Assessment of Inventory Management Practice On Building Construction Projects: A Case of Jimma Town

Abstract

Inventories are any stored resource that are used by the contractor or organization which keeps in hand for efficient construction works and successful completion of construction project. The company manages this substantial portion of asset of the company in different way of managing system indeed they should be seen as a potential factor in optimization of resource used and in cost reduction. In construction project operation, often there is a project cost variance in terms of the material, equipment, overhead cost, and general condition. This is due to consist impact in construction project which caused to the occurrence of many problems such as cost overrun, delay, and material wastage, dispute between stockholders, storing and handling material. Inventory management aims to optimize the investment by maintaining adequate and satisfactory levels of materials capable of meeting the needs of once construction projects. This research paper is sought to assess inventory management practice, problems associated with inventory management and measures for managing inventory in building construction project. The study was analyzed using descriptive survey design approach. And data was collected by questionnaires, interview and site observation. Quantitative data was analyzed and ranked by relative important index while the qualitative data was analyzed by content analysis method. The study shows that awareness regarding to material management practice were relatively high on Purchasing of materials, Material planning and Proper Transportation. The study also identified major problems such as late delivery of ordered materials, Rejection of materials due to non-compliance to the specification and damage to materials during transportation to the site. Always Better Control (ABC) and Periodic inventory review were identified as the major inventory management practice on the study, which are effectively used by the construction company. Generally, the study concludes that, the major activities on inventory management, asses the level of awareness regarding to material management practice, Problems related with inventory management and measures for effective inventory management system were analyzed. Finally, the study recommends that the construction companies should use effective inventory management system to increase their profit and save their time by avoiding project delay and cost variance