Material Management and Human Resource Management _ Unit 5 _ Construction Management _ Final Year (BE) _ Department of Civil Engineering _ TAE _ SPPU _ by Shrikant R. Kate

SPPU
BE CIVIL ENGINEERNG
Construction Management
© Mr. Shrikant R. Kate 1
Unit-5A
Material Management
Shrikant R. Kate
BE Civil, M Tech Construction Management

Syllabus
 Materials management Materials flow system, role of materials
management in construction management and its linkage with
other functional areas vendor networking, buyer-seller
relationships
 EOQ model and its variations, material codification and
classification
 concept of logistics and supply chain management, role of ERP
in materials management – material resource information
systems Human resource management.
 Human Resource in Construction Sector, Staffing policy and
patterns, Human Resource Management Process
 "Human Resource Development Process, Performance
Appraisal and Job Evaluation, Training and Career planning"
 Role of ERP in Human Resource Management – Human
Resource Information System (HRIS)

Introduction
Material Management Overview :
 Material is main source of any construction activity.
 Cost of material is 60 % of total cost of construction
 It include – material flow system , relation between
material manager with material supplier, different
tech. of material to be order, storage & supply of
material.
 “This is scientific tech by which flow of material is
ensure from the starting to end of construction
project with help of planning, organizing and control
of material flow.

Material Flow System
Function in Material Management :
1. Material Planning
2. Material Purchasing
3. Inventory Control
4. Material Storing
5. Material Transporting
6. Disposal of scrap material
7. Material Handling
8. Waste Material Management

1. Material Planning: Material availability on
construction site.
2. Material Purchasing : supply-buyer relationship ,
availability of material at right time, purchase at
right time at right place.
3. Inventory Control : Avoid halting of work,
optimum supply of material with no less or excess
supply of material, avoid unnecessary storing cost
and penalties due to delay
4. Material Storing : To maintain quality of
purchase material ,store it in proper condt. , proper
storage material to avoid damage to it.

5. Material Transporting : Use managerial tech to
reduce transporting cost of material.
6. Disposal of scrap material : Reuse- remaining
sand, aggregate, steel
Proper disposal – paints, damaged formwork.
7. Material Handling : Transportation of material
within site with proper care.
8. Waste Material Management : Proper planning
of reusable and waste material

Role Material Management in CM
Ensure the availability of material and services
required for construction
Profit making capability by effective planning
of raw material
Rate of return to firm by proper material
management
 Rate of return = profit / capital invested

Functional Area of Material
Management
Eight main function flow management
Co-ordinate with different technical level
activity
eg. Inventory control , material management
by EQO & by ABC analysis for order optimum
level of material
Hence material manager have to understand
1st technical aspect of activity where material
is required.

Vendor Network/ Buyer-Seller
Relationship
For Better supply of material on site by supplier :
1. Better relationship of manager/firm with
supplier/network
2. Image of any construction firm
3. Previous clearance of bill
4. Deal at 11th hour of construction
5. Timely order and timely supply of material

Economical Order Quantity
EOQ is the order quantity that minimizes the
total holding costs and ordering costs.
It determines the most efficient amount of
goods that should be purchased based on
ordering and carrying costs.
It represent the optimum quantity of
inventory a company should order each time
in order to minimize the costs associated with
ordering and holding inventory.

Inventory Procurement cost : ( Ordering cost)
1. Cost requires to order/purchase material from
supplier.
2. Include cost of billing, taxes on material
Inventory Stocking cost :
1. This is the cost requires to store the material
on construction site.
2. Include rent of place of store , other facilities

1. In order to make availability of material manager
has to place order of material before work.
2. Material manager should not place the ordering
quantity too high to cause a problem of stocking
of material on site and increment in inventory
stocking cost.
3. Also manager should not place very small order
to increase procurement cost.
4. To avoid this material manager order quantity by
which total cost remain less.

Order at point Q is called EOQ.

Development Economical Order
Quantity
Assumption :
1. Lead time is zero.
2. Ordering size is fixed and price per unit not
changing with size of order.
3. No storage from supplier side is allowed.
4. The demand of material is known and
uniform.
5. The material is non degradable.

Formula for EOQ
Annual consumption of material purchased : s
Per unit price of material : Cu
Procuring cost per unit : Cp
Inventory carrying cost rate : I
Ordering quantity (unit) : q
Economic order quantity : qo

A) Annual procurement cost material :
= no. of order placed in year X procurement cost
= (annual consumption / order quantity) X procurement cost
= (s/q) x Cp
B) Annual material carrying cost :
= (avg. material investment) X (Inventory carrying cost )
= ½ ( ordering quantity x price per unit ) x ( rate of inventory
carrying cost)
= ½ ( q x Cu) x i
C) Annual cost = A + B
= ( q x Cu x i ) /2 + ( s/q x Cp)
D) EQO =
q = √ (2.S.Cp) / Cu.i

Material codification and Classification
Codification of material is nothing but
systematic representation of material in
abbreviated form using alphabets, number ,
colors and symbol.
Three stages :
Identification , Classification, Codification.
Identification include correct nomenclature
items in which most of the description of item
includes.

Stages in Material codification
1. Material Identification :
2. Material Classification:
A. Non-Combustible Material
B. Combustible Material
3. Material Codification :
A. Alphabetical System
B. Numerical System
C. Alpha-Numerical System

Material Identification
Identification include correct nomenclature
items in which most of the description of item
includes.
Identification mean to recognize the similar
material or to recognize same characteristics
material. This initial stage in sorting of
material.

Material Classification
This classification of material is based on any
particular parameter.
Example :
a. Demand from construction site
b. Origin of material supply
c. Composite material (combustible or non-
combustible material)
d. % of total costing

Material Codification
A. Alphabetical System :
As a code alphabets are given to different group of
item.
B. Numerical System :
Use of Number.
Sequential system ,Block approach, decimal code
C. Alpha-Numerical System :
Combination of alphabet and number.
Eg. Fe415- St1

Benefits Material Codification
1. Accurate and logical identification
2. Avoid long and complete description
3. Prevent duplication of material
4. Efficient Purchasing
5. Make easy for recording of data
6. Efficient inspection

Logistic and supply chain Management
Logistic mean supply of material , services ,
information etc.
Defined as “ To achieve high degree customer
satisfaction with high reliability, high degree of
completeness in short delivery time, a
management of material and its information is
necessary.”
Also known as – total physical distribution,
complete flow management , supply chain
management, integrated logistic management.

Objectives Logistic Management
1. To provide raw material whenever requires in
short time with customer satisfaction
2. To get material in right cost and in right
condt.
3. Squeeze supply chain as much as possible to
minimize cost level
4. Improve communication and co-ordination
between supplier and buyer
5. Improve cooperation and co-ordination
among different department
6. Improve company reputation in market

Activity in Logistic Management
1. Order Processing
2. Transportation management
3. Inventory management
4. Material management
5. Information management
6. Warehousing
7. Selling

Role of ERP in Material management
ERP- Enterprise resource planning
System is useful for collect, store, manage and
interpret the information.
Data is maintained by database software and
useful for taking decision or take any action of
managing material.
For controlling huge data , use of computer
based software are very useful.

ERP system
1. Keep Information of material required for
construction
2. Complete database by inputting all material
information
3. Connect this database to all departments in
firm and supplier for raw material
4. Find out material required by all department
5. Demand seen and sanctioned by material
manager
6. Supplier gives cost by which material
manager decides.

Benefits ERP
1. Flexible to applicable to any construction firm
2. Automatic balancing demand and supply
which avoid any delay
3. Tracking of order is very effective
4. Procuring material with minimum cost in
desired quality is possible
5. Scheduling of material management with
proper planning is possible.

Unit-5B
Human Resource Management

Introduction
Indian developing country- construction sector
is still expanding
Large requirement of labour, but around 85 %
of them are unskilled, which leads to faulty
practices on construction site.
For this reason, a strong sound management of
manpower is required which gives the concept
of Human Resource Management.

In this management the human resource is
manage not only for betterment of the
company but also betterment of personals
includes in the human resource management.
HRM defined as ,
“ Matching the organizational needs for human
resource and satisfy individual by promoting
for self development.”

Human Resource Should Consider :
1. Human Resource Planning
2. Human Resource procurement
3. Human Resource Training
4. Human Resource Appraisal
5. Human Resource Data Storage
6. Output of Human Resource
It suggest that every individual in firm is important
for the growth of firm and cumulative growth
lead to integrated system of development.

HRM in construction sector
HRM major role is to convert most of the unskilled workforce to
skilled workforce.
For this a detailed management is required which is labeled as
HRM.
Role of HR department are as follows :
1. Recruitment
2. Training
3. Provision of different amenities to human resource
4. Safety of Human Resource on construction site
5. Improve technical competency of human resource
6. Improvement of behavior of human resource

HRM in construction sector
In Indian construction sector, employer
(owner) many times thinks that they are doing
favour on employees by giving them work and
employees think they have nothing to do with
betterment of firm except their salaries.
This approach many time lead to conflict
resulting in less profit in work.
HRM itself try to creates some assured
environment for both employee and employer
by which progress of firm happens.

Staffing Policy and Pattern
It is duty of HRM department to provide human resource
whenever required as per quantity and quality as well.
Important steps for staffing :
1. Planning of human resource
2. Recruitment of human resource
3. Selection of human resource
4. Induction and orientation
5. Training & Development
6. Performance Appraisal
7. Transfer
8. Separation

Staff
To staff mean to have human resource for
particular task.
It is always good to have competent human
resource to fulfill all requirement of work.
HRm do follows all the functions of staffing to
have competent human resource.
Following planning is required.

Strategic Plan Operational plan
Need of Manpower
Planning of HR
Recruitment , Selection, Orientation
Training & Development
Incentives , promotion etc.
Performance Appraisal
Leading to future
Separation

Process
All process of HRM is designed and developed by
HR manager.
He is senior executive and has capability of:
1. Finding right kind of people for right kind of job
but support employee in the organization to
help themselves to build, develop their career &
2. By developing employee try to accomplish their
best efforts in accomplishing final goal of the
firm.

Process

Human Resource Development (HRD)
HRD is center point for HRM.
It is responsible for development from top officials in
company to bottom worker.
It include :
1.Development of top executive official
2.Development of executive counselors
3.Development of technocrats
4.Leadership Development
5.Skilled labour Development
6.Development in process that are followed in
construction.

Human Resource Development (HRD)
HRD is define as “ To maintain as asset of human resource
by which a construction firm easily tackle any
construction activities by developing human resource
for development of both human resource as well as
construction firm.”
To achieve development training for each category is
must:
1.Perform workshop for different tech
2. Perform daily training
3. Motivate employee for higher studies
4. Perform seminar by successful enterpriser
5. Improve organization setup

Performance Appraisal & Job Evaluation
Performance Appraisal :
“ To calculate worth of employee and thus worth of
construction firm the process is followed for
obtaining , storing, analyzing & recording which is
called as performance appraisal.”
So by doing this one can actually follows the process of
evaluating the workers performance towards the
objective or goal of the company.

Performance Appraisal & Job Evaluation
Following point are cross check with employee:
1. Labour/top official contribution in work
2. Getting understood the specific characteristics of own
job so that he/she give max output
3. Improve quality
4. Locate inform. Regarding diff problem in performance
5. To know worth of executive & position in company
6. Useful Inform. To promotes or not promotes
7. Appro. Inform to official to recognized their
subordinates.

Method of Performance Appraisal
a. Formal Method : Participative review, rating by
numerical value, measure performance done by
superior evaluate his subordinates.
b. Informal Method : Rating based on- Behavior of
employees, his loyalty, honesty etc.
c. Ranking Method : If size of organization is vast.
Each person in organization is comparing with other
person . Formulae is used for calculation.

Training & career planning
Company approach should be “ Firstly developed employee with
provision of training to employee to support his/her career
and then developed company worth by using skill from
employee.
Objective of training :
1.Improve technical competency in employees
2. Improve behavioral among employees
3. Improve satisfaction of job and moral
4. Increase overall efficiency
5. Increase capacity of organization
6. Encouraging employee for higher qualification
7. Optimize the money spending of faculty training
8. Empower employee for effective functioning

Stages of Career
During once professional time period it is sequence of
position that he/she occupied.
1. Exploration : Stage of finding right position as per
qualification to have good career
2. Establishment : Try to get that position & try to
retain it for good experience
3. Mid career : Try to minimize mistake & improve
efficiency , increment with age
4. Late career : eg Consultancy

Role of ERP in Human Resource Information
Enterprise resource planning – Too many employee &
keeping record of :
1. Information of auditing & forecasting of HR
2. Inform of Human resource planning
3. Inform regarding HRD like training, appraisal infom
4. Inform regarding recruiting, selecting, evaluating
5. Inform regarding promotions, incentives
6. Inform comparison of 2 or more human resource
7. Inform of updating human resource with recent
technology.

Material Management and Human Resource Management _ Unit 5 _ Construction Management _ Final Year (BE) _ Department of Civil Engineering _ TAE _ SPPU _ by Shrikant R. Kate

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