International Journal of Management Sciences and Business Research, 2013, Vol. 2, Issue 3.

(ISSN: 2226-8235)

EVALUATION OF MATERIALS MANAGEMENT STRATEGIES IN THE NIGERIAN

CONSTRUCTION INDUSTRY-
(A CASE STUDY OF SELECTED BUILDING SITES IN LAGOS STATE.)

Author Details:
DR. KEVIN AKU OKOROCHA, Ph.D, RSV
SENIOR LECTURER
DEPARTMENT OF PROJECT MANAGEMENT TECHNOLOGY,
FEDERAL UNIVERSITY OF TECHNOLOGY, OWERRI. NIGERIA

Abstract:This study on the Evaluation of Materials Management Strategies in the Nigerian Construction
Industry. Questionnaires were used to collect data from the construction participants. Main factors of materials
management were summarized into five basic independent variables (X) namely; materials planning (x 1),
material procurement (x2), material handling (x3), material storage (x4) and material usage (x5). Six rating basic
questions were asked and the numerical summation of the ratings formed the observed value for the independent
variables in the case of that respondent. The same was applied in the assessment of state of material
management as applicable to construction industry in Nigeria (Y) which formed the dependent variable.
Multiple regression analysis was carried out on the data using E-view package and SPSS package and the
following relationship was established between the dependent and independent variables.
Y = 1.084452539 + 0.5702062292x 1 – 0.114384169x2 + 0.3604260282x3 + 0.1852074864x4 –
0.266328778x5. Testing the hypothesis using absolute value of T-statistics and probability values show that
among the factors studied, only two of them planning(x 1) and handling (x3) were statistically established as
being critical to materials management in construction projects delivery in Nigeria.
Material planning and issuing system at sites should be automated in order to minimize human errors. Storage
of materials should only be maintained at minimal level in construction sites.
Key words: Evaluation, Materials, Management, Strategies, Construction, Industry.

1.0 INTRODUCTION construction sector. Despite this noted

While the world is still struggling to emerge from contributions, there are numerous failed and
the global economic collapse, Nigeria’s abandoned construction projects scattering every
construction industry is growing fast and is likely corner of the country. The socio-cultural, economic
to grow astronomically over the next decade, and political environment in which the industry
according to forecast made in a June 2010 report by operates has directly or indirectly affected its
global construction perspectives and oxford growth.
economists. According to Sloan (1990) of a total utility of
Indeed, the report found that Nigeria’s population 100% associated with a construction project, the
of approximately 154 million is urbanizing at one client places the following importance upon the
of the fastest rates in the world, but construction three critical functional aspects;
industry contributes only 3.2 percent of gross (i) Quality - 45%
domestic product. From 2009 to 2020, only Nigeria (ii) Cost - 35%
and India will enjoy growth rates than China in (iii) Time - 20%
their construction output (the business, trade and On the other hand Onyeador (1997) posits that the
investment guide, 2010/2011). success or failure of construction project
This out look is excellent news for the country as a management could be measured in terms of cost of
whole, every ambition that Nigerian government completion versus budget, time taken to complete
has-such as creating much needed housing, the project versus planned duration and the extent
improving public service developing its tourism to which the completed project conforms with the
sector, improving transport links, creating new jobs design specifications (Quality).
and eradicating poverty-can be linked to the

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However, Onyeador (1992) suggested that materials resources budget is to start with an
construction project undertakings are difficult to estimate of the physical materials resources budget
manage. This according to him may be due to the cost and converts it into a budget that becomes our
complex nature of activities involved. baseline for buying them.
However, what may be the single most crucial
factor to client is quality (PMBOK 2001). In this MATERIALS MANAGEMENT DEFINED
era of economic depression and rapid rise in Oyeoku (2001) quoted Frearou (1971) that
materials cost, concerns for optimum utilization of materials management is an integrated
available resources tend to dominate all decisions organizational arrangement establishing a single
relating to construction project undertakings. It is manager with authority and responsibility for
only with highly skilled project management team policies and actions related to determining the
that uncertainties in the planning and execution amount of materials requirements, acquiring
process can be kept to a minimum in order to attain needed materials, receiving, storing and issuing
significantly the quality objectives of the materials, making inventory records, scheduling
construction project within optimal time and cost. materials into use and disposing of materials which
Mezue (1992) placed materials cost input at an are excess to the organization.
average of 65% of the total construction project Dobler and Burt (1996) stated that materials
delivery sum. management is a confederacy of traditional
Consequently, construction materials, have become materials activities bound by common ideas, the
one of the important elements of cost management idea of an integrated management approach to
in the construction industry today. There is planning, acquisition, conversion flow and
therefore particular need for study in the area of distribution of material. They asserted that such
materials management to ensure cost effectiveness concept advocates the assignment of all major
in construction project management. Thomas and activities, which contribute to materials cost to a
Kramer (1987). single materials management department. Included
Equally, the planning and management of in their major materials activities are the primary
construction materials usage are often based on the responsibilities which are generally found in the
contractors experience and intuition than on purchasing department plus all other major
rational analysis of the works to be performed procurement responsibilities like inventory
based on application of known specific tools and management transportation, handling, warehouse,
techniques. The failure of any construction project surplus and salvage and frequency construction
through poor materials management carries much planning and control.
repercussions. This work therefore attempts to The International Federation of Purchasing and
evaluate the materials management strategies in the Material Management (IFPMM) defined materials
Nigerian construction industry as a way of management as a total concept involving an
improving the state of project management organizational structure unifying into a single
practices. responsibility, the systematic flow and control of
materials form identification of the need through
2.0 LITERATURE REVIEW consumer delivery. Included within this concept are
According to Onukwube (2000) the primary goal of the materials function of planning, scheduling,
the construction team is to finish projects as procurement, storing, transportation and
specified, on schedule and within budget. The distributing. These are logically represented by the
whole system of construction management exists to discipline of production (construction) and
ensure that we meet these goals. inventory control, purchasing and physical
Mezue (1992) was of the opinion that cost in the distribution.
cost of construction project. The cost of materials Oyeoku (2001) quoted Swindler (1971) that
has been put at an average of 65% of the contract materials management is regarded as the system
sum. Bearing this in mind the operators of the approach applied to the materials area. As an
construction industry should optimize the cost of organizational concept, it involves grouping the
construction. It is expedient that a good materials business functions relating to the inflow and
flow must be maintained on site to avoid excessive interplant movement of materials under a head who
wastage and save idle time. is in a position to coordinate and correlate
Mezue (1992) still suggested that one of the ways individual departmental decisions in a manner
to optimize the cost of construction is through which results in the most efficient allocation of an
material storage. organizations resources. Thus, a materials manager
Onukwube (2000) stated that the physical material must be an innovator, developer, organizer,
resources on a given project can run from forty to activator, coordinator and controller of dynamic
sixty percent of total installed project cost, which interdependent systems of human and technical
makes it a budgetary force to be reckoned with. interaction. He can draw upon the skill, technical
The overall philosophy for controlling the physical knowledge and professional competence of a great

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

many individual specialist, but in the final analysis The management style of the executives


it is his task to bring together these divergent The degree of centralization
capabilities and produce a smoothly functioning

The volatility of the supply market
human groups. It therefore requires that the The type of products and pace of
materials manager be a broad gauge managers so technological change which affects the
that the benefits of materials management can be

industry
really and fully realized.

Managerial known how
Materials management like value engineering The communication system
analysis the function and considers alternative Historically, all firms conducted their construction
ways of achieving that function, selecting that planning and control activities manually, with the
which costs less. It differs from cost reduction, specialized use of a variety of Gantt charts and
which only considers ways of cheapening the cost specialized visual scheduling/control boards.
of the products as it is. Today, most firms utilize some types of computer
Oyeoku (2001) highlighted those four specific based system to perform a essentially the same
reasons for need for an integrated material types of activities. Regardless of the specific
management need be thoroughly evaluated. The operating system used, an effective construction
areas are improvement in procurement, materials planning and control operation must accomplish
planning, ratio between value of inventory and five general activities.
usage of materials and materials emergencies and Preliminary planning
disruptions. Aggregate scheduling
Detailed construction scheduling
MATERIAL PLANNING IN Release and dispatching or orders
CONSTRUCTION PROJECTS Progress surveillance and corrections
Construction management is the judicious Kamang (1992) stated that materials, manpower
allocation of resources to accomplish project and equipment are important project resources that
completion at maximum efficiency of time, cost requires management attention. The supply and
according to Kamang (1992). Dobler and Burt availability of these resources are seldom
(1996) considered the objective of planning and completely certain because of shortages, competing
control function is to coordinate the use of a firm’s demands, inefficiency of supplies and other
resources and to synchronize the work of all reasons.
individuals concerned with the construction in
order to meet required completion dates, at the
SELECTION OF CONSTRUCTION
lowest total cost consistent with desired quality.
MATERIALS
Materials requirement planning is technique used
When evaluating a construction material, the
to determine the quantity and timing requirements
selection of the material must be based on several
of dependent demand “materials used in the
factors. Huntington (1981) classified the factors as
construction operation”. Dobler and Burt (1996).
economic criteria, mechanical properties and
The materials requirement planning and the aesthetic qualities. Selection depends on the
Capacity Requirement Planning (CRP) segments of intended function or application, which is based on
the construction planning system are the the materials performance in these three
responsibility of the responsibility of the classifications.
construction managers.
Product evaluation is seldom the same for any two
Construction planning personnel are responsible for applications. There may be similarities between
structuring and formatting the bills of materials projects but each projects priorities and conditions
eventually contained in computer for setting up the must be evaluated. Huntington (1981) argued that
part and component inventory status record. although mechanical properties and aesthetic could
Farmer, Bauly, Jessop and Jones (1994) quoted make material selection seem obvious, economics
Anthony (1965) described planning as the frequently dictates. Usually, the mechanical
organization of resources used to attain these properties or behaviours of a materials are the basis
objectives and on the policies that are to govern the for the economic rationale. Seldom is a choice of a
acquisition, use and disposition of these resources. material based on a single factor but selection is
In effect planning involves a systematic process of based on a combination of factors. Rarely is
making strategic decisions. aesthetics the sole determinant except perhaps is
The different sets of characteristics identify monumental architecture but even then property of
planning from the procurement. However, it is durability is a consideration. Economically,
important that the organization, systems and material may be evaluated on cost, maintenance,
procedures, which are developed, will reflect for fire resistivity, availability, replace ability and

examples: perhaps durability.


The degree of internationalization
The size of the company MATERIAL PROCUREMENT

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Professional procurement/supply management traditional buying role, with more buyer

personnel contribute at least as much to the success participation in related materials activities. Specific
of their organizations as other professionals in activities usually included in the process are:
areas such as marketing, finance and accounting, 1. Participation in the development of
engineering and operations. Specialized knowledge material and service requirements and
in scientific principles of commercial, technical and their specifications.
relationship management is essential. Dobler and 2. Conduct of materials studies and
Burt (1996). management of value analysis activities.
Farmer, Baily, Jessop and Jones (1994) said that a 3. Conduct of more extensive material
well-known definition of procurement objectives market studies
is: to purchase the right quality of materials, at the 4. Conduct of all purchasing function
right time, in the right quantity of materials, at the activities
right time, in the right quantity, from the right 5. Management of inbound transportation
source, at the right price. The following board 6. Management of supplier quality
statement in objectives is suggested. 7. Management of investment recovery
1a. To supply the organization with a steady activities (savage of surplus and scrap)
flow of materials and services to meet its Some of the more specific objectives such as:
needs. 1. To select the best suppliers in the market
b. To ensure continuity of supply by 2. To help generate the effective
maintaining effective relationships with development of new products
existing sources and by developing other 3. To protect the company’s cost structure
sources of supply either as alternatives or 4. To maintain the correct quality/value
to meet emerging or planned needs. balance
2. To buy efficiently and wisely, obtaining 5. To monitor supply market trends
by an ethical means the best value for 6. To negotiate effectively in order to work
every money spent. with suppliers who will seek mutual
3. To manage inventory so as to give the best benefit through economically superior
possible service to users at lowest cost. performance.
4. To maintain sound co-operative The purchasing work need to work effectively with
relationships with other departments, research and development through providing data
providing information and advice as on supply economics at a earlier stage.
necessary to ensure the effective operation Farmer (1994). The achievement of this depends on
of the organization as a whole. the product development and product life, source
5. To develop staff, policies, procedures, and selection, planning, training needs of procurement
organization to ensure the achievement of staff. For purchased materials were completely
the foregoing objectives. dominated. The responsibility for incoming quality
The procurement process, or concept, encompasses was placed with the purchasing department and
a wider range of supply activities than those delegated to each supplier organization. This
excluded in the purchasing function. And it required a reasonable amount of suppler education.
typically includes a broadened view of the

3.0 METHODOLOGY
MODEL FORMULATION
In this study, the linear regression model was adopted for analysis. Its formulation is as follows:
Y = a0 + b1X1 + b2X2 + bnXn = e0
Where
A0 + b1…………Ba represents the coefficients to be estimated.
Y: Is the dependent variable, which represents an assessment of the state of materials management of
construction projects.
X 1: Is a composite variable representing the planning of construction materials for construction projects.
X 2: Is the construction material procurement method of construction projects and their impact on
construction material management.
X 3: Is for the construction material handling technique of construction projects, and their effect on
construction material management.
X4: Is for the construction material storage method applied to construction projects and their effect on
construction material management.
X5: Is for the material usage process of construction projects and their impact on construction material
management.
The regression parameters were computed using the following formulae:
b1 = N ∑X1Y1 (∑X1) (∑Y1)

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N∑ X12 (∑ x1)2
And
an = ∑Y1 - β1 ∑X1
N
The correlation coefficient (R) is determined using
R = N ∑X1Y1 (∑ X1) (∑Y1)

(N∑ X 12 (∑ x1)2] [[N∑ X12 (∑ x1)2]

The coefficient of determination (R2) is determined using the formula:

R2 = SSR
SST
Where:
SSR = b1 ∑X1Y1 - ∑X1 ∑Y1
N
And
SST = ∑Y1 - ((∑Y1)2
N
SSR is the sum of squares due to regression while SST is the total sum of squares, which is equal to:
SSR + SSE
Where SSE is the sum of squares due to error.
The mean square due to regression (MSR) is obtained as
MSR = SSR
K
Where “k” is the number of independent variable. The mean squares due to error is obtained as:
MSE = SSE
n-k-1
The R2 (Coefficient of determination) measures the proportion of the total variation in the assessment of the
application of material management strategies in the construction industry, that is our dependent variable (Y),
that is explained by the variations in the selected aggregates of material management strategies, that is
independent variables, put together.
The value of R2 is expected to range from
0 ≤ R2 ≤ + 1
The correlation of coefficient (R):
The multiple correlation coefficient R measure the strength of contribution of the selected aggregate of materials
management on the level of application of materials management strategies to construction project.
This is calculated using the formula:
R = + R2
Where
- 1≤ R≤+ 1
THE F – TEST
The F-ratio is used to test the significance of the contribution of all the selected variables of construction
materials management strategies on construction projects in Nigeria.
This is carried out suing the Analysis of variance table (ANOVA).

ANOVA TABLE
SOURCE OF SUM OF SQUARES DEGREE OF MEAN F-RATIO
VARIATION FREEDOM SQUARES
Regression SSR = R2 ∑Y2 K MSR = SSR F = MSR
K MSE
Error SSE = ∑Y2 – R2 ∑Y2 n-k-1 MSE = SSE
n-k-I
Total SST = ∑Y2 n-1

DECISION RULE:
Having computed the F-ratio, the null hypothesis (H0) is accepted at α = 0.05 significant level if: F* F1-α : K,
n-k-1 degrees of freedom, otherwise H0 is rejected in favour of the alternative hypothesis (H ^), for a one-tail
test. Here F1- α : k, n-k-1.

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4.0 RESULTS AND DISCUSSION-The table below represents a summary of the weighting of the
opinion of our respondents (construction professionals) based on the Likert ranking to the six parameters
selected in this study for the analysis of materials management in the construction industry.The scores is based
on the weighting of their ranking of each of the variables and the summation of the weighted scores for each of
the respondent. The variables are as follows:

Y = Assessment of state of materials management in a selected construction site

X1 = Assessment of materials requirement planning process
X2 = Assessment of materials procurement process
X3 = Assessment of materials handling process
X4 = Assessment of materials storage process
X5 = Assessment of materials usage process

SUMMARY OF WEIGHTED SCORES BASED ON FIELD RESPONSES

S/0 Y X1 X2 X3 X4 X5
1 11 6 24 26 29 19
2 17 25 22 18 22 20
3 10 15 9 17 19 21
4 27 27 26 29 29 24
5 14 18 15 20 21 23
6 23 24 20 22 27 17
7 19 21 12 22 24 19
8 24 17 19 21 27 16
9 9 7 4 11 10 15
10 28 28 27 29 29 24
11 16 20 21 22 26 28
12 19 21 23 24 27 17
13 17 20 21 23 26 21
14 27 27 28 29 29 24
15 15 14 18 22 23 18
16 18 20 22 27 24 28
17 20 15 9 20 21 23
18 17 19 26 23 24 25
19 14 17 23 25 27 20
20 26 28 24 29 29 26
21 12 17 22 24 23 24
22 15 21 22 9 22 18
23 19 21 21 28 27 26
24 13 17 23 24 28 24
25 13 21 18 20 8 20
26 23 20 24 25 22 17
27 15 17 18 23 24 19
28 29 23 22 24 25 23
29 13 21 23 15 27 22
30 18 17 20 24 23 26
31 23 22 24 27 28 22
32 12 21 22 28 23 20
33 19 21 20 26 27 24
34 12 16 17 22 27 23
35 28 22 24 29 28 23
36 19 10 20 18 21 19
37 18 17 19 23 24 13
38 21 13 22 27 23 24
39 12 15 17 22 24 20
40 27 24 8 28 29 25
41 19 21 21 24 23 22
42 16 18 20 27 28 21
43 9 4 10 12 13 14
44 13 20 22 26 25 21
Source: Computed from field responses

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DESCRIPTIVE STATISTICS
VARIABLES MEAN STANDARD DEVIATION SAMPLE SIZE
Y 17.93182 5.596501 44
X1 18.81818 5.318999 44
X2 19.81818 5.279503 44
X3 23.04545 4.841461 44
X4 24.20455 4.668447 44
X5 21.31818 3.568419 44
Source: Computer Analysis of Table 4:1 Data using E-view Package

The above result shows that the variable with the least mean is Y, “the assessment of state of materials
management in construction projects”. While the highest is X4 “the assessment of materials storage procedure of
construction projects”, which is one of the independent variable.
Also, the variable with the least standard deviation is X 5 “the assessment of materials usage process”, while the
variable with the highest standard deviation is Y “the assessment of state of materials management in
construction projects”.

ANALYSIS OF CORRELATION AMONG EXPLANATORY VARIABLES

Pairwise Correlation Matrix was employed to analyse the level of relationship among the explanatory variables.

Variables X1 X2 X3 X4 X5
X1 1 0.4982 0.4934 0.4932 0.4381
X2 0.4982 1 0.5289 0.5705 0.3105
X3 0.4934 0.5289 1 0.6601 0.5147
X4 0.4932 0.5705 0.6601 1 0.4008
X5 0.43808 0.3105 0.5147 0.4008 1
Source: Computer Analysis of Table 4:3:2 Data using E-view Package
From the table above, the least correlation was observed between X 2 and X5 with a coefficient of 0.3105, while
the highest was observed between X3 and X4 with coefficient of 0.6601.
This result shows that the problem of Multi-collinearity is minimal in the analysis, as the level of relationship
among the explanatory variables is low, and thus the variables are a good fit of measurement.

REGRESSION ANALYSIS
Dependent Variable: Y
Method: Least Squares
Date: 12/10/12 Time: 09:35
Sample: 1 44
Included Observations: 44
Variable Coefficient Std. Error T. Statistic Prob.
C 1.084453 4.229998 0.256372 0.7990
X1 0.570206 0.147860 3.856399 0.0004
X2 -0.114384 0.153129 -0.746979 0.4597
X3 0.360426 0.189325 1.903743 0.0645
X4 0.185207 0.191713 0.966064 0.3401
X5 -0.206633 0.209892 -0.984471 0.3311
R-Square 0.531505 Mean dependent var. 17.93182
Adjusted R-squared 0.469861 S.D.Dependent var 5.596501
S. E. of Regression 4.074848 Akaike info Criterion 5.773668
Sum Squared Resid. 630.9668 Schwarz Criterion 6.016967
Long Likelihood -121.0207 F-Statistic 8.622161
Durbin-Watson Stat. 2.332116 Prob (F-Statistics) 0.000016
Substituted Coefficients:Y = 1.084452539 + 0.5702062292*X1 - 0.1143841692*X2 + 0.3604260282*X3
+ 0.1852074864*X4 - 0.2066328778*X5

DISCUSSION OF FINDINGS The coefficient of determination value of 53.15%

indicated that about 53.15% variation in Y

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(assessment of state of materials management in a materials management in Nigeria

selected construction site) is explained by construction industry.
variations in the explanatory variables. And that iii. The cost associated with over storage
only 46.85% variation in Y (Assessment of state of and handling in construction sites can
materials management in a selected construction be minimized through efficient
site) is left unacounted for by the model which is materials requirement planning.
attributed to the error term.
Similarly, the Adjusted Coefficient of
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