Example 4-4: Examples of benefits for materials management systems.[6]
From a study of twenty heavy construction sites, the following benefits from the introduction of materials management systems were noted:
• In one project, a 6% reduction in craft labor costs occurred due to the improved availability of materials as needed on site. On other projects, an 8% savings due to reduced delay for materials was estimated.
• A comparison of two projects with and without a materials management system revealed a change in productivity from 1.92 man-hours per unit without a system to 1.14 man-hours per unit with a new system. Again, much of this difference can be attributed to the timely availability of materials.
• Warehouse costs were found to decrease 50% on one project with the introduction of improved inventory management, representing a savings of $ 92,000. Interest charges for inventory also declined, with one project reporting a cash flow savings of $ 85,000 from improved materials management.