Project Material Management: The Lifecycle of Project Materials

Throughout a project's lifecycle, a construction company manages inventory, tracks the usage of materials, and ensures that materials and services are utilized efficiently. As the construction project evolves, this involves regular communication with vendors and subcontractors, continuous monitoring of supply levels, and adjustments to procurement strategies. You need proper documentation and financial tracking to maintain transparency and control over project costs, ensuring that expenditures are aligned with the approved budget.

The process of managing the materials and services required for construction projects typically consists of the following general stages:

  1. Take-off stage: This stage includes confirmation of the project scope with the customer, identification of the specific materials and services required based on detailed project plans and specifications, and general measurement of required materials and services.
  2. Budget preparation: Based on the results of the take-off stage, the project manager estimates the overall amount of required materials and services and prepares the project budget. In the cost budget of the project, the original budgeted values are specified.
  3. Purchase planning: The project manager decides how the materials and services will be purchased based on the project schedule, required resources, and availability of particular items on the vendor side.
  4. Buyout: Once the requirements are clearly defined, the project manager initiates a search of vendors and subcontractors—also known as the buyout process—evaluating potential suppliers based on key factors that should be aligned with the project’s timeframes. These factors include item quality, estimated delivery times, and the price of materials or services.
  5. Commitment: After selecting the vendors, the purchasing manager creates purchase orders and subcontracts, specifying the quantities, delivery schedules, and other important details aligned with the project goals. As a result, in the cost budget of the project, the committed values are specified.
    Important: For accurate tracking of project costs, we recommend that you use the commitment tracking functionality. For more information, see Committed Costs: General Information.

For details about: