Shortage of Materials in Construction Sites - Coursework Example

Shortage of materials in construction sites Name: Lecturer: Course: Date: Introduction Technically, a construction site is characterised by movement of materials, people and equipment, all of which are carefully scheduled to start and close on time and within the projected budget (Sambasivan and Soon 2007). However, increased shortage of labour and materials make it trickier for construction companies to meet such mandates. Such shortages also push up costs at increased pace (Walker 2015). However, shortage of materials can lead to delays on projects despite the fact that constructors and clients seek to finish the projects as fast as possible to realise fast return on interest. This paper examines the cause, impacts of shortage of materials, as well as the control measures and solutions. Causes of shortage of materials in construction sites Material shortages are caused by economic recession. In the event of an economic downturn, DHL Supply (2014) suggests that when demand decreases, construction firms tend to make low bids for projects, in order to win more business. This is specifically so when labour and materials are in abundance while the cost is low (Haseeb et al 2011). Ultimately, however, the manufacturers of construction materials lower their production capacities while the construction firms engage in downsizing of their workers. Once the economy recovers from depression, the demand for construction materials and labour also rises. However, the resources still remain scarce. In fact, such a phenomenon happened in Kuwait and Malaysia after the 2008-2010 Great Recession, where construction materials, such as cement went into low supply. Contractor-related factors, such as inadequate contractor experience also causes shortage of construction materials. According to Frimpong et al (2003), inexperienced contractors are more likely to directly cause shortage of construction materials as they cannot effectively plan or estimate the right quantity of materials. Sambasivan and Soon (2007) surveyed the significance of factors causing shortages of materials in Hong Kong’s construction industry highlighted constructor-related factors (Construction Industry Development Board 2011). Shortage of materials can also be linked to client-related factors, such as cash flow problems, instant variation in making orders and slow decision making. For instance, the clients may lack sufficient funds to afford the supply for sufficient materials for the entire project. Such cash flow problem may imply that the budget is restricted to buy few materials, which are insufficient enough to support the entire project as planned (Walker 2015). Extraneous causes, such as natural disasters and weather also cause material shortage. Sambasivan and Soon (2007) examined the delays of construction projects in Jordan and noted that the major causes of material shortage included bad weather, leading to late deliveries of the materials at the construction site. Cost overruns also cause shortage of supply of materials (Haseeb et al 2011). Sambasivan and Soon (2007) reviewed material procurement patterns in road construction projects in Nepal and noted that the shortage of materials were linked to cost overruns in construction projects, as well as governmental regulation. Impact of the problems shortage of materials in construction sites Shortage of materials causes time overruns. Frimpong et al (2003) linked contractor- and client-related causes of shortage of materials to impact time overruns. Because of shortage of materials, the construction project may not be constructed within the targeted deadline, causing time overruns. The time overrun in return leads to cost overruns (Haseeb et al 2011). Shortage of materials leads to the rise in the total cost of the project. According to Kasim et al (2005), costs of handling materials may vary between 30 and 80 percent of the total cost of construction. He further shows that nearly 60 percent of the working capital consists of the costs of materials. Hence, poor material management leading to material shortages leads to cost overruns. Shortage of materials is a contributor to disputes. Contractor-related causes of shortage of materials may result from the negligence or inexperience of the contractor. Lack of communication may also cause shortage of construction material. Some of the clients may seek to pullout from the project, as the contractor has failed to keep his end. Client-related causes may lead to delay in payments for the construction of materials supplied by the contractor’s suppliers, which may lead to conflicts between the contractor and his suppliers (Sambasivan and Soon 2007). Contractor- and client-related conflicts related to shortage in supply may lead to arbitration or litigation. To solve the dispute, an arbitration process may be required. An arbitrator is essentially a competent third party whom has the skills and capacity to settle the dispute between the two parties without the need to go to court. It may also lead to a litigation process, where the aggrieved party involves the court to resolve their dispute (Kasim et al 2006). Shortage of materials may also result in total project abandonment. When the problem of material shortage is irresolvable due to external factors, such as weather or economy, it may lead the client and contractor to abandon the project. For instance, in Malaysia, shortage of building materials during the 20019-2010 Great Recession led many projects to be temporarily abandoned (Sambasivan and Soon 2007). Control measures / solutions Effective material planning can ensure effective control of construction materials leading to avoidance of shortages. The planning involves setting up and maintaining records and identifying the right levels of inventory and frequency of delivery. Planning ensures the materials are accessed and routed in the construction site in adequate amounts to avoid waste, leading to shortages. It also ensures the right quantities of materials are budgeted for (Sambasivan and Soon 2007). Effective procurement can also be used to prevent shortage of materials. According to Frimpong et al (2003), procurement covers a variety of activities like purchasing of materials, equipment, services and labour. In controlling and managing materials, the objective of procurement entails ensuring that the materials are provided at the right time and quantity. In this respect, procurement is concerned with coordinating and purchasing, as well as scheduling delivery and making follow-ups to ensure that improper administrative processes that can lead to shortage of materials are dealt with. Effective material handling can also ensure avoidance of shortages of materials. Effective handling of materials entails the right use, storing, and control of materials in the right sequence, condition, methods, time, place, cost, and sequence (Haseeb et al 2011). Because of the frequency of material handling, the quantities of the materials made accessible for construction must be taken into perspective. For instance, storage of supplied materials would require paying close attention to prevent damage, loss, or waste of materials, which can lead to shortage of construction materials. It also prevents events where the materials run out of stock (Sambasivan and Soon 2007). Logistics can also reduce material shortages. It also encompasses implementing, planning and controlling the storage and flow of the materials to meet construction requirements. Essentially, the projects require construction materials from suppliers to the construction sites. Logistics would entail effective forecasting of material movements to avoid shortages during financial recessions and supplying the materials within the right time frame to avoid shortages (Sambasivan and Soon 2007). Stock control is also an effective control mechanism to prevent material shortage at the construction sites. Indeed, stock control covers and ensures all materials are made available whenever necessary and also includes process materials and maintenance materials. As a matter of fact, construction materials tend to generate a lot of waste, which make it a major problem in estimating the right amount of materials for a construction project. However, stock control can ensure re-use of materials both in design and construction phase (Sambasivan and Soon 2007). Survey of regional/ International status A survey of literatures shows that the problem of shortage of construction materials is indeed a global phenomenon. Still, surveys in Asia, Africa, Europe, and North America have focused on different aspects of material shortages. Most quantitative studies conducted in Asia concentrated on the causes and effects shortage of construction materials and their impacts on project delays (Haseeb et al 2011). For instance, a study conducted in Malaysia by Sambasivan and Soon (2007) established that shortage of construction materials caused project delays. Another study conducted by Assaf and Al-Hejji (2006) in Saudi Arabia and by Haseeb et al (2011) Pakistan showed that shortage of materials caused time overruns. In Africa, most studies have tended to focus on the relationship between shortage of construction materials and cost overruns. Frimpong et al (2003) established that shortage of construction materials caused delays and cost overruns in groundwater construction projects in Ghana. Similar remarks were made by CIDB (2011) in a review of causes of cost overruns in South Africa. In the case of the United States and United Kingdom, most studies have focused on the causes of shortages of construction materials and mitigating actions. In fact, based on DHL Supply’s (2014) industry survey of the UK and US, it was established that economic recession caused material shortages. An earlier study by Kasim et al (2005) conducted in UK highlighted the need for material management practices to prevent construction material shortages. Conclusion As established in the above review, the various factors of material shortages include economic recession, cost overruns, contractor-related factors such as poor decision-making, cash flow problems on the part of clients and natural disasters. The material shortages have various impacts on the construction project. Apart from causing time overruns, shortage of materials leads to the rise in the total cost of the project. It is also a contributor to disputes such as contractor- and client-related conflicts. In turn, the conflicts lead to arbitration or litigation or in extreme case, total project abandonment. Effective material planning can ensure effective control of construction materials leading to avoidance of shortages. The key strategies for use include procurement, material handling, logistics, and lastly Stock control. Reference List Assaf S & Al-Hejji, S 2006, “Causes of delay in large construction projects,” International Journal Project Management vol 24 no 4, pp.349–57 Construction Industry Development Board 2011, The Building and Construction Materials Sector, Challenges and Opportunities, CIDB, Pretoria DHL Supply 2014, Conquering the construction materials and labor shortage, viewed 16 Mar 2015, Frimpong, Y, Oluwoye, J & Crawford, L 2003, "Causes of delay and cost overruns in construction of groundwater projects in a developing countries; Ghana as a case study," International Journal of Project Management vol 21, pp321–326 Haseeb, M, Lu, X, Bibi, A, Dyian, M, Rabbani, W 2011, "Problems of Projects and Effects of Delays in the Construction Industry of Pakistan," Australian Journal of Business and Management Research vol 1 no 4, pp.41-50 Kasim, N, Anumba, C & Dainty, A 2005, "Improving Materials Management Practices On Fast-Track Construction Projects," Improving materials management practices on fast-track construction projects. 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