Inventory Management System in Construction Industry

Inventory problems of too great or too small quantities on hand can cause business failures. If an organization experiences stock-out of a critical inventory item, production halts could result. Inventory management indicates the broad frame work of managing inventory. The inventory management technique is more useful in determine the optimum level of inventory and finding answers to problem of safety stock and lead time. Inventory management has become highly developed to meet the rising challenges in most Corporate entities and this is in response to the fact that inventory is an asset of distinct feature. Both material purchasers and sellers can be benefited from information sharing as purchasers can get more comprehensive material information while sellers can know more on the current market situation. Construction materials typically account for 40– 45% of the cost of all construction work. In such a highly competitive environment nowadays, it is necessary for every construction company to maintain an efficient and effective material procurement to cut administration cost, and to keep abreast of the market condition to procure materials at the right price, quality and time. The main objective of this paper is to analyze the inventory management control adopted and the effective utilization of inventory at the construction site.