Global Procurement and Materials Management
Most construction-related organizations have a structured procurement, or materials management department. (RS257-1, p. 5) CII surveys indicate a growing trend in the use of materials management systems by owners and contractors.
The majority of organizations reported regularly outsourcing Transportation and Logistics, Supplier Quality Management, Purchasing, Expediting, and Site Material Management. A properly developed and executed transportation and logistics plan will substantially increase the likelihood of timely delivery of the materials a project construction team needs.
Post-9/11 requirements have forced organizations to increase their resources for managing import/export compliance. A majority of respondents have a dedicated trade manager and maintain up-to-date procedures for import/export compliance. Owners feel that they have a mature import/export compliance system in place, while contractors do not.
The most significant changes in materials management in the previous 10 years are: improved technology, globalization, emergence of mega-projects, increased material costs and lead times, scarcity of materials and job space, and an increase in focus on quality and financial standards.
The growing size and complexity of projects appear to affect owners and contractors significantly. Workforce training, experienced personnel recruitment, and extensive risk assessment are measures organizations have adopted to address this issue.
Half of the respondents include the materials management IT system in their corporate strategy. However, the lack of interoperability of different systems and lack of access for external parties appear to be roadblocks to efficient IT implementation. It was indicated that additional training would increase the benefits from IT improvements.
Materials management will maintain and expand its role in the early phases of capital project planning. This increased early involvement is particularly important under any market condition, whether in periods of supply scarcity and global demand surge or in economic downturns.
About half of the survey respondents are seriously concerned with strategic supplier relationships, agreements through which strategic partners engage in long-term commitments and may share confidential information.
Table 101 (RS257-1, p. 71)
