Construction Management and Entrepreneurship (17CV61)

MODULE – 2
A) RESOURCE MANAGEMENT
BASIC CONCEPTS OF RESOURCE MANAGEMENT
Construction companies face the challenge of delivering often complex projects to a
schedule, within a budget, and hopefully with a reasonable profit margin. Resource
management is the process of planning the resources necessary to meet the objectives
of the project, and to satisfy the client’s requirements.

Without proper resource management, projects can fall behind schedule, or can
become unprofitable. The objective is to ensure the adequate and timely supply of
resources, while at the same time maximizing the utilization of resources between
projects.

.IN
Construction resources include:
 Products and materials
 Construction plant, tools and equipment
C
 Human resources
N
 Finance
 Space and facilities
SY

Fundamental to resource management is real-time visibility of what resources are

needed, what resources are available, where resources are located, and the ability to
reschedule those resources accordingly.
U

RESOURCE MANAGEMENT PLANS

VT

A resource management plan can be used to:

1) Ensure resource availability and resolve resource conflicts.
2) Optimize time, effort and cost.
3) Ensure workers with the right skills are available.
4) Identify limitations, such as site access, weather conditions, and so on.
5) Reassign resources in response to circumstances.
6) Track resources utilization to avoid excessive resourcing or under-utilization.

TERMINOLOGIES
1) Acceleration – It may become necessary to accelerate the progress of works,
either to achieve the completion date, or to meet a new requirement imposed
by the client (such as accommodating additional works, or bringing the
completion date forward). Typically, this will require additional resources,
although it might be achieved by a reduction in scope of other works, or
changes to the design.

Page 24

Studied smart, not hard — thanks to [Link]

 Construction Management and Entrepreneurship (17CV61)

2) Fast-track construction – It is a scheduling technique that can be used to

reduce the overall duration of projects by overlapping tasks that on a
traditional contract would not be commenced until the previous task was
completed. While the same number of tasks needs to be performed, they are
condensed into a shorter period, and so are likely to require more
resources.
3) Resource leveling – It is a project management technique in which the
demand for limited resources is accommodated by adjusting the project
programme. In construction, resource leveling can be used to analyze the
variations in resource usage that can occur over time, and which can be
inefficient and costly.

CLASS OF LABOUR

.IN
Workers at the project site are made to perform a specified function and its
connected tasks. These workers include supervisors, construction workers,
operators and drivers, and administrative personnel. For ease of estimating,
planning, accounting, and controlling, the project workers are classified into two
C
groups, namely, direct workers and indirect workers.
N
1) DIRECT LABOUR
SY

These are construction site workers who can be identified with execution of the
client’s permanent works, listed in the bill of quantities (BOQ). The direct
manpower constitutes 70-85% of the total manpower, which is employed at the
project site.
U

The direct construction workers include foremen and tradesmen, skilled in various
engineering trades, in addition to the semi-skilled and unskilled manpower. The
VT

tradesmen include, shuttering, carpenters, fabricators, masons, plumbers,

electricians, metal workers, painters and decorators.

Generally, the wages of construction site workers are accounted on daily or

monthly basis, while, their activity-wise requirement is computed using the
Labours’ Productivity standards.

2) INDIRECT LABOUR
The indirect labour covers all supervisors, staff and workers. It is required to
support the direct manpower, both, technically and administratively. It generally
consists of the project management and administration group. They are accounted
on monthly basis.

Further, construction labours can also be classified as follows:

1) Unskilled labour
2) Semi-skilled labour

Department of Civil Engineering, MIT Mysore Page 25

Studied smart, not hard — thanks to [Link]

 Construction Management and Entrepreneurship (17CV61)

3) Skilled labour

Unskilled Labour – It refers to workers who possess no particular skills and likely
have no formal education. This type of work usually involved simple duties that
don’t require judgment. In most of the cases, unskilled labour requires to exert
more physical strength. But due to technological
advancements and demand for skills, unskilled labour in the construction industry
will need to advance their skill set.
Semi-skilled Labour – They do not require advanced training or specialized skills,
but it does require more skills than an unskilled labour job. The types of skills
necessary for this are not complex but usually include the ability to monitor and
perform repetitive tasks. These types of skills are more likely to be transferrable
and useful in other jobs.
Skilled Labour – It refers to workers who have specialized training or skills. These

.IN
labours are capable of exercising judgment and have knowledge of the particular
construction activity they are working on.

WAGES & STATUTORY REQUIREMENTS

C
Construction workers are paid very low wages. The net worth of wages is
N
considerably reduced due to periods of unemployment. There are two methods of
making wage payments to labours:
SY

1) Time rate system

2) Piece rate system
1) Time Rate System
U

In this system, a suitable rate of payment is fixed per unit of time that labour is
VT

engaged on the work. The unit of time may be hour, day, week, fortnight or month.
In India, the rate of payment for casual labour is determined per day and that of
regular employees per month.

2) Piece Rate System

In this system, payment is based on output or production of workers. Payment is
made at the agreed rate for the actual quantum of work done by each labour. In this
system, a good worker can make more money by increasing his output.

MINIMUM WAGES ACT, 1948

The Minimum Wages Act of 1948, as amended in 1986, was passed for fixing the
minimum rate of wages of labour in certain employments keeping in mind the
welfare of the workers. There is likelihood that construction labour may offer to
work even on starvation wages because of the acute problem of unemployment in
our country. This act makes provisions for the statutory fixation of a minimum rate
of wages in a number of industries where there are chances of exploitation of
labour.

Department of Civil Engineering, MIT Mysore Page 26

Studied smart, not hard — thanks to [Link]

 Construction Management and Entrepreneurship (17CV61)

CONTRACT LABOUR (REGULATION AND ABOLITION) ACT, 1970

The Contract Labour (Regulation and Abolition) Act of 1970, as amended in 1986,
was enacted with the object of regulating the employment of contract labour in
certain establishments and providing for abolition of contract labour in certain
circumstances. The act incorporates provisions for improving the condition of
contract labour. The act is of special importance to the construction industry
wherein works are generally executed on contract basis involving contract labour.

LABOUR PRODUCTION RATE (or) PRODUCTIVITY

The measure of the rate at which work is performed by a labour is called
“productivity”. It is a ratio of production output to what is required to produce it.
The measure of productivity is defined as a total output per one unit of the total
output.

.IN
In construction, the output is usually expressed in weight, length, or volume, and
the input resource is usually in cost of labour or man-hours. There are many
standards available in the construction industry for contractors as reference values
for purposes of construction cost estimation. These standards may vary in values
C
but most are similar in principle.
N
Increased productivity means within the defined time frame, the production
increases without any cost variation per unit.
SY

Workers’ Production Standard = Worker output * Production efficiency factor

Workers required = Work quantity * ′
U

Problems
VT

1) Consider a task involving 160 m2 of fixing timber formwork for the roof slab of a
single storey building. The time earmarked for completion is four days, working
eight hours per day. If a workers’ team consisting of two skilled and an unskilled
worker can install the fair-face formwork at the rate of 1.25 m2 per team hour, then
calculate the number of labours required.

FACTORS AFFECTING LABOUR OUTPUT (or) PRODUCTIVITY

There are many factors that affect the productivity of labour in construction. They are:
1) Overtime – Scheduling of extended work days or weeks exceeding a
standard work day or 40 hour work week lowers work output and efficiency
through physical fatigue and poor mental attitude.
2) Fatigue–Fatigue can be caused by prolonged or unusual physical exertion.
3) Concurrent operations – This is the effect of adding operations to any
sequence of operations that has already been planned, without a gradual
and controlled implementation of additional operations.

Department of Civil Engineering, MIT Mysore Page 27

Studied smart, not hard — thanks to [Link]

 Construction Management and Entrepreneurship (17CV61)

4) Mobilize/Demobilize – This relates to moving resources on and moving off

to projects as a result from changes or delays, causing work disruptions.
Productivity may drop during these periods as time is lost when labours
move from one area or work assignment to another.
5) Reassignment of manpower – When workers are reassigned, they
experience unexpected or excessive changes, losses caused by move-on or
move-off, reorientation, and other issues that result in a loss of productivity.
6) Start/Stop – These results from a work stoppage or suspension of work,
which may cause a break in the schedule, usually, triggering a start/stop of
work activity. Start-stops can have an impact on productivity and cost of a
project.

7) Site Access–This is a result of interferences to the convenient or planned

access to work areas. This can be due to blocked stairways, roads,

.IN
walkways, insufficient man-lifts, or congested work sites.
8) Hazardous work area – This is caused when working in an area that is
classified as hazardous, requiring special safety equipment and clothing.
C
Restrictions may limit time and exposure of workers to the area, resulting in
less time on tools in the area.
N
9) Shorter daylight hours– Delays can cause work to be deferred from one
time period to the next, which may involve seasonal changes. Different
SY

regions and locations around the world also have different amounts of
daylight hours, depending on the season.
10) Weather and season changes – Performing work in a change season,
U

temperature zone, or climate change resulting in work performed in either

very hot or very cold weather, rain, snow, or other changes in temperature or
VT

climate can impact workers beyond normal conditions.

11) Shift work – This is when work is performed at any time other than the
first shift or the morning shift of a work day. Work on second and third shifts
are less efficient and may even be based on a shorter work period.
12) Tool and Equipment shortage – This is caused when there is
insufficient quantity or quality of tools and equipment to meet the needs
of the project.
13) Proximity of work - This is caused by working in remote areas,
proximity of tools, break areas, material lay down yard, or other resources
causing a loss of time for access.
14) Alternating, Staggered or Rotating work schedules – This usually results
in unusual or unique scheduled work periods designed to optimize the hours
worked, attract labour to remote sites, compete for labour resources and
minimize fatigue.

Department of Civil Engineering, MIT Mysore Page 28

Studied smart, not hard — thanks to [Link]

 Construction Management and Entrepreneurship (17CV61)

MODULE – 2

B) CONSTRUCTION EQUIPMENT
INTRODUCTION

Construction equipment is one of the very important resources of

modern-day construction, especially in infrastructure projects. Such
projects utilize equipments for most of works including earth moving
operations, aggregate production, concrete production and its
placement, and so on.
The choice of construction equipment defines the construction method, which in a
way leads to the determination of time and cost for the project. In order to select

.IN
the right equipment to perform a specific task at the least cost, it is essential to
know the features of construction equipment including its rate of production and
the associated cost to operate the equipment.
C
For a contractor, the decision to employ a particular type of equipment is
influenced by the contract he enters with the owners, the site condition and the
N
location of the project site.
SY

CLASSIFICATION OF CONSTRUCTION EQUIPMENTS

Construction equipments can be classified in the following ways:
1) Based on the function the equipment performs– For example, material
U

loading function, material transporting function, etc. In the functional classification,

equipments are grouped into
VT

(a) power units, (b) prime movers, which make it possible for the
equipment to operate, (c) tractors, (d) material-handling equipment and (e)
material-processing equipment.
2) Based on the operation for which the equipment is used – For example, (a)
equipments used for loosening and moving the materials found in their natural
state like excavators, earthmoving equipment, trenchers, conveying and hauling
equipments, (b) equipments used for processing the materials, such as aggregate,
concrete and asphalt production equipment, (c) equipments used for transporting
the processed materials and (d) equipments used for placing finished materials.
3) Based on the purpose – It can be general-purpose or special purpose
equipments. For example, in general-purpose equipment, we have earthwork
equipment, material-hoisting equipment, concreting equipment, etc., while in
special-purpose equipment, we have bridge- construction equipment, marine
equipment, pipe-laying equipment, and so on. Classification based on purpose
could be company-specific. For example, if a construction company is into tunnel
construction, the tunnel boring machine could be the general-purpose equipment
Department of Civil Engineering, MIT Mysore Page 29

Studied smart, not hard — thanks to [Link]

 Construction Management and Entrepreneurship (17CV61)

for this company, while it may be special-purpose equipment for a company that is
mostly into building construction.

FACTORS BEHIND THE SELECTION OF CONSTRUCTION EQUIPMENTS

1) Economic Considerations – The economic considerations such as owning cost
and operating cost of equipment are most important in selection of equipment.
Besides, the resale value, the
replacement cost of existing equipment and the salvage associated with
equipment are also important.
2) Company Specific – The selection of equipment for a company is governed by
its policy on ‘owning’ or ‘renting’. While emphasis on ‘owning’ may result in
purchase of equipment keeping in mind the future requirements of projects. The
emphasis on ‘renting’ may lead to putting too much focus on short-term benefits.

.IN
3) Site Specific – Site conditions – both ground and climatic conditions may affect
the equipment selection decision. For example: The soil and profile of a site may
dictate whether to go for crawler-mounted equipment or wheel-mounted
equipment. Similarly, climatic conditions such as the presence of strong winds,
C
visibility level and noise level may affect equipment selection decision.
N
4) Equipment Specific – Construction equipment come with high price tags while
it may be tempting to go for the equipment with low initial price. It is preferable to
SY

opt for standard equipments. Such equipments are manufactured in large numbers
by the manufacturers and their spare parts are easily available. Also, they can fetch
good salvage money at the time of their disposal. The size of the equipment
selected is also an important consideration.
U

5) Client and Project Specific – The client in a certain project may have certain
VT

preferences that are not in line with the construction companies preferred policies
as far as equipment procurement is concerned.
6) Manufacturer Specific – A construction company mat prefer to buy equipment
from the same manufacturer again and again and that too from a specific dealer.
This may be to bring uniformity in the equipment possessed by the company (or)
because the company is familiar with the working style of the manufacturer and
the dealer.
7) Labour Considerations – Shortage of manpower in some situation may lead to
the decision in favor of procuring equipment i.e., highly automated. Further, the
selection of equipment may be governed by the availability (or) non-availability of
trained manpower.

EQUIPMENT COSTS
1) OWNERSHIP COST– It is the cumulative results of those cash flows an owner
experiences whether (or) not the equipment is productively employed on the
project. Significant cash flows affecting the ownership cost are:

Department of Civil Engineering, MIT Mysore Page 30

Studied smart, not hard — thanks to [Link]

 Construction Management and Entrepreneurship (17CV61)

a) Purchase expenses – The cash outflow a firm experiences in acquiring

ownership of an equipment (or) used value is known as purchase
expense.
b) Salvage value – It is the cash inflow a firm receives if the equipment still
has a value at the time of its disposal.
c) Tax savings from depreciation – Under the tax laws, depreciating machine
loss in value with age will lessen the net cost of machine ownership. The
cost of savings afforded by tax depreciation is a result of shielding the
company from taxes.

d) Major repairs (or) overhauls – These are included in the ownership

because of they result in increased (or) extension of the equipment service
life. They can be considered as an investment in case of new equipment.
This cost should be added to the basis of equipments and then depreciation.

.IN
e) Property taxes – This refers to the ownership costs that are charged by the
government subdivisions commonly assessed by the percentage rate
applied against the book value of the equipment. It can range up to 4.5% of
the assessed equipment value.
C
f) Insurance – It includes the cost to cover fire, theft and damage to the
equipments. Annual rates can range from 1 – 3%. This cost can be on actual
N
payment premium paid to insurance companies by the equipment owners.
SY

g) Storage and Miscellaneous – Between jobs and during bad weather, a

company will

require storage facilities. Typical expenses include rental space, utilities and
U

wages for labours (or) watchman. This expenses range may be 5%.
VT

2) OPERATING COSTS – Typical expenses include,

a) Minor (or) Normal Maintenance cost
b) Repairs
c) Fuel
d) Lubricating oil
e) Replacement cost – wear & tear items

Problems
1) Determine the probable cost of ownership and operation of a power shovel with
the following details: Engine capacity = 150kW, Diesel operating factor = 0.5, C = 25
litres, t = time between oil changes = 100 hours, N = 5 years, No. of usage
hours/year = 2000, cost of equipment = Rs. 600000, Salvage value = 10% of P,
maintenance cost = 80% of depreciation cost, cost of fuel = Rs. 60/litre, cost of
lubricating oil = Rs. 200. Assume investment cost = 15% of average cost.

2) Following data refers to the down value. Calculate the cost of ownership and
Department of Civil Engineering, MIT Mysore Page 31

Studied smart, not hard — thanks to [Link]

 Construction Management and Entrepreneurship (17CV61)

operation on hourly basis: Purchase value = Rs. 900000, Salvage value = 10% of P,
Engine capacity = 60HP, operating factor of diesel engine = 0.6, C = 25 litres, t = 80
hours, N = 10 years, Hours usage/year = 2000, cost of fuel = Rs. 43/litre, cost of
lubricating oil = Rs. 180/litre, investment cost = 15% of average cost, maintenance
cost = 80% of depreciation cost.

ESTIMATION OF PRODUCTIVITY OF VARIOUS CONSTRUCTION

EQUIPMENTS
Earthwork Equipments
Description Purpose Application Remarks
For excavation below the Cutting of trenches, pits, Suitable for heavy
Back hoe
ground (lower elevation) etc., leveling and loading positive cutting
Suitable for heavy
For excavation above its For cutting and for
Shovel positive cutting in all

.IN
own track (or) wheel level loading
types of dry soil
For bulk excavation in For canals and pit Suitable for loose soils,
Dragline loose soils below its own excavation, cutting and marshy land and areas
track level
C
de-silting of ditches containing water
For deep confined cutting Consist of a
N
Clamshell in pits and trenches For shafts, pits and wells hydraulically controlled
bucket suspended from
SY

lifting arm
For moving earth up to a
U

distance of about 100m, Clearing and grubbing Can be crawler-

VT

shallow excavation and the pits, excavation of

Dozers mounted (or) wheel-
acting as a towing tractor surface earth and
and pusher to scraper maintaining roads mounted
machines
Comes in different
varieties such as
Used for larger works of smooth-wheeled
Roller For compaction of earth
highways, canals and rollers, vibratory
Compactor (or) other materials
airports rollers, pneumatic-
tyred rollers and sheep-
foot roller
For site stripping and Best suitable for haul Comes in different
leveling, loading, hauling distances varying varieties such as towed
Scraper and discharging over long between 150m and scrapers (or) two to
distances 900m three axle scrapers
Suitable for hauling on Comes in different
For horizontal softer subgrades, large varieties with front

Department of Civil Engineering, MIT Mysore Page 32

Studied smart, not hard — thanks to [Link]

 Construction Management and Entrepreneurship (17CV61)
transportation of capacity dumpers are tipping, side tipping
Dumper materials on and off sites used in mining (or) (or) elevated tipping
quarries arrangements
For spreading fill and fine
trimming the subgrade. Grading and finishing the
upper surface of earthen Graders usually operate
Grader Grader performs a follow
formation and in forward direction
up operation to scraping
embankment
(or) bulldozing

Equipment Suitability
The most important factor that determines the suitability of equipment for
earthwork is the soil (or) the earth itself. The type of earth moving equipment
required varies with the nature of the soil and task to be performed.
1) Excavating and lifting soft earth

.IN
a) Deep pit excavation – Clamshell and dragline
b) Shallow pit excavation – Back hoe
c) Ground level excavation – Power shovels
C
d) Shallow trenching – Back hoe (excavator)
e) Wet soil excavation – Dragline
N
2) Cutting over areas
a) Short hauls – Dozers
SY

b) Long hauls – Scrapers

3) Loading and transporting the excavated soil
a) For loading soil – loaders, power shovels, excavators
U

b) For transporting soil – tippers, dumpers, scrapers

VT

The main ground characteristics which influence the performance of equipment are,
1) Suitability of an equipment
2) Digging effort
3) Volume conversion
4) Equipment output

Digging Effort – It depends upon the nature of the soil. The typical soil factors
which determine comparative equipment efforts required in various types of soil
are as follows:

Nature of soil Digging effort Soil factor

Loam, sand, gravel Easy 1.0
Common earth
Medium 0.85
(ordinary soil)
Stiff clay, soft rock Hard 0.61

Department of Civil Engineering, MIT Mysore Page 33

Studied smart, not hard — thanks to [Link]

 Construction Management and Entrepreneurship (17CV61)

Volume Conversion – The volume of the soil in its place in natural state is referred
to as bank volume. When it is in loose state, it is called as loose volume and when it
is in compacted state, it is called compacted volume.

Nature of soil Bank Volume Loose Volume Compacted Volume

Common earth 1 1.25 0.90
Sand 1 1.12 0.95
Clay 1 1.27 0.90
Rock (blasted) 1 1.50 1.30

Problem
1) 250m3 of unexcavated earth is required to be hauled. The nature of the soil is

.IN
sand and clay. What will be its volume when it is excavated and ready for handling?
What will be its volume when it is compacted?
C
Equipment Output
N
a) Equipment Actual Production
Equipment Actual Production/hour = (Actual load/cycle) * (cycle/hour)
SY

Problem
U

1) For loads operated by a skilled person for bucket capacity 1.5m3 on a job
involves easy digging and moves the load of 1.5m3 of loose soil in 1 cycle. If each
VT

cycle time is 1.2 minutes, then determine actual production/hour.

b)Equipment planning output

Equipment output/hour for planning purpose can be calculated from the haul
volume/cycle and the number of cycles from the following formula:

Equipment hourly output =

Planned output/hour = Ideal output/hour * Correction factor * Performance efficiency
factor P = Q
*q*N*E*C
P = Q * q * 60 * E * C

where, P = Production/hour in m3/hour

Q = Ideal Output/cycle in loose soil under ideal
conditions in m3/hour q = Soil volume conversion

Department of Civil Engineering, MIT Mysore Page 34

Studied smart, not hard — thanks to [Link]

 Construction Management and Entrepreneurship (17CV61)

factor
N = No. of cycles/hour = 60

Cm = Cycle time in minutes

C = Correction factors for job condition
E = Job performance efficiency factor related to equipment
conditions and
operators’ skill

Performance Efficiency Factor

Assessed equipment
Performance
efficiency working
efficiency factor
(min/hr)
60 1.0

.IN
55 0.92
50 0.85
45 C 0.75
40 0.67

Correction Factor
N
1) Equipment Performance Comparison
SY

Equipment Factor multiplier

Power Shovel 1.0
Back Hoe 0.80
Dragline 0.75
U

Grab 0.40
VT

2) Soil Digging Factor

Digging effort Factor multiplier
Easy digging 1.0
Medium digging 0.85
Hard digging 0.67

3) Swing Factor
Angle of Swing 45° 60° 75° 90° 120° 150° 180°
Factor value 1.20 1.16 1.05 1.0 0.88 0.79 0.71

4) Load Casting Factor

Factor multiplier
Method of casting
Open area Restricted area
Side casting 1.0 0.80
Loading in vehicle 0.80 0.60

Department of Civil Engineering, MIT Mysore Page 35

Studied smart, not hard — thanks to [Link]

 Construction Management and Entrepreneurship (17CV61)

Problem
1) Estimate the hourly production in bulk volume in LCM of a back hoe with bucket
capacity of 0.96m3 that is employed on excavation of a foundation, which is 4m
deep in hard digging soil. The excavated earth is to be loaded in waiting dump
trucks, placed at a swing angle of 75°. The expected performance efficiency is 83%.

Dozer Planning Output

Bulldozers are versatile machines which is used for moving earth up to 100m,
moving and grubbing the sites, used for pushing scrapers, spreading soil to level
the surface, maintaining roads, etc.,
The ideal output is measured in bulk volume (loose soil) assuming a forward
dozing speed of 3km/hour, return speed of 6km/hour, manoeuvring time of 0.15

.IN
minutes, easy going on general level ground and dozing of materials using straight
S-blade.

Dozer output = Dozer ideal output * Correction factor * Performance factor (in
LCM)
C
N
Correction Factors
1) Blade Factor Multiplier
SY

Type of blade Blade Factor

S-blade 1.0
A-blade 0.75
1.25 (used only for
U

U-blade
loose soil)
VT

2) Transmission Factor – Take 80% of the ideal output if it is based on power shift
system.
3) Grade Factor
Nature of slope Effect on output (%)
Downhill working Increase 2.5 * grade (%)
Uphill working Decrease 2 * grade (%)
4) Soil Factor
Digging effort Soil Factor
Easy digging 1.0
Medium digging 0.85
Hard digging 0.67
5) Swell Factor
Type of soil Swell factor
Common earth 1.2
Sand & Gravel 1.1

Department of Civil Engineering, MIT Mysore Page 36

Studied smart, not hard — thanks to [Link]

 Construction Management and Entrepreneurship (17CV61)

Dry clay 1.3

Rock 1.5

The ideal output is stated in terms of bulk (or loose) volume excavated.
This output can be converted into bank volume by dividing the bulk
materials with the swell factor.

Problems
1) Determine the output of a bulldozer having 215HP engine, fitted with A-blade
rated capacity 4.40m3. The dozer is employed for excavating a hard clayey area
with average haulage of 50m on a ground with down slope of 10%. It has direct
drive transmission and its expected performance is 50 minutes per/hour.

Scraper Planning Output

.IN
Scraper is equipment that is commonly used for scraping, loading, hauling and
discharging. It also includes spreading large quantities of earth over long distances
for around 3 km and in layers of 15 cm to 30 cm depth. There are two main
categories of scrapers, namely,
C
a) Towed scrapers – They are best suited for medium distances up to 400 m.
N
It can operate in small areas and scrape in heavy soil areas.
b) Motorized scrapers – These include single engine scraper, double
SY

engine scraper and elevating scraper.

Scraper output/hour in LCM = Ideal output * Correction factor * Performance

U

factor
VT

Problems
1) The cycle time of a scraper is 6 minutes and a pusher to fill a scraper is 1.5
minutes. Calculate the number of scrapers, which a pusher can serve. Determine
the number of pushers to serve 10 scrapers.
2) A new motorized scraper, working under average conditions, is deployed
in spreading of excavated materials along a road alignment 1.5 km long using
the following data:
Scraper capacity = 16 23.7

Gross vehicle weight (empty) =

36 tonnes Maximum pay load =
34020 kg
Material density
= 1500 kg/m Job
efficiency = 50

Department of Civil Engineering, MIT Mysore Page 37

Studied smart, not hard — thanks to [Link]

 Construction Management and Entrepreneurship (17CV61)

min/hour Rated
power of engine
= 450 HP
Correction factor
= 0.91
Evaluate the output per hour after making adjustments for various factors affecting
production.

Hauling Equipment
The type of earth hauling equipment primarily depends on the haulage distance.
Type of Equipment Range of Haulage Distance (m)
1) Front-end loader truck Up to 80

.IN
2) Front-end loader (wheeled) Up to 200
3) Bulldozers Up to 80
4) Towed scrapers C 100 – 300
5) Elevating self-loading
100 – 1000
scrapers
N
6) Single engine scrapers (dozer
500 – 1500
SY

pusher arrangement)
7) Double engine scrapers
2000 and above
(push pull arrangement)
U

8) Tippers and dump trucks 800 and above

VT

Problems
1) Construction of a military helipad at an altitude of 2400 m involves 80000 m 3
(loose) of excavation area in soft soil. This task needs to be completed in 200
working hours. The company entrusted two dozers each with an output of 220
m3/hour under job conditions for task execution. It also holds wheel loaders and 22
m3 dump trucks. One loader can load in trucks of about 120 m3 of excavated soil per
hour. The dump truck cycle time for disposal of excavated materials is 35 minutes.
This includes 7 minutes of loading time by a loader team that consists of 2 loaders.
Estimate the output of front-end loader for loading excavated soil heap into dump
trucks and determine approximately the number of dozers, loaders, and dumpers
required to complete the task on time.

Production Output of Roller Compactors

The nature of soil dictates the type of compacting equipment required and the dry
density, which can be achieved. After the compacting equipment is selected, its

Department of Civil Engineering, MIT Mysore Page 38

Studied smart, not hard — thanks to [Link]

 Construction Management and Entrepreneurship (17CV61)

average output can be calculated as under: Compaction in m3/hour = where, W =

Width compacted per pass (m)
S = Compactor speed (m/hour)
T = Thickness of
compacted layer E
= Job efficiency
factor
C = Compacting factor
p = Number of passes required (varies from 4 to 6)

Water requirement in litres per hour = (Weight of loose soil to be compacted per hour in kg)
*
(optimum moisture content – natural moisture
content)
Problems

.IN
1) Water required per hour for compacting loose soil being spread by a shovel and
dozer at the rate of 230 m3/hour for a soil having density of 1.5 g/m3 and 8%
C
moisture content needing 12% optimum moisture content for compaction.

Grader Production Output

N
These are used to grade earthen road formations and embankments to their
SY

finished shape, within specifies limits by trimming the surface. The graders can
also be used for forming ditches, mixing and spreading soils and backfilling.
Distance in metres 50 100 200 500
U

Task efficiency 0.4 0.6 0.8 1.0

VT

Grader output in m2/hour =

where, W = Width graded per pass (m)

S = Average speed (m/hour)
E = Job efficiency factor
p = Number of passes required

(varies from 4 to 6) The grader speeds for various operations are:

Operation Speed (km/h)
Rough grading 4 – 10
Finishing (including grading) 6 – 15
Mixing 15 – 30
Spreading 6 – 15
Self-transporting 10 – 40

Department of Civil Engineering, MIT Mysore Page 39

Studied smart, not hard — thanks to [Link]

 Construction Management and Entrepreneurship (17CV61)

Problems
1) Calculate the time required to grade and finish 30km of road formation with
width equal to thrice the width of the motor grader, using six passes of the motor
grader with speed for each of the successive two passes as 6 km/h, 8 km/h and 10
km/h respectively. Assume machine efficiency based on operator’s skill, machine
characteristics and working conditions as 75%.

.IN
C
N
SY
U
VT

Department of Civil Engineering, MIT Mysore Page 40

Studied smart, not hard — thanks to [Link]

 Construction Management and Entrepreneurship (17CV61)

MODULE – 2
C) MATERIAL MANAGEMENT

The term ‘materials’ refers to the whole range of goods and services that are
purchased or otherwise procured from sources outside the organization and are
used to finish the given construction work.
A typical construction project requires a variety of materials. Materials in a project
are broadly classified under capital equipment, construction machineries, and
consumables. Some companies classify their materials under two broad categories
– capital items and revenue items. Plant and machinery, vehicles, office equipment,
land and buildings are placed under capital items, while small and heavy tools,

.IN
consumables, electrical items, construction materials are designated under revenue
items.
The importance of material management can be gauged from the fact that in any
C
typical building project, the share of the material costs is about 55 percent; labour
costs is about 25 percent; and POL (Petrol, Oil and Lubricants), overheads, tax
N
components and profits, about 5 percent each. Thus, material management
occupies an important place in construction management.
SY

OBJECTIVES OF MATERIAL MANAGEMENT

1) minimize material cost
2) procure and provide material of desired quality when required
U

3) reduce investment tied in inventories for use in other productive purposes

VT

and to develop high inventory turnover ratios

4) purchase, receive, transport and store material efficiently and to reduce the
related costs
5) cut down costs through simplification, standardization, value analysis,
import substitution, etc.,
6) modify paper-work procedure in order to minimize delays in procuring material
7) train personnel in the field of material management in order to
increase operational efficiency.
In general, material management aims to provide the right item of the right quality,
in the right quantity, at the right price, at the right place, and at the right time for
ensuring uninterrupted execution of works.

MATERIAL MANAGEMENT FUNCTIONS

The functions involved in material management are:
1) Materials Planning
 The site-planning engineer is responsible for this function.

Department of Civil Engineering, MIT Mysore Page 41

Studied smart, not hard — thanks to [Link]

 Construction Management and Entrepreneurship (17CV61)

Normally, purchase of any material is initiated by requisitioning

for it.
 It is a good idea to have some specific engineer approving the material
requisition.
 Materials schedule should be the basis for raising material requisitions.

 Materials planning involve identifying materials, estimating

quantities, defining specifications, forecasting requirements and
locating right sources for procurement.
2) Procurement
 Before procurement, the site-planning engineer along with the
materials engineer survey the local market and identify the items
that are to be procured locally and those that are to be procured from
the head office under centralized procurement system

.IN
 Local procurement should be kept minimum and, as far as possible,
limited to non- engineered items and consumables.
 Centralized procurement helps in dealing with regular suppliers
and, hence, better negotiated price. Also, low unit price due to large
volume of purchase.
C
3) Custody (Receiving, Warehousing and Issuing)
N
 The main documents used are – inward register, material receipt
note (MRN), delivery challan (DC), indent, dispatch covering note,
SY

outward register, loan register, repair register, and plant and

machinery movement register.
 The functions of warehousing include receipt, inspection, storage,
U

issue/ dispatch, materials accounting, valuation and insurance.

4) Material Accounting
VT

 The main purpose of materials accounting is monitoring inflow and

consumption of raw materials.
 Materials accounting involves materials stock accounting, material
issues and returns accounting, monthly stock taking of selected
materials and materials wastage analysis.
5) Transportation
 Construction materials used at project undergo considerable
movement right from their point of origin to storage point, to the
actual point of consumption.
 In some construction companies, materials are first received in
central stores, from where they are dispatched to the project stores
located at project sites and then finally to the workplace.
 The construction materials could be in the form of raw materials and
proper care should be taken while planning for transportation of raw
and semi-finished materials so as to prevent the low performance of
materials.

Department of Civil Engineering, MIT Mysore Page 42

Studied smart, not hard — thanks to [Link]

 Construction Management and Entrepreneurship (17CV61)

6) Inventory Monitoring and Control

 Inventory may be defined as ‘usable but idle resource’. If resource
is some physical and tangible object such as materials, then it is
generally termed as stock.
 It is very important to have a check on the inventory level.
 Inventory management is an extremely important problem
area in material management function.
 Inventory management is highly amenable to control and
there is substantial potential for cost reduction.

7) Materials Codification
 Codification is an important function in material management,
especially for construction companies where various items are used
all along the project duration.

.IN
 There are different systems of codification followed by construction
organizations – namely, numeric, alphanumeric and colour
codification.
 A proper system of material codification serves the
C
following purposes: proper identification of
N
items by all departments
concerned avoiding use of long
SY

description of items avoiding

duplicate stocks under different
descriptions material accounting and
control helps in mechanization of
U

records
8) Computerization
VT

 Computers are being used in the application of construction materials

management.
 Their applications are as follows:
forecasting the prices of materials
based on past data planning of use of
different materials
developing the
specification of materials
purchasing of materials
inventory control
9) Source Development (Vendor Development)
 Source development is a continuous activity.
 As a policy, for every major item, more than one source should be
identified.
 The vendor’s performance should be evaluated regularly and
only satisfactory vendors should be encouraged.

Department of Civil Engineering, MIT Mysore Page 43

Studied smart, not hard — thanks to [Link]

 Construction Management and Entrepreneurship (17CV61)

 It is not an easy task to manage a large number of vendors.

 It is also necessary to develop a long-term relationship with the vendors.
10) Disposal
 Every year, old and used items that are not economical to use
have to be disposed off in a planned way.
 For this, the quantity and quality of materials to be disposed off should be
assessed.
 The reusable items from the scrap can be retained for further use.
 The remaining scrap is disposed off either by selling it to some scrap
dealer or through the process of floating enquiry, collecting
quotation and awarding to the highest bidder.

INVENTORY MANAGEMENT
The problem of inventory management is of maintaining an adequate supply of

.IN
something to meet an expected demand pattern for a given financial investment.
This could be raw materials, work in progress, finished products, or spares and
other indirect materials. Inventory is one of the indicators of management
C
effectiveness on the materials management front. Inventory turnover ratio (annual
ratio) is an index of business performance.
N
Inventory management deals with the determination of optimal policies and procedures
for procurement of commodities.
SY

Inventory – Related Cost

Inventory – related cost has the following components:
U

1) Cost of carrying inventories (Holding Cost)

2) Cost of incurring shortages (Stock-out Cost)
VT

3) Cost of replenishing inventories (Ordering Cost)

1) Cost of Carrying Inventories (Holding Cost)
 This is expressed as Rs./item held in stock/unit time.
 This is the opportunity cost of blocking material in the non-productive form as
inventories.
 It comprises of cost of blocking capital (interest rate), cost of insurances,
storage cost and cost due to wastages, etc.
 For example, if the fraction of carrying charge is 20 percent per year and a
material worth Rs. 1000 is kept in inventory for one year, the unit carrying
cost will be Rs. 200/year.
 For perishable items, the carrying cost will be higher.
2) Cost of Incurring Shortages (Stock-Out Cost)
 It is the opportunity cost of not having an item in stock when one is
demanded. This is generally expressed in Rs./order.
 It may be due to lost sales or backlogging.

Department of Civil Engineering, MIT Mysore Page 44

Studied smart, not hard — thanks to [Link]

 Construction Management and Entrepreneurship (17CV61)

 In lost sales, the order is lost.

 In backlogging (or back – ordering), the order is not lost but is backlogged,
to be cleared as soon as the item is available on the stock.
3) Cost of Replenishing Inventories (Ordering Cost)
 This the amount of money and efforts expended in procurement or acquisition of
stock.
 It is generally called ordering cost. It is expressed in Rs./order.
 This cost is usually assumed to be independent of the quantity ordered,
because the fixed – cost component is generally more significant than the
variable component.
Functions of inventory
1) Demand and lead-time uncertainties necessitate building safety stock
(buffer stock) so as to enable various sub-systems to operate somewhat in

.IN
a decoupled manner.
2) Time lag in deliveries also necessitates building of inventories.
3) Cycle stocks may be maintained to get the economies of scale so that total
C
system cost due to ordering, carrying inventory and backlogging is
minimized.
N
4) When the demand is seasonal, it may become economical to build inventory
during periods of low demand to ease the strain of peak period demand.
SY

5) Stocks may build up as pipeline inventory or work-in-progress inventory

due to finiteness of production and transportation rates.

Inventory Policies
U

The common inventory policies are:

VT

a) Lot size reorder point policy

b) Fixed order interval scheduling policy
c) Optional replenishment policy
d) Two-bin system
Some of the factors affecting the choice of an inventory policy are – the nature of
the problem; the usage value of an item; and situational parameters.
a) LOT SIZE REORDER POINT POLICY
 The inventory status is continuously reviewed and as soon as the inventory
level falls to a prescribed value called ‘reorder point’, a fresh replenishment
order of fixed quantity known as EOQ is placed.
 This is one of the classical types of inventory policies.
 Figure shows the typical stock balance under this type of inventory policy.
The solid line in this figure represents the actual inventory held with a finite
lead time, while the broken line shows the ideal situation if no lead time
existed.

Department of Civil Engineering, MIT Mysore Page 45

Studied smart, not hard — thanks to [Link]

 Construction Management and Entrepreneurship (15CV61)

b) FIXED ORDER INTERVAL SCHEDULING POLICY

 The time between the consecutive replenishment orders is constant.
 A maximum stock level (S) is prescribed and the inventory status is
reviewed periodically with a fixed interval (T).
 At each review, an order of size O is placed, which takes the stock on
hand plus an order equal to the maximum stock level.
 The order quantity should vary from period to period.
 In this policy, when the level of stock on hand is high at
review, a smaller size replenishment order is placed.

c) OPTIONAL REPLENISHMENT POLICY

 This policy is also known as (s,S) policy.

.IN
 The status of stock is periodically reviewed and maximum stock level
(S) and minimum stock level (s) are prescribed.
 At the time of review, if the stock on hand is less than or equal to ‘s’, an
C
order of size Q is placed so that stock on hand plus the order equals the
maximum stock level ‘S’.
N
 If the stock on hand at review is higher than ‘s’, no order is placed and
the situation is reviewed at the next review period.
SY

d) TWO-BIN SYSTEM
 This system is simple to operate and easy to understand.
U

 There are two bins kept full of items and the item from the first bin is used first.
 The moment the first bin is exhausted, an order is placed for items and the
VT

second bin acts as buffer or safety stock.

Selective Inventory Control

Inventory control has to be exercised selectively. Depending upon the value of
criticality and usage frequency of an item, we may have to decide on an appropriate
type of inventory policy. Selective inventory control, thus, plays a crucial role so
that we can apply our limited control efforts more judiciously to the more
significant group of items. The table below shows some of the ways to group the
items based on the value, criticality and usage frequency.

Department of Civil Engineering, MIT Mysore Page 46

Studied smart, not hard — thanks to [Link]
 Construction Management and Entrepreneurship (15CV61)

Name of the
Expansion Basis of classification Remarks
policy
It is based on the criticality of Classification depends on the
Vital, essential and
VED the item, which are classified consequences of material
desirable
in 3 categories. stock-out when demanded.
It is based on the
Fast. slow and It is helpful in controlling
FSN consumption rate of the
normal obsolescence.
inventory.
It is mainly used to control
High, medium and It is based on unit price of
HML the inventory of purchased
low the material.
material.
Value of balance It is used for classifying Its main use in review of
XYZ
stocks very high materials in storage. inventory.

.IN
It is useful in lead-time
Scarce, difficult and It is based on the level of analysis and decision related
SDE easy to obtain difficulty in the procurement
to the procurement of
of inventory.
purchasing strategies.
Government,
C It is useful for decision
GOLF ordinary, local, It is based on the inventory. related to the procurement
N
foreign strategy.
High , medium and It is based on the prices of It is useful for delegating the
HML
SY

low price material. purchasing responsibilities.

ABC ANALYSIS
 This is based on Pareto’s Law, which says that in any large group there are
‘significant few’ and ‘insignificant many’.
U

 For example, only 20 percent of the items may be accounting for 80 percent
VT

of the total material cost procured by a construction organization. Here, the

20 percent constitute the ‘significant few’ that require utmost attention.
To prepare an ABC-type curve, we may follow a simple procedure:
1) Different materials required for the project are identified and their
estimated quantities are worked out. The quantity estimate could be on the
basis of either annual consumption or the project’s total requirement.
2) The unit rates of materials are estimated.

3) The usage values for each of the materials are obtained by multiplying the
estimated quantities and their unit rates. These values are converted into
percentage of total annual usage cost or total project cost.
4) The percentage usage cost for each of the materials is arranged in the
descending order of their ranking, i.e., highest to lowest usage value. The
cumulative percentage usage value is also calculated.
5) A curve as below is plotted, and the points on the curve at which there are
perceptible sudden changes of slopes are identified. In the absence of such
sharp points, cut-off points corresponding to the 10 percent and the 20

Department of Civil Engineering, MIT Mysore Page 47

Studied smart, not hard — thanks to [Link]
 Construction Management and Entrepreneurship (15CV61)

percent or so are marked as general indicator of A, B, and C type of

materials.

6) According to an empirical approach, ‘A’ class items account for about 70

percent of the usage value, ‘B’ class items for about 20 percent of the usage
value, and ‘C’ class items for about 10 percent of the usage value. In terms of
numbers, ‘A’ class items constitute about 10 percent of the total items, ‘B’
class items about 20 percent of total items, and ‘C’ class items about 70
percent of total items.

Item type ‘A’ – The salient features are:

 accurate forecast of quantities needed
 involvement of senior level for purchasing
 ordering is on requirement basis

.IN
 enquiries for procurement need to be sent to a large number of suppliers
 monitoring on weekly basis
 low safety stock is needed C
Item type ‘B’ – The salient features is:
 approximate forecast of quantities needed
N
 requires involvement of middle level for purchasing
 ordering is on EOQ basis
SY

 enquiries for procurement need to be sent to three to five reliable suppliers

 monitoring on monthly basis
 moderate safety stock is needed
U

Item type ‘C’ – The salient features are:

 no need of forecasting i.e., even rough quantity estimate is sufficient
VT

 junior-level staff is authorized to order purchase

 bulk ordering is preferred
 quotations from two or three reliable suppliers are sufficient
 monitoring can be done on a quarterly basis
 adequate safety stock can be maintained

ECONOMIC ORDER QUANTITY (EOQ)

The EOQ model provides answer on how much to order. The figure shows the
behaviour of EOQ model.

The reorder point R and the quantity to be ordered Q shown in the figure, as in
the lead time L. The ordered quantity derived from this model is known as
Economic Order Quantity (EOQ).

It is usually less expensive to purchase (and transport) or produce a bunch of

material at once than to order it in small quantities. If orders for large quantities
are specified, there will be fewer orders placed. For purchasing, this means that

Department of Civil Engineering, MIT Mysore Page 48

Studied smart, not hard — thanks to [Link]
 Construction Management and Entrepreneurship (15CV61)

quantity discounts and transportation efficiencies may be realized. The other side
of the coin, however, is that larger lot sizes result in more inventory, and inventory
is expensive to hold. EOQ model attempts to specify a balance between these
opposing costs. This aspect is shown graphically below, where it is clear that there
is a decrease in cost associated with increase in order quantity, while there is
increase in cost with increase of inventory.

Total Cost, TC = Ordering cost + Carrying cost … (1)

The following notations are used to develop the EOQ model:

D = Demand
rate;
unit/year A =
Ordering
cost;

.IN
Rs/order C =
Unit cost;
Rs/unit of
item
C
I = Inventory-carrying charges per year
N
H = Annual cost of carrying
inventory/unit item Q = Order
SY

quantity; number of units per lot

Average inventory = 0+ 2= 2(Since demand is at uniform rate)
U

Problems
VT

1) A construction material trading company receives total of 200 tons as annual

demand for steel reinforcement. The annual cost of carrying per unit ton of
reinforcement is Rs. 2000 and cost to place an order is Rs. 25000. What is the
economic order quantity?

2) A construction company purchases 10000 bags of cement annually. Each bag of

cement cost is Rs. 200 and the cost incurred in procuring each lot is Rs. 100. The
cost of carrying is 25%. What is the most economic order quantity? What is the
average inventory level?

3) For the data in Problem (2), if the lead time for procuring cement is 2
weeks, determine the reorder point.

4) A shop dealing in construction goods has 7 different items in its inventory. The
average number of units of each of these items held in the store along with their
unit cost is given in the table below. The shopkeeper has decided to employ ABC
inventory system. Classify the items in A, B, and C categories.

Department of Civil Engineering, MIT Mysore Page 49

Studied smart, not hard — thanks to [Link]
 Construction Management and Entrepreneurship (15CV61)

Items Average number of units Average cost/unit in inventory (Rs)

1 10000 121.50
2 10000 100.00
3 24000 14.50
4 16000 19.75
5 60000 3.10
6 50000 2.45
7 30000 0.50

5) A construction company stores various items as in the table below, in the

central stores. The average annual consumption and cost per unit of items stored
are given. Classify the items using ABC analysis.

Name of the item Average annual consumption (No.) Average cost/unit (Rs)
a 5000 45.00

.IN
b 1000 90.00
c 2000 225.00
d 4000 11.25
e 50 300.00
C
f 6000 62.50
g 2000 67.50
N
h 4000 18.75
i 50 375.00
SY

j 250 105.00
k 200 187.50
l 50 150.00
U
VT

Department of Civil Engineering, MIT Mysore Page 50

Studied smart, not hard — thanks to [Link]