Chapter 4 presented the current material management practices in the electrical contracting industry. This representation is based on field interviews with personnel from different electrical contracting companies. Five phases, in which the current management material management practices could be divided, were identified: Bidding Phase, Sourcing Phase, Materials Procurement, Construction Phase, Post-Construction Phase. Decision nodes related to material management in each of the phases were also identified. This research focuses in the material management process during the construction phase. Problematic areas or challenges in the current material management practices were identified. These challenges were described in Chapter 5. Based on the challenges described in Chapter 5, the decision making process was studied to minimize the problems that could be encountered. Six questions that describe the decision making process during the construction phase were identified, this decision making
process was analyzed to provide a framework to assist the decision maker. This framework is explained in Chapter 7.
The six questions that were studied by this research are: what type of material to buy and from whom, how much material to buy, when to buy the material, when to deliver the material, where to deliver the material, where to store on site. The decision of what material to buy and from who is important to assure that the correct material is bought. If a different material than the specified is bought, the contractor will incur extra costs to get the correct material. Additional costs due to delays could be incurred. The decision of how much to buy is very important to assure that material quantities needed are available and that there are no material shortages. The decision of when to buy is important to ensure that the material order is placed in time, considering supplier lead time, to minimize delays with deliveries and giving suppliers the required advance notice to deliver the material before it is needed. The decision on when to deliver requires keeping records of the construction schedule and progress of the work in order to have the material available when needed. The decision of where to deliver the material requires space planning and consideration of site limitations, pre-fabrication strategies, and subcontractors to be used. The decision on where to store on site requires space planning and contingencies to avoid damage and to be able to track the material on site.
These six questions were identified from the interviews with electrical contracting companies. Field personnel were inquired about the main considerations when ordering material and what were the main decisions to tackle for this task. Based on their responses and on studying the flowcharts developed, it was concluded that the six questions considered in the study are essential for material management. Therefore, the study was undertaken to model the six decision making process related to these questions and to provide suggestions to decision makers.
This chapter presented an overview of decision modeling and the approach taken to model the decisions considered on the study. A definition of the inputs, represented by the parameters and alternatives, was presented. The performance measures that define the adequacy of the decision made were also introduced. The decisions processes studied were introduced and an explanation
of why these decisions were considered was. The following chapter presents the framework for the decision making system. SPARCS, which is a system developed for categorizing parameters, is described in Chapter 8.
6.3 References
Clemen, R.T., (1996), Making Hard Decisions, An Introduction To Decision Analysis, Second Edition, Duxbury Press, USA
Cooke, S., and Slack, N., (1984), Making Management Decisions, Prentice-Hall International Inc., London
Covaliu, Z., (2001), Decision Analysis: Concept, Tools and Promise, Fair Isaac Corporation, available at http://www.fairisaac.com/NR/rdonlyres/BF73CAEE-31A0-4304-B83E-
F68CA0A1F46A/0/DecisionAnalysisWP.pdf
Harris, R. (1998), Introduction to Decision Making, downloaded on March 2004 from www.virtualsalt.com
Heller, R., (1998), Making Decisions, DK Publishing Inc. New York
http://faculty.fuqua.duke.edu/daweb/lexicon.htm, downloaded on March 2004
http://groups.msn.com/DecisionModeling/decisionanalysis1.msnw, downloaded on March 2004
http://www.books.md/D/dic/decisionmaking.php, downloaded on March 2004
Oglesby, C., Parker, H., Howell, G., (1989), Productivity Improvement in Construction, McGraw-Hill Series in Construction Engineering and Project Management, USA
The Futures Group, (1994), Decision Modeling, AC/UNU Millennium Project, available at http://www.futurovenezuela.org/_curso/7-decision.pdf
CHAPTER SEVEN: FRAMEWORK FOR A
DECISION SUPPORT SYSTEM (DSS) FOR SUPPLY
CHAIN MANAGEMENT
As indicated before in this dissertation, materials management problems highly impact general contractors, but are more critical for specialty contractors including electrical contractors. The electrical contractor needs to establish an effective materials management system to minimize problems that might arise if the activities related to materials management are not handled properly. Among these problems, the following are encountered: material shortages, misplacements, loss, and theft, which might result in increases in crew idle times, loss of productivity and delay of activities. Electrical contractors should implement an efficient material management system due to the fact that in most of the cases they are asked to squeeze their bids in order to keep the costs of project under budget. In such a case, failure to effectively manage materials could result in decrease in profit or even a monetary loss. This chapter describes the supply chain management related decisions considered in the study, a graphical description of the processes related to such decisions, which includes the parameters and alternatives for each decision.