Minimising logistic cost of construction materials in the construction industry: contractor's perspective

Abstract

Construction projects involve major resource consumption, particularly in materials which can account for up to 60% of the total construction cost. Construction logistics is the integration and collaboration of several activities to plan, execute, and control the flow of physical objects from their point of origin to their point of consumption. While logistics plays a significant role in minimising material costs, the construction industry tends to pay less attention to logistic cost minimisation. This paper aims to identify construction logistic cost components and propose strategies to minimise these components on construction material cost from a contractor's perspective. Accordingly, the literature review highlighted the significance of construction materials as a resource for construction projects and the importance of material costs in total construction costs. Moreover, semi-structured expert interviews were conducted with twelve (12) experts involved in construction logistics to gather data. Both on-site and off-site experts were included in the sample. Manual content analysis was used to analyse the collected data due to its flexibility and adaptability for small sample sizes. Thirteen (13) strategies were proposed to minimise construction logistic costs on material costs, including proper knowledge of the logistic process and its cost components and implementing proper logistic cost minimisation strategies through coordination and collaboration between the head office and the site. The findings of this study are expected to contribute to the construction industry's better understanding of the importance of logistic cost minimisation strategies and their potential benefits.