Materials are one of the largest expenses in any construction project—and one of the most unpredictable. Every project manager has probably experienced materials showing up three weeks early and sitting in the rain—or worse, not showing up at all, so the crew burns daylight just waiting. That puts the job behind schedule and over budget. Such construction materials management failures compound quickly, with delayed schedules frustrating clients, emergency orders straining budgets, and disorganized jobsites putting workers at risk.

With the right combination of strategies and technology, construction companies can replace the persistent headache of managing materials with processes that create predictable workflows and keep projects moving. This article covers the essential components of effective construction materials management, from implementing a comprehensive management framework to leveraging digital tracking systems that speed up work, improve project outcomes, and strengthen the bottom line.

What Is Construction Materials Management?

Construction materials management refers to the planning, procuring, storing, tracking, and distribution of materials throughout a construction project. These processes must work together to get the right materials to the correct places exactly when construction teams need them.

The scope of materials management is broader than standard inventory management because it must work within the larger project management framework, coordinating with scheduling and procurement teams to align deliveries with a project’s phases. Construction materials management encompasses every stage of the material lifecycle from initial vendor sourcing through transportation and installation or disposal. Its synchronized approach helps prevent materials shortages while avoiding excess inventory, all in an effort to control costs, meet project deadlines, and reduce waste.

Key Takeaways

  • Construction materials management spans planning and sourcing materials through to their installation or disposal, all to give work crews exactly the materials they need for the job at hand.
  • Materials management strategies address five major categories—materials, time, amount, price, and sources.
  • Common materials management challenges—inaccurate forecasts, limited storage space, supply chain disruptions—require proactive mitigation strategies to prevent work stoppages or holding excess stock.
  • Best practices for managing materials include standardizing processes, maintaining strict handling procedures, updating forecasts as real results come in, and implementing software to increase visibility.

Construction Materials Management Explained

Materials management directly affects the success and profitability of each project. When materials arrive late, crews and equipment sit idle; each day of delay can cost thousands in labor expenses and potential contract violations. Conversely, materials that arrive too early take up space on the jobsite, risk damage or theft, and tie up working capital that could be funding other initiatives.

Beyond timing, materials management also touches job quality, safety, and client satisfaction. Material tracking, often aided by digital tools, provides detailed information, such as material requirement verification, documentation for inspections and compliance, and progress updates for both management and clients. These records help contractors enhance project deliveries and lead to more informed project bids, faster work, and a reputation for reliability.

The 5 ‘Rs’ of Materials Management

Materials management strategies for procuring, allocating, and protecting supplies vary by project size and scope. A comprehensive approach should address the following five “Rs”:

  1. Right materials: Individual projects require specific materials, not only to meet architectural and engineering needs but also to satisfy building codes. For instance, a commercial project will likely require a particular grade of fire-resistant drywall to pass inspections.
  2. Right time: Coordinating material deliveries with construction phases keeps crews productive as they move through the project. If ready-mix trucks arrive to pour concrete precisely when crews are ready, for example, it minimizes idle time for delivery and construction teams alike.
  3. Right amount: Materials shouldn’t clutter jobsites or strain budgets. Accurate order sizes diminish the number of necessary vendor trips or the need to store vulnerable excess materials. A framing team, for example, should obtain just enough lumber for the job at hand instead of allowing excess wood to sit onsite and warp in humid weather and rain.
  4. Right price: Construction businesses can protect margins by negotiating competitive rates for materials with multiple suppliers. Proactive strategies, such as buying bulk hardware or locking in early discounted rates for materials with volatile prices, can help companies increase profitability without harming quality.
  5. Right sources: Reliable suppliers deliver quality materials on schedule. Maintaining several vendors and monitoring supplier performance over time, especially for common materials like bricks or steel, allow contractors to keep materials available when needed, without incurring back orders or quality issues.

Why Does Materials Management Matter in Construction?

Annual global spending on building materials was pegged at $1.5 trillion dollars in 2022, according to Grand View Research, and it is expected to grow at an annual average of 4.1% through 2030. But the research firm also points out that builders’ demands for speedier production schedules and lower operational costs are also on the rise, forcing competitive companies to build faster and more efficiently than before. Mismanaging materials can derail even well-planned construction projects because of cost overruns, delays, safety and quality issues, and reputational harm from disorganized worksites. Contractors with good materials management plans gain three critical advantages:

  • Better cost control: Accurate material forecasting allows construction companies to strategically purchase supplies and curb overall project costs. When they know exact requirements, contractors can better negotiate volume discounts, avoid rush-order premiums, and minimize waste disposal fees.
  • Improved material quality: Companies using lot-specific material tracking can more effectively evaluate their vendors and verify material quality as orders arrive. This due diligence makes sure building materials meet specifications prior to installation, preventing defective or incorrect materials from necessitating costly rework and delays.
  • Optimized material usage: Precise ordering and inventory data, especially when bolstered by automated scanners, helps construction companies know the exact location of all building materials at all times. This knowledge allows companies to scale back undiscovered waste and theft, as well as the labor hours spent searching for, moving, or reordering materials.

Key Functions of Construction Materials Management

Materials management requires coordination among the many departments and functions that span the entire project length. Focusing on the six core activities below helps construction companies effectively leverage their materials as projects flow from one phase to the next:

  • Materials requirement planning (MRP): Before placing orders, businesses must calculate the precise material types and quantities needed for each project phase. Modern construction companies typically use MRP software to analyze the blueprints and schematics for each job and plan materials accordingly.
  • Materials sourcing and purchasing: Once procurement teams know what to buy, they can compare qualified suppliers and negotiate contracts for materials that meet their specifications. This means comparing prices, verifying certifications, establishing payment terms, and arranging delivery schedules so they align with construction phases.
  • Supplier relationship management (SRM): The regular performance monitoring and clear communications with long-term vendors afforded through SRM can help businesses maintain reliable service and high-quality supplies. Strong supplier relationships can also give firms advanced warnings and higher priority during shortages, as well as favorable payment terms.
  • Quality control: When materials arrive, construction teams should inspect each shipment to verify that the goods meet specifications before they are installed. This cuts down on rework and also provides documentation for warranty and insurance claims, as well as compliance audits.
  • Storage and inventory management: Well-organized jobsites with clearly designated storage areas give crews quick and easy access to materials and protect supplies from weather, theft, and damage. Proper inventory tracking also shrinks retrieval time and keeps jobsites safe.
  • Material handling and disposal: Some materials come with rules for special handling, such as for multiperson lifts or specialized equipment, to prevent injuries or damage. Once materials are used, businesses must properly dispose of any leftovers in accordance with environmental regulations, which they often accomplish by partnering with certified recycling companies.

Construction Materials Management Obstacles

Even well-planned construction projects can run into unanticipated challenges that foil schedules and budgets. Understanding the most common obstacles allows contractors to develop mitigation strategies and add realistic buffers into contracts, estimates, and deadlines. This proactive approach helps avoid rushed work and frustrated customers when projects encounter speedbumps.

Accurate Forecasting

Initial projections and demand forecasts help construction companies plan their material needs, but design changes, weather delays, and unexpected site conditions can call for mid-project adjustments. To determine the right amounts to buy based on a forecast, procurement teams must assess the risk of stockouts that halt work against the cost of tying up essential capital in extra inventory. This is a significant challenge for construction businesses that rely on materials that are subject to volatile prices, like steel, which jumped 147% from 2017 to 2022 before dropping 16% over the course of the following year, according to the most recent St. Louis Federal Reserve data. If a firm does overorder, once the job is done it may be able to resell unused materials or use them on future jobs to help recoup costs.

Inventory Tracking and Storage

Limited jobsite space forces contractors to carefully plan materials deliveries and storage, often by assembling a combination of external storage units, designated onsite areas, and temporary storage containers or work vans that travel between sites. Without a proper inventory management system in place, materials can get stolen, misplaced, or damaged by weather or misuse. Additionally, for complex projects involving multiple teams, materials can be accidentally commingled and used by other crews, contributing to further potential losses.

Handling Supply Chain Disruptions

Material shortages, transportation delays, and supplier bankruptcies can abruptly halt construction. The emergence of global supply chains has made lead times less predictable, but contractors that engage multiple suppliers and maintain safety stocks will be better positioned to navigate any slowdowns. Even so, specialized materials with limited suppliers, long manufacturing times, or short shelf-lives can be difficult to keep on hand, so it may be wise to prepare contingency plans or substitutions in the event of extended supply chain disruptions.

Materials Planning and Coordination

Even a brilliant material delivery plan must allow for the realities of the jobsite. Therefore, coordinating materials among multiple subcontractors and project phases demands constant communication and adjustment. When electrical contractors need materials earlier than scheduled or framers work more slowly than anticipated, the delivery schedule must shift. Poor coordination can lead to storage problems, idle shifts, and missed deadlines when materials arrive too early or too late. Many construction companies use collaborative, cloud-based platforms to give all teams up-to-date information whenever they need it.

Construction Materials Management Best Practices

Contractors of all sizes develop targeted materials management strategies based on their specific trade. An electrical team, for example, may prioritize secure storage sites for high-value copper wiring, while the window team focuses on protective transportation for fragile glass. Let’s explore best practices that construction companies of all types use to make the most of their materials investments:

  1. Standardize purchasing procedures: Standardization can help minimize manual errors, shorten lead times, and unlock bulk discounts. It’s a good idea to create consistent procurement processes throughout the company that incorporate approved vendor lists, purchase order templates, and authorization protocols.
  2. Reinforce and optimize materials storage: Designate and clearly label areas for specific materials to keep sites safe, make sure the materials are accessible, and comply with regulations like Occupational Safety and Health Administration Standard 1926.250, which covers materials storage. Conduct frequent checks on materials like drywall and lumber, which are susceptible to moisture damage, and monitor flammable or vapor-producing chemicals that need proper ventilation.
  3. Keep detailed materials forecasts: Revise materials projections as projects progress, comparing real results with planned monthly, weekly, or even daily schedules. Updated forecasts help procurement teams adjust orders and set thresholds for reorders or cancellations. They also help track and minimize shipping expenses and carrying costs, for example, on jobs that use fewer materials than expected.
  4. Maintain strict handling protocols to reduce losses and damage: Provide crews with training on proper material-handling techniques, including lift requirements and shelving weight limits, and invest in appropriate equipment for heavy and large materials. Clearly post documentation about the handling of specialty items and assign onsite managers to enforce the rules.
  5. Keep communication lines open: Host regular meetings—daily, if necessary—so project managers, procurement teams, and subcontractors can review upcoming needs and flag potential concerns before they negatively impact schedules. Collaboration tools, such as real-time dashboards, can give stakeholders accurate and timely updates on material locations, delivery changes, and any urgent issues or requests.
  6. Consider kitting: Group related materials into job-specific bundles before they leave the central warehouse to curtail onsite sorting time. For instance, electrical junction boxes pre-kitted with fasteners and connectors will shorten electricians’ installation time and slash the number of lost components.
  7. Align materials delivery with job schedules: Schedule deliveries as close to installation as possible to decrease onsite clutter and storage confusion. Just-in-time (JIT) delivery strategies work particularly well for fragile materials or those prone to theft, though JIT requires precise coordination between suppliers and construction teams.
  8. Reuse excess materials to reduce waste: Implement companywide exchange systems for surplus materials, entering quantities, condition, and storage locations into a central database to increase utilization. Project managers can then easily claim these extra materials from other jobsites before ordering new supplies, strengthening margins and trimming disposal costs.
  9. Take on an attitude of continual improvement: Conduct post-project reviews to assess key performance indicators like material waste percentages, vendor performance, and storage costs against initial estimates. Use these metrics to identify forecasting shortfalls. Prioritize suppliers that consistently meet or exceed expectations.
  10. Keep documents up to date: Maintain digital records of all specifications, delivery receipts, and certifications in a central system. Project teams, analysts, and inspectors can then use the information when filing warranty claims, conducting compliance audits, running financial analyses, and providing evidence to vendors when materials are found not to be up to par.

How Does Software Help Construction Materials Management?

Construction materials management software helps contractors track, order, and control materials across multiple jobsites. These systems use real-time inventory data to automate purchase orders when supplies run low throughout the project lifecycle, for example. The transparency such systems provide can help project managers quickly spot potential shortages and take steps to replenish stock without wasting capital or storage space. Managers also use materials management systems equipped with Internet of things sensors to monitor storage locations and track a variety of conditions, such as humidity and temperature, even from remote locations.

Materials management software can also integrate with accounting systems to weigh actual costs against budgets, generate financial reports, and forecast job expenses. Mobile apps allow field teams to scan materials the instant they’re delivered, transferred, and used, using automated processes to replace paper forms, spreadsheets, and time-consuming calls to the office. These records can serve as benchmarks to refine forecasts and budgets for future projects. Companies can also use this documentation to verify compliance and evaluate ongoing vendor performance.

Stronger Materials Management With NetSuite

Construction companies that rely on manual tracking and disconnected systems often struggle with limited visibility as their materials needs grow more complex over time. NetSuite’s cloud-based building materials software can integrate materials management with financials, project management, procurement, and customer relationship management in a single system for all jobsites. The software’s automated reorder points and integration with barcode and RFID scanners and mobile applications enable real-time tracking from delivery through installation. Project managers can use NetSuite’s role-based dashboards to compare materials costs against budgets, while procurement teams track vendor performance and executives analyze companywide materials utilization. NetSuite’s construction-specific features also include multilocation inventory management, project-based costing, and automated compliance documentation, all of which help businesses cut waste, improve cash flow, and complete projects on time and on budget.

Construction materials management is a cornerstone of project profitability and success. With a systematic approach to planning, procuring, storing, and tracking supplies, firms can trim costs and prevent delays and quality issues that can damage their profitability and their reputation. The right combination of best practices and technology—from standardized purchasing procedures to real-time inventory tracking—can turn a company’s materials from a cost guzzler to a competitive advantage that leads to higher quality work and a safer and more professional jobsite.

Construction Materials Management FAQs

What does a materials manager do?

A materials manager oversees the procurement, delivery, storage, and distribution of all building materials needed for a construction project. The manager coordinates with suppliers, procurement teams, project managers, and site supervisors to get quality materials to worksites on time and within budget, documenting each step of the process along the way.

What’s the difference between a supply chain manager and a materials manager?

Supply chain managers oversee the entire movement of goods from manufacturers to customers, monitoring progress across multiple projects or business units. Materials managers focus specifically on managing supplies for individual construction projects, often handling more granular steps, such as day-to-day procurement and distribution to multiple worksites.

What is the goal of materials management?

The primary goal of materials management is to get the right materials to the right place at the right time, while minimizing costs and waste. Successful materials management helps construction companies complete projects in line with expected timelines, budgets, and quality.