Effective Materials Management for Specialty Trade Contractors

You are probably aware that ineffective construction materials management often results in high project costs and delays in project completion. In addition, such cost inefficiencies negatively impact the specialty trade contractors' competitiveness and stumps organizations trying to streamline work processes for their projects.

Innovative technology and a can-do mindset responds best to the company's needs. By integrating the entire purchasing and inventory workflow into one platform and providing project teams online access to material information during all project phases can help reach these company's needs.

In this article, learn how today's construction industry challenges of materials management, coupled with the business benefits of implementing an effective inventory management platform, helps specialty trade contractors (subcontractors) achieve effective materials management resulting in lowered total project costs. 

“The work that two people were doing is now combined into one, at half the time. This has truly created a lot of time for us.”

Patrick Hauser | President  Read Patrick's Success Story

1. Construction Industry Challenges 

As subcontractors embark on more extensive and complex projects, materials management becomes increasingly challenging. Managing materials is critical as any materials shortages will delay the project and put it at risk. This affects the maintenance of a consistent flow of materials for production, thus affecting the overall project. In addition, inaccurate materials information, such as incorrect bills of materials (BOM), counts, shipping or receiving errors, and so on, will also affect the overall project life cycle and increase project costs. 

Working with several stakeholders (GCs, suppliers, internal) within the materials management process impacts the overall project supply chain as there is an increased risk of data inconsistencies. (Hear how this impacted Clearview Solar in this short video.)

Subcontractors and self-performing General Contractors need to optimize materials management processes for improved productivity to remain competitive. 

StructShare recognizes key industry challenges that need to be addressed: 

• Material procurement inefficiencies 
• Increased risk and project costs due to delays caused by breakdowns in the materials management process 
• Integration difficulties of the materials management process with the overall project life cycle 
• Definition and quantification of material in the manner best suited to the individual project

“We've started now on three or four projects and those are already, from a procurement standpoint, going better than in the past, just from simply the tracking that it offers."

Cameron Hughes | Procurement Specialist  Read Cameron's Success Story

2. Business Benefits 

An effective construction materials management platform can integrate the entire material and supply chain work processes. Project teams have online access to information from start to finish during all phases. The business benefits of effective materials management include significant cost savings and increased material management efficiency. Effective materials management governs the material- and quantity-related activities by providing: 

• Efficient corporate and project specification management 
• Definition and quantification of materials
• Procurement and material tracking through delivery 
• Scheduling and forecasting 
• Supplier, Accounting, Project, Warehouse integration and transparency 
• Timely construction planning down to the work package level 

2.1 Managing Reference Data at One Place 

With an effective materials management platform, all stakeholders in the construction project supply chain can manage all reference data in one web-based location, offering several benefits, including: 

• Definition of material attributes for bulk materials or itemized equipment to be used downstream 
• Provides a common foundation for defining all bulk materials, which eliminates redundancy by creating and managing attribute-driven bulk commodities and specifications at a corporate level 
• Provides internal revision control, reducing the person-hours required to make revisions 
• Delivers substantial benefits from materials standardization 
• Major reduction on traditional paper-based reports, requests, etc.
• Reduction of mistakes and revision management 

2.2 Field and Warehouse Procurement Integration 

The field and warehouse data integration present the most current status of any materials used within the project. 

The benefits of this capability include: 

• Ability to leverage a single source of truth
• Unlimited comparisons of quantity statuses 
• Management of inventory change and keeps everyone on the same page 
• Reduces risk of over/under material ordering
• Standardized processes for creating material requisitions according to company-specific operating procedures 
• Increases efficiency in the process and provides just-in-time ordering potential 

Continuous tracking of material requirements against material acquisitions, which allows for proactive project management of potential surpluses and shortages 

2.3 Supply Chain Management 

An effective materials management platform enables users to seamlessly integrate interchanges with suppliers, manufacturers, fabricators, and freight forwarders. The ability to manage the supply chain has several benefits: 

• Complete supplier management allows access to historical information on supplier performance on previous projects 
• Performance measurement criteria help aid future materials ordered 
• Allows effective, efficient management of materials milestones, which adds value by notification of missed or delayed critical events 
• Provides timely information and flexible event tracking, increasing project efficiency and savings 
• Centralized storage of all data involved in the inquiry process: supplier information, attached digital documentation, and requisition-based data 
• Allows material buyers the option of picking and choosing items during the bid evaluation process or optimizing the selection of suppliers for requisition line items to minimize project costs 
• Knowledge of material shipments well in advance of release from the suppliers allows for better planning and allocation of resources (labor and equipment) 
• Ensuring materials are delivered at the right time to the right place to reduce delays 

2.4 Jobsite Management 

It is critical to balance jobsite staff with material availability so that materials ordered are in-line with the jobsite warehouse in the shortest possible time. Job site management is a crucial component of effective materials management with several benefits, including: 

• Total material visibility from orders to delivery to installation
• Multiple warehouse status capabilities – physical and virtual 
• Ability to track material movement between the warehouses with audit trails 
• Work package planning with priorities by sequence or date 
• Ability to forecast material availability  
• A complete history of material issues 

3. StructShare Material Management

StructShare construction materials management platform is a complete, commercially available materials management platform and mobile field application. It provides a common collaboration platform with seamless integrations to project management, warehouse, and accounting software connecting the supply chain. StructShare is becoming the standard materials management platform used by subcontractors across North America. Existing customers have reported procurement efficiency, lower risks and costs, and other business benefits since implementing StructShare. 

3.1 Material Procurement Efficiency

StructShare enables improvement in procurement efficiencies through the following: 

• A single point to input data; multiple system integrations
• Eliminating duplicate data entry for downstream groups (e.g., accounting) 
• Standardization of workflows for all projects 
• Performance improvement project over project 
• Less "panic" buying and better planning 
• With better quality and quantity of data available, decisions can be proactive 

3.2 Lower Risks, Lower Costs 

StructShare construction materials management helps to lower project costs and improve risk management through the following: 

• Improved audit performance with reduced data entry points 
• Inadequate performance impacts project schedules while the project team responds to findings 
• Having easier access to crucial audit data makes it easier to track performance and to recover from required modifications 
• Minimizes shortages and surpluses 
• Elimination of deficiencies reduces risks and construction costs
• Allows for a construction-driven schedule for early planning of engineering and procurement material activities 
• Material delivery and arrival control gives the project a complete view of movement and availability to support desired work fronts 
• Allows for total project material reporting and control without having to gather data from different disciplines 
• Construction work-front planning and forecasting 
• Rule-driven processes contractors gather construction work package requirements and assess material situations throughout the supply chain

3.3 Other Benefits 

StructShare Materials Management customers have reported other business benefits, including: 

• Standardized work processes for engineering, procurement, and construction 
• Standardization reduces costs in engineering, procurement, and construction 
• Downstream integration compresses project schedules 
• Assessment of historical project data improves the quality of new bids and shortens bid time 
• Improved organizational efficiency 
• Enhanced integration and functionality over in-house legacy systems 
• This helps to break down silos further and facilitates faster response to change 
• Ability to see material work processes at a glance 
• Seamless integration with design and engineering 
• Real-time information 
• Improved reporting 

“When looking for a tech partner I looked for someone that would adapt to my needs, not make me adapt to their product, and StructShare has been really good about that and I’ve appreciated it.”

Brian Hargrave | President  Read Brian's Success Story

4. StructShare User Experiences 

Many of StructShare's customers have reported significant time and cost savings. Using StructShare in conjunction with Procore enables project managers to access real-time materials costs. Many other clients have an easy process for uploading materials, invoices, bills of materials, and other expenses directly into their accounting pages.  

5. Proven Materials Management Solution 

StructShare helps integrate the lifecycle material and supply chain with proven technology to set up the same day of purchase. So yes, no IT resources are needed to get contractors up and running.  

StructShare is a real project workbench for all material and subcontract-related activities, spanning the entire project lifecycle. Modular, open, and fully Web-enabled, StructShare responds to construction business drivers by: 

• Lowering total project and installed costs by reducing labor hours and eliminating material surpluses and shortages 
• Increasing competitiveness through minimized project bidding time, compressed schedules, and reduced labor hours – including administration, procurement, supply chain management, and construction
•  Improving risk management through better overall project performance, project cash flow management, and proper management by exception
• Managing contracts from the planning, order, delivery, and installation phase to tracking each progress step. StructShare is for total materials management for your projects. 
• Install and set up the same day of purchase