Managing today’s supply chains is very complex, which involves various opinions on which areas of expertise are most critical to production success. Each has excellent arguments for taking the top spot, materials management being one of them. Like oxygen to life, material flow is a driving determinant of production success. Without proper materials management, improper material flow and poor inventory management usually occur, resulting in unhappy customers and employees, delays, higher costs, or complete shutdowns.
Material and inventory problems can make or break construction projects and have ripple effects. Therefore, a proper materials management program and the technology and workflows to support it are paramount to labor and other facets of successful project execution. We’ve identified five cornerstones or pillars to material management success in the following article. Here are the 5 Cornerstones for Materials Management Success.
1. Strong Communication & Leadership
Success is driven by leadership at the top of any organization, and Construction is no different from the trickle-down effects to departments. The top executives manifest individual employee behavior. A team must trust its leader and be compelled to carry out tasks on their company’s behalf. In today’s collaborative environment, Leaders must be willing to work alongside their team.
In materials management, leadership is vital because it impacts so many stakeholders (executives, field, office, suppliers, warehouse) and requires coaching opportunities; materials are the genesis of all other areas in a plant or manufacturing facility. While every department should have strong leaders, materials management is arguably the most important due to many workflows, people, and implications disruption. In addition, organizations with strong materials leadership will be less likely to encounter material problems.
2. Proper Software & Bill of Materials, Invoices, Document Routing
Breaking away from documents and manual tracking of materials requires a new mindset and purchasing purpose-built software to ensure materials success. Many trade contractors have full-blown ERPs, but new to the market is an easy-to-use software for connecting all stakeholders. You also don’t have to break the bank in resources, time, and money to connect the entire supply chain and materials management ecosystem. Instead, you can deploy StructShare in a matter of a day or two. All materials documents are electronic and tracked in one single source of truth. The primary goal is a trusted web-based technology platform and mobile app for the entire team. Adoption will not happen if there’s a hindrance to trusting a system among anyone on the team.
Once your team is in place and adequately trusts a system, routing the documents becomes the next primary step. The BOM(s) or other documents must be appropriately routed to where everything backflushes correctly to leverage real-time just-in-time ordering or real-time inventory. Assemblies or parent parts must be entered and linked to child parts precisely or ongoing issues.
3. Inventory Management
There’s no doubt that inventory management is essential for every trade contractor. However, equally as important is employing proper processes, systems, control, and reporting. The keys to successful inventory include an excellent system catalyst, product organization from raw to finished products, a cycle counting program, and proper system part routing, and consistent production reporting.
A robust inventory management system enables your firm to accurately understand various inventory categories, stock levels, and supplier quantified. You also need trigger points for re-ordering supplies and the capability for just-in-time orders, which can save trades substantial money.
4. Production Reporting needs to be automated.
Ensure all relevant team members have sufficient training on producing reports from start to finish. Additionally, proper routing of documents related to any items is critical for accurate production reporting and inventory levels to match up. For example, welded steel assemblies can go through multiple stages before completion. First, it’ll likely start as the raw material of some sort and then become a stamped part. Then, it gets nuts or fasteners welded to it and other potential stampings or sub-assemblies before being a finished good.
If the approval routings aren’t set up correctly or your team has improper training, the inventory numbers could be skewed. Materials management software help automate workflow and tracking of all materials and activities from start to installation. In addition, everyone using them is appropriately educated on production reporting to avoid continuous physical inventory counts and make the launch more successful.
5. Material Flow & Organization
Successful material and organization require a blueprint and organization that highlights material flow from raw to finished product. Materials and components need to be connected to ensure material flow is engineered and processed for efficient delivery. The software helps manage each step of material flow and consistency so your departments can operate at higher levels of efficiency and productivity. Imagine having the ability to troubleshoot problems (lost invoives, broken delivered materials, etc.) in real-time with greater visibility across your entire organization. This is crucial for employees and suppliers in the materials ecosystem to easily understand why and how to improve work performance and make their lives easier. In addition, better material flow and organization lead to a better overall facility environment.
Materials management is undoubtedly critical for all subcontractors. However, with the rapid increases in materials costs, the importance of materials management software has been overlooked. To mitigate continued chaos, subcontractors need to emphasize outstanding leadership, who communicate effectively, institute purpose-built software for materials purchasing and management that connects with inventory management, production tracking, and elevates your material flow and organization strategy. Software doesn’t have to be complex for improving your material management strategy and organization.