Setting up a construction material logistics plan

A material logistics plan (MLP) is used to help with the efficient management of materials in construction projects, including cost and resource management.

Setting up a construction material logistics plan

There are several stages in setting up an MLP for your construction project - you should:

• identify who is responsible for the MLP and their roles
• set up a training and communications plan
• determine the type and quantity of each material your project will need, and establish key performance indicators for their procurement
• identify where and how you will store your construction materials
• ensure any subcontractors you use are prepared and included in the MLP
• manage the materials needed for site mobilisation and construction
• manage the resources - eg materials, equipment, plant, waste and personnel - once the project is completed to ensure excess materials are managed and extra costs avoided
• review your MLP and improve future plans

In order to get the most out of your MLP, you should aim to be as detailed as possible and try to include the whole supply chain involved in the project. This will allow you to better predict the cost of your project and manage any waste and excess costs.

By using resources efficiently, good logistics planning will reduce waste, carbon emissions and costs on your construction projects. It makes good commercial and environmental sense to use a material logistics plan (MLP).

Construction material logistics plan legislation and policy

There is no legal obligation on construction businesses to use an MLP. However, using an MLP can help you to comply with other legal requirements.

Keeping the amount of materials you waste to a minimum will reduce the amount of effort you have to spend complying with waste controls such as the duty of care and hazardous waste regulations.

Construction material logistics plan financial benefits

If you order materials that you do not use on the project - for example if they are lost, wasted or are surplus to requirements - your project costs will be higher than they need to be. For example, you may be paying for unnecessary materials, storage, disposal and labour. This is often accepted in construction projects as a cost that is built into the project price and paid for by the client. An MLP will help you to reduce these costs and improve profits.

You can also increase your success in bids by demonstrating how you can effectively manage your logistics to reduce your own prices to potential clients.

Construction material logistics plan labour efficiency

If you use an MLP to improve the efficiency of your logistics operations, you can also reduce how much labour you need. For example, excess materials will need to be stored and handled by workers who could be better employed elsewhere on site. By having only the correct materials required for a task on hand, at the right time and in the right quantities, the performance of your craftsmen will improve.

Construction material logistics plan environmental benefits

Homeowners and businesses increasingly want to reduce their impact on the environment. By improving the environmental performance of your projects, you can also help your clients and contractors demonstrate their own commitment to reducing their impact on the environment.

Using an MLP in your construction project can help you to reduce:

• the amount of waste that you send to landfill or for treatment
• the amount of raw materials you require and therefore how much you will need to manage, reuse and recycle
• your carbon emissions - particularly those associated with extracting, processing, manufacturing and transporting material

Using an MLP also enables you to set a benchmark for similar projects - see how to identify materials for your construction project.

The first stage of setting up a material logistics plan (MLP) is to establish who is responsible for what role within the plan. You will need to identify who is responsible for producing the MLP and ensuring that it is implemented at each stage of your construction project. This could be:

• the client
• the main contractor
• subcontractors

It is the client's responsibility to set the structure and requirements of the MLP - for example, the overall project costs and environmental credentials.

If you are the main contractor, your role is to deliver your client's requirements through the MLP and manage materials through the supply chain. This will include estimating material quantities and making sure these are met, and ensuring that all subcontractors do the same.

You should also appoint a logistics manager for the project. For larger projects, this could be a dedicated, full-time role, but for smaller projects, you could combine this role with other project management responsibilities.

The logistics manager should be appointed as early as possible in the project so that logistical details can be considered at the design stage when it is still possible to make changes to accommodate good practice.

The main contractor is also responsible for working with the design team to identify potential material savings from the design.

Subcontractors may be responsible for ordering and managing most of the materials for the project. Therefore, you should engage any subcontractors on your project from an early stage to identify and minimise any material wastage.

Subcontractors will be important for implementing any on-site logistics practices - this may require training. Subcontractors are also responsible for providing accurate material data, such as quantities and delivery details, and how they fit into project timescales.

Once you have established each person's role and responsibility in developing the MLP, it is vital to communicate these to all parties involved, especially the subcontractors. You should hold regular meetings with staff and contractors in order to reiterate the importance of the MLP and their roles within it.

Construction material logistics plan training and communications

Once you have established the roles within the MLP, you will need to consider a training and communications plan. This is the second stage of setting up an MLP and should take into account the level of training required by everyone who has responsibility for developing or implementing the MLP.

The training should include making sure that everyone is aware of any site-specific issues and logistic strategies - eg the use of a construction consolidation centre or on-site market place. You can also deliver bespoke training courses or have courses incorporated into your existing training sessions - such as an induction.

Once you have established the roles and responsibilities within your construction material logistics plan (MLP), and sorted out any relevant training, you will need to identify the project's material requirements. This includes the types and quantities of materials to be used throughout the project, how and when they will be delivered to the site, and any constraints. You should also set key performance indicators (KPIs) for purchasing all key materials.

Identify construction materials

As a main contractor or subcontractor, you will need to prepare a bill of quantities as part of your MLP. This will require input from manufacturers, suppliers and distributors of all the materials you need for your project. You should also set guidelines on how much material you will need and how and when it will be purchased throughout the project.

If you are a subcontractor, you will need to allow for wastage - this may be unavoidable where designs require materials to be cut. However, if the MLP includes good on-site material management systems - such as 'just-in-time' deliveries - and if you have provided for adequate storage areas to reduce any damage to materials, you should be able reduce this contingency allowance. This can save money and reduce your waste.

With each order, you should ensure that only materials that are planned for immediate use are ordered. You should then give this information to the logistics manager to ensure that only those materials intended for a particular area at a particular time are allowed onto the site.

Construction material logistics plan KPIs

In order to measure the activities on your project, and identify areas for improvement, it is important to set KPIs. This can help in the overall management of a construction project, especially in project timing and in the consistency of a plan for workers. You should also set and monitor specific and relevant KPIs for both the main contractor and subcontractors. This will allow you to analyse their current performance and show where improvements need to be made.

For every project that you run, you will have different KPIs. However, understanding the flow and quantities of materials in detail will ensure that measurement and the benefits can be quantified. It is important that for each project you have some initial data based on past performance, in order to develop meaningful KPIs that ensure continuous improvement.

The main contractor or subcontractors should ensure that the project KPIs are implemented and monitored regularly during project reviews. At each project review, you should produce reports on achievement against KPIs, as this will enable you to identify opportunities for improvement or areas of concern.

Once you have established what materials you need for your project, you will need to work out how those materials will be received and stored on your site as part of your construction material logistics plan.

Areas for storage should be chosen during the initial design stages of a project and you should ensure that they are clearly defined at the start of the project. This will prevent the areas from becoming overfilled and ensure that they remain suitable for the materials - for example a dry area for plasterboard. You should also provide good site security - such as perimeter fencing - and security staff to minimise the risk of losing materials to theft or vandalism.

Once you know the type and quantities of the materials you are going to use on your project, and when they will be required during the project, you can devise a receipt and storage process. This will allow you to plan for what plant and equipment you will need for unloading and handling those materials.

In order to ensure you make the most of your materials, you should store similar items together. You should also have a dedicated labour team available to unload and distribute materials to their point of use, as this will help prevent double handling and decrease the costs of hiring specialist staff. Once materials have been delivered to the point of use, the contractors should confirm that they have received the materials, either manually or through an electronic system - such as tagging.

There are some requirements that may restrict or limit the receipt or storage of materials, such as planning conditions. You should ensure that you have all the necessary planning permissions in place during the design stage.

If you are using a material logistics plan (MLP) for your construction project, you should make sure that you involve your subcontractors. You will need to ensure they are effectively prepared, managed and monitored so they are aware of their responsibilities under the MLP and are able to supply the required information and meet the requirements of the plan.

Each subcontractor should conform to standards agreed with the main contractor. These standards should be itemised and included as key performance indicators where possible. It is also recommended that they are included within any formal agreement between the main contractor and subcontractors.

All subcontractors also need to supply data on material quantities and provide evidence of their purchase, use and disposal route under the MLP. This information should include:

• quantity of each material type and when and where it will be delivered
• how much of each material is factored in for contingency - eg design waste and construction process waste
• copies of purchase orders
• material delivery times, access, delivery points and documentation
• material load units - crates, pallets, etc - and any specific handling equipment requirements
• details on material packaging and if it is returnable
• material labelling procedures and use of any tag type systems
• material storage and security procedures
• material collection and returns procedures - including waste transfer notes and hazardous waste consignment notes if handled by subcontractors

Your construction material logistics plan (MLP) could be affected by changes to the construction site during a project. It is important that you identify these changes and review your MLP to take them into account.

During the site mobilisation stage, all the processes defined in the MLP will be implemented. The success of the MLP will depend largely on how the site mobilisation was implemented and communicated to everyone involved.

You should conduct regular project reviews to ensure that everyone is sticking to agreed procedures that are going to be assessed. This will help identify opportunities for improvement.

It is also important to ensure that you have the appropriate plant and equipment available to handle your materials and to minimise the damage to them. You should monitor all equipment that is used to handle materials, as this will give you an indication of rates of use. For example, use of hoists and cranes should be planned to ensure that such equipment is kept well used, but not used more than is necessary. If your suppliers need to use such assets, they should be asked to pre-book their use.

Once the project has ended, you will need to oversee the demobilisation of the site. This is important so that materials, equipment, staff and waste are removed from the site in a safe and managed way.

You could charge some suppliers for the use of the assets, as this will demonstrate its value to the project. If you have an efficient demobilisation strategy, it will help you to effectively remove excess materials, wastes, plant, equipment, labour and facilities.

To ensure that you have a controlled approach you should identify, within your demobilisation strategy, how material use at the end of the project will be managed to prevent excess material being delivered that may result in waste. Your demobilisation strategy should also include how you will use excess materials and if they can be used at another project.

The final stage of the material logistics plan (MLP) process is to review your plan and learn lessons for future construction projects.

You should review the MLP at key stages in the project. You should also ensure that periodic reviews of the key performance indicators (KPIs) are completed, so that you can identify areas for improvement at an early stage. At the end of the construction project, the MLP and periodic reviews will be able to provide an accurate record of how effectively materials were managed on the site and how well the project performed against the KPIs.

Your review should answer the following questions:

• Were KPI targets exceeded and if not why not?
• Is there an opportunity to improve performance of the KPIs for future projects?
• Did setting KPIs or objectives have any negative impacts on the project? If so, how could these be minimised while still retaining the principles behind the KPIs or objectives?
• What could you change to make the MLP easier to use or more effective for future projects?
• Did all subcontractors participate in the MLP?
• How could the participation of subcontractors be increased in future projects?
• What additional information was required for the MLP and should this have been requested earlier?
• Could the project have further reduced the total amount of materials that resulted in waste and how could this be achieved on future projects?

The review will be able to provide value in the design and delivery of future construction projects. If possible, a summary or findings report should be written and distributed to everyone that contributed to the project. This summary report should identify a list of recommendations and identify the benefits of the MLP, how it impacted on the cost of the project and how it benefits the environment.

In some cases, logistic services from specialists employed internally or hired externally may be valuable to your construction project. Types of logistics services include:

• an on-site logistics specialist who can receive all material deliveries and distribute materials, equipment and plant
• full supply chain logistics planning - the main contractor employs professionally trained logisticians who can plan procurement, storage, distribution and back loading activities
• fourth-party logistics - an overarching service to co-ordinate other logistics providers where there is more than one supply chain

Logistics techniques that you could implement on your construction site as part of your material logistics plan (MLP) include:

• Just-in-time (JIT) delivery - brings material onto site just in time to be used, reducing the need to store excessive levels of material. JIT can be used with a construction consolidation centre (CCC) or individual suppliers.
• Demand smoothing - enables peaks and troughs in demand of materials to be evened out by looking at project activities in the entire value chain. It identifies how the activities can be smoothed to reduce the amount of transport resources, materials and labour needed.
• On-site marketplace - a temporary storage area for consumable materials, fixings and small tools that are widely used and shared between a number of trade contractors working on site.
• Reusable packaging - reusable containers can cost substantially less than expendable corrugated fibreboard boxes and are likely to have less environmental impact. Reusable packaging includes boxes and pallets, which can be hired and then returned during or at the end of the project.
• Pre-assembled and offsite fabrication - involves planning ahead during the design stages and putting together the actual quantities and measurements that you may need, eg getting pre-cut plasterboard or components prepared in packages appropriate to a room or floor. Offsite fabricated materials ensure wastage is more efficiently controlled and usually reduces transport requirements.
• ICT systems - used to tag and track materials through the whole construction project. They can provide insight about what actually happens on site.
• Inventory management optimisation - a software system providing planning tools that help optimise inventory levels and site space and storage. The software is designed to distribute materials to the right place at the right time, with supply measured against actual and forecast demand for each individual supply centre.
• CCCs - distribution centres used to supply materials in the required quantities to one or more construction projects. The CCC distributes materials using JIT to meet the daily needs of the sites, combining goods into single shipments.
• Reverse logistics - a process that involves the cost-effective movement of products (whether raw materials or finished goods) from the consumer or end user back up the supply chain - for example, allowing customers to return packing material to the seller to reuse, or allowing over-orders of material to be returned by distribution centres to suppliers. This allows businesses to reuse, remanufacture or refurbish materials and products.