. Material flows in construction projects

4. Set up a clear construction
material logistics plan
A material logistics plan should cover the following points:
✓ The types and quantities of materials you will need and how they will be procured
✓ Key procurement milestones and how they will tracked
✓ Identify who are responsible for material logistics and their roles in the MLP
✓ Training and communication plan- how will all project parties be made aware of the
MLP?
✓ Where and how will construction materials be stored, once goods arrive at site?
✓ How will installation be monitored?
✓ How will inventory be monitored?
✓ How will left over materials and waste be managed, once the project is completed (and
how to avoid extra costs from excess materials?)
“A material logistics plan is used to manage material flows in construction projects”

5. Procure materials systematically
Points to consider when procuring materials:
✓ Materials need to be specified properly in purchase orders and delivery documentation.
This insures that materials can be found quickly and efficiently later in the supply chain.
✓ Compare quotations/bids from reputable firms. In addition to basic price you should
also consider freight & insurance costs, taxes and level of service provided (after-sales
service, technical capabilities).
✓ Seek order acknowledgment.
✓ Delivery period and guarantee- key shipping dates have to be established and followed
systematically.
✓ Quality requirements, hold points, inspections, and certifications must be tracked
digitally.
Consider automating integration with Project ERP and Engineering systems- this will
ensure data integrity for procurements

6. Plan for where and how construction
materials will be stored
Points to consider when storing materials:
✓ Prior to even procuring goods, consider where and how construction materials will be
stored.
✓ Consider asking suppliers to deliver products when the contractors need them rather than a
bulk shipment for all different phases of the construction (compare delivery costs!).
✓ Define clear storage locations (ie. Area codes, colors, warehouses, laydown areas).
✓ Create project procedures for unloading incoming goods (inspection and storage allocation).
✓ Create procedures for materials acceptance and release from storage.
✓ If delivery to job site is note feasible, consider arranging delivery to contactor’s warehouse.
Typically when challenges in tracking materials are discussed in relation to capital projects, the lack of
visibility into information on material deliveries and their contents is considered. Another challenge that
should be looked at is what happens to materials once they arrive at site- where will they be stored and how
can they be located for assembly?

7. Optimize inventory
Points to consider when keeping inventory or construction site materials:
✓ Make a plan for how materials taken out of storage will be accounted for (ie. pick lists).
✓ Consider setting up a common construction site warehouse where goods will be stored
until installation .
✓ Keep your materials secure. If it’s not possible to store materials in a warehouse,
considering storing materials in locked containers (in which goods were delivered).
✓ Ensure right quantities of materials are ordered. Too many materials will lead to storage
problems and increased costs, while too few materials will hold up construction work.
✓ Consider using software / systems developed for inventory management, which will
give automatic notifications of deficits of specific materials.
One of the key challenges in capital projects is that there is lack of information on
what is currently at your site and what should be at your site.

8. Use a common materials data-base
One of the root causes of the lack of information on materials in capital projects is that everyone in the
project network uses their own systems. Information on procurements, deliveries, delivery times and
warehouse deficits are managed across multiple different tools, that don’t communicate with each other.
Information is transferred via phone calls, emails and Excels between individual people in the project.
Points to consider when selecting a common materials data-base:
✓ Consider the project parties and functions you want to join on the same platform. For
example, some softwares offer all services from plant drawings to maintenance. Other
products are more specific, for example from procurement to site installations.
✓ Consider how easily the system can be deployed- what kind of user training is needed?
For example, your material suppliers will most likely not want to take part in a complete
day training session. Ensure that there aren’t too many unnecessary functionalities in
the chosen software.
✓ If your project is international, find out which languages are supported.
✓ Are software installations needed or is the service cloud-based? The larger the project
network, the more complicated it will be to get all project parties to install new
softwares.

9. Material tracking system from
LogiNets Oy
• Transparent information on
incoming material deliveries
• Connect suppliers, logistics, EPC/M
contractors and owners on the same
platform- single point of data entry
• Find the status and location of a
material with single search
• Support for all material types
including piping, bulks, structures,
tagged equipment, assemblies and
spares

10. Why use MHS?
➢ Practical and lean material handling
➢ Common data base for material deliveries
➢ Easy traceability of goods, equipments and materials
➢ Transparency of information with shipments, containers,
packages and orders