Materials management means something different to different groups of people. For the engineering and construction (E&C) industry, the Construction Industry Institute (CII; Austin, Tex.; www.construction-institute.org) [ 1 ] defines materials management as "a complex and comprehensive process involving people, organizations, technologies, and processes that manage the definition, source planning, quantification, supplier qualification, purchasing, supplier quality assurance and quality control (QA/QC), expediting, transportation, logistics and control of materials and associated information across the life cycle of a capital project" (Ref. 1, p. v).

In the 30 years since the E&C industry first began focusing on materials management as a concept, the practice has evolved and continues to evolve. As E&C contractors face challenges to remain competitive in a dynamic marketplace, a lightly structured materials-management organization that functions as a coordinating resource provides a vehicle to facilitate the delivery of lowest possible total-installed-cost (TIC) facilities. And - if thoughtfully structured within the overall E&C organization - a thoughtful materials-management framework can be the most effective tool that the E&C project management has to support all business objectives.

Discussed below is one example of how a materials-management organization should be structured to optimize materials-related work processes in an evolving environment. The discussion shows how proper materials-management effort can help an organization to add value and defray unintended negative consequences (Figures 1 and 2).

Key activities

In Ref. 1, p. 17, CII articulates the key materials-management activities as the following:

Materials-related requirements planning Project-acquisition strategies Purchasing and subcontracting activities Expediting activities Supplier-quality management Transportation and logistics actvities Site-materials management Planning for operations and maintenance turnover Further details can be found in in additional CII publications [ 1-5 ].

Scope and breadth

To facilitate the lowest TIC, materials-management planning and activities need to be "cradle-to-grave," "cross-functional" and assertively proactive. In terms of cradle-to-grave, this means the materials-management team engages at the earliest phases of project planning, and continues, actively engaged, until all materials-related issues on a project have been addressed, resolved and dispositioned.

In this context, cross-functional means that the materials-management team addresses every function within project execution that involves project materials, specifically the following:

All engineering disciplines - This includes activities related to civil, structural and mechanical engineering, piping, electrical, instruments and architectural considerations Procurement activities (as organized by the E&C company) - This involves purchasing, expediting, ensuring supplier quality, and managing traffic and logistics Construction activities - This involves field engineering, receiving, warehousing and withdrawal Startup and turnover - This includes the materials that are "permanent plant" (meaning they will become part of the physical plant); those that are temporary (those that are used and scrapped during construction); and spares that are used in installing, commissioning or operating the facility Most important is the need for the materials-management organization to be assertively proactive - not just proactive, but assertively so; this is discussed in detail below.

Organization and reporting

Within the E&C industry, some organizations have chosen to simply re-describe or re-characterize their procurement organization as materials management. But historically, materials-requirements planning and...