1. 4/21/2017
Evaluation Of Performance Measures For Materials Management Process In Industrial Construction Projects Term Project for CEM 520 Instructor: Dr. Sadi A.Assaf Prepared & Presented By: Ali Al-Qureisha Mukhtar Bello Yaser Fallatah

2. Outline Introduction Objectives Research Methodology
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Outline
Outline
Introduction
Objectives
Research Methodology
Questionnaire Design
Research and data Analysis
Conclusions
Recommendations

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Outline
Introduction
Introduction
Materials management is an important element in project management. It is the system of planning and controlling all of the efforts necessary to ensure that the correct quality and quantity of materials and equipment are properly specified in a timely manner, obtained at a reasonable cost, and most importantly, are available at the point of use when required.
Studies indicated that materials constitute about 60% of the total project cost, and control 80% of the project schedule . Thus, efficient management of materials can result in substantial savings in project cost and time.
For effectively managing and controlling materials, the performance of materials management should be measured. Research has been done in the past by Plemmons [7] and Al-Darweesh [1] about the effectiveness of performance measures in materials management

4. 4/21/2017
Outline
Introduction
Introduction (Cont.)
Plemmons developed a list of 35 performance measures for use in industrial construction projects and proposed a model for benchmarking the materials management process in industrial construction.
The Plemmon's performance list was used in this study to assess its usability, importance, and practicality of implementation in industrial construction projects of SABIC and Saudi ARAMCO companies in the Eastern Province of Saudi Arabia.

5. Objectives The main objectives of this study are:
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Outline
Introduction
Objectives
Objectives
The main objectives of this study are:
To determine the performance measures use in materials management in industrial construction projects in the Eastern Province of Saudi Arabia.
To determine the importance of the performance measures in assessing the effectiveness of the materials management process.
To determine the practicality of implementation of the performance measures in industrial construction projects in Eastern Province of Saudi Arabia.

6. Research methodology The research methodology included:
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Outline
Introduction
Objectives
Research Methodology
Research methodology
The research methodology included:
Extensive literature review to find past and currently used performance
measures in industrial construction projects.
Developing a questionnaire based on the literature review.
Conducting interviews with materials management personnel in SABIC
and Saudi ARAMCO to determine the performance measures being
used in Saudi Arabia. The personnel were selected based on their
experience in this field.

7. Research methodology (Cont..)
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Outline
Introduction
Objectives
Research Methodology
Research methodology (Cont..)
Based on the literature review, the Plemmons’ performance measures list was adopted in this study. This table shows these performance measures classified according to their attributes

8. Research methodology (Cont..)
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Outline
Introduction
Objectives
Research Methodology
Research methodology (Cont..)
Plemmons’ Performance Measures
Attributes No
Performance Measure
Accuracy
Quality
Quantity
Timeliness
Cost
Availability 1
Materials receipt problems x 2
Materials receipt problems -internal 3
Warehouse inventory accuracy 4
Piping spool rework 5
Jobsite rejection of tagged equipment 6
Home office requisition ratio 7
Home office PO ratio 8
Average line items per release 9
Commitment home office 10
Commitment field 11
EDI purchase 12
Sole source purchase 13
Minority suppliers 14
Procurement lead -time 15
BEC lead time 16
PO to materials receipt duration 17
Material receiving processing time

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Outline
Introduction
Objectives
Research Methodology No
Performance Measure
Accuracy
Quality
Quantity
Timeliness
Cost
Availability 18
Commodity vendor timeliness x 19
Commodity timeliness 20
Materials withdrawal request 21
Materials withdrawal request (MWR) processing time 22
Average man hour per MTO 23
Average man hour per PO 24
Freight cost percent 25
Express deliveries percent 26
Construction time lost 27
Payment discounts 28
Electronic funds transfer payments 29
Release value breakdown 30
Min/Max release activity 31
Warehouse safety incident rate 32
Total surplus 33
Material availability 34
stock out analysis 35
Backorders

10. 4/21/2017
Outline
Introduction
Objectives
Research Method.
Questionnaire
Questionnaire design
The questionnaire was designed to evaluate the respondents’ level of experience and to obtain information regarding the performance measures’ usability, importance, and practicality of implementation.
The questionnaire consists of three parts; introductory section explaining the performance measures, a profile sheet for the respondent, and the questions. It was sent to the respondents prior to the interview so that they have a general idea about the 35 performance measures.
Before the respondents start answering the questions they were requested to fill the profile sheet. They were to specify their years of experience in construction industry and material management and the classification of the project as government or private.
Expertise is a task resides only within subcontractor actually performing the task.
BCs can be expected to have moderate level of task expertise.
Most A/Es have less construction task expertise than GCs. They spend considerable less time on construction job site. They may be able to analyze one portion of certain construction tasks such as designing scaffolding.

11. Questionnaire design (Cont..)
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Outline
Introduction
Objectives
Research Method.
Questionnaire
Questionnaire design (Cont..)
The questionnaire consists of 5 columns; the first and second columns are the serial number and the name of the performance measure respectively. The other three columns are the answers of the respondents about the usability of the measure, its importance and its practicality, respectively.
The respondents were asked about the usability of a performance measure with a "yes" or "no" option. If the answer is yes then they were to answer about its importance and practicality of implementation.
The importance and practicality of implementation of the performance measures were measured on 5 points scale ranging from 5 “extremely important” to 1 “not important”. The practicality had the same scale ranging from 5 “extremely practical” to 1 “not practical”.

12. Past/Current (yes/no)
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Outline
Introduction
Objectives
Research Method.
Questionnaire
Questionnaire design (Cont..)
No.
Measure Description
Used
Past/Current (yes/no)
Importance *
Practicality ** 1
Materials receipt problems 2
Materials receipt problems -internal 3
Warehouse inventory accuracy 4
Piping spool rework 5
Jobsite rejection of tagged equipment 6
Home office requisition ratio 7
Home office PO ratio 8
Average line items per release 9
Commitment home office 10
Commitment field …
….. 35
Backorders
Extremely important -5; Very important -4; Important -3; Somewhat important-2; Not important -1
Extremely practical -5; Very practical -4; Practical -3; Somewhat practical -2; Not practical -1

13. Past or Current use (%) response
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Outline
Introduction
Objectives
Research Method.
Questionnaire
Results
Results and data analysis
Performance measures usage rating
No.
Performance Measure
Number of Responses
Past or Current use (%) response 1
Materials receipt problems 15 80 2
Materials receipt problems-internal 13 3
Warehouse inventory accuracy 14 76 4
Piping spool rework 8 36 5
Jobsite rejection of tagged equipment 72 6
Home office requisition ratio 12 52 7
Home office PO ratio 11 50
Average line items per release 58 9
Commitment home office 60 10
Commitment field
EDI purchase 68
Sole source purchase
Minority suppliers 37
Procurement lead time 88
BEC lead time 74 16
PO to materials receipt duration 78 17
Material receiving processing time
The first objective of the study was to determine the performance measures used in the past or currently being used in Saudi Arabia.
The question says “ Is measure X used by our organization in industrial construction in Saudi Arabian environment.
This table shows percent responses for the past or present use of the measures.
It shows that all the 35 measures were used or are currently in use in Saudi Arabia.

14. Past or Current use (%) response
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Outline
Introduction
Objectives
Research Method.
Questionnaire
Results
No.
Performance Measure
Number of Responses
Past or Current use (%) response 18
Commodity vendor timeliness 15 76 19
Commodity timeliness 13 66 20
Materials withdrawal request 14 64 21
Materials withdrawal request (MWR) processing time 62 22
Average man hour per MTO 12 52 23
Average man hour per PO 54 24
Freight cost percent 78 25
Express deliveries percent 80 26
Construction time lost 86 27
Payment discounts 28
Electronic funds transfer payments 56 29
Release value breakdown 11 48 30
Min/Max release activity 31
Warehouse safety incident rate 32
Total surplus 70 33
Material availability 92 34
stock out analysis 35
Backorders 68

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Outline
Introduction
Objectives
Research Method.
Questionnaire
Results
The performance measures were categorized into four different groups with a range of 25% for each category. The ranges are as follows:
Rare use: 0-25%
Low use: 26-50%
Moderate use: 51-75%
High use: %
According to the responses, none of the performance measures falls under the rare use category. The performance measures identified as being highly used are; materials receipt problem, materials receipt problem-internal, warehouse inventory accuracy, procurement lead-time, PO to materials receipt duration, commodity vendor timeliness, fright cost percent, express deliveries percent, construction time lost, material availability, and stock out analysis.

16. Past or Current use (%) response
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Outline
Introduction
Objectives
Research Method.
Questionnaire
Results
Results and data analysis
Performance measures usage rating
No.
Performance Measure
Number of Responses
Past or Current use (%) response 1
Materials receipt problems 15 80 2
Materials receipt problems-internal 13 3
Warehouse inventory accuracy 14 76 4
Piping spool rework 8 36 5
Jobsite rejection of tagged equipment 72 6
Home office requisition ratio 12 52 7
Home office PO ratio 11 50
Average line items per release 58 9
Commitment home office 60 10
Commitment field
EDI purchase 68
Sole source purchase
Minority suppliers 37
Procurement lead time 88
BEC lead time 74 16
PO to materials receipt duration 78 17
Material receiving processing time
Rare use: 0-25%
Low use: 26-50%
Moderate use: 51-75%
High use: %

17. Past or Current use (%) response
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Outline
Introduction
Objectives
Research Method.
Questionnaire
Results
No.
Performance Measure
Number of Responses
Past or Current use (%) response 18
Commodity vendor timeliness 15 76 19
Commodity timeliness 13 66 20
Materials withdrawal request 14 64 21
Materials withdrawal request (MWR) processing time 62 22
Average man hour per MTO 12 52 23
Average man hour per PO 54 24
Freight cost percent 78 25
Express deliveries percent 80 26
Construction time lost 86 27
Payment discounts 28
Electronic funds transfer payments 56 29
Release value breakdown 11 48 30
Min/Max release activity 31
Warehouse safety incident rate 32
Total surplus 70 33
Material availability 92 34
stock out analysis 35
Backorders 68

18. Importance of the Performance Measures
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Outline
Introduction
Objectives
Research Method.
Questionnaire
Results
Importance of the Performance Measures
The performance measures importance was calculated using an importance index. The importance levels of the performance measures were classified into five categories ranging from 5 (extremely important) to 1 (not important):
Extremely important : the assigned weight of 5
Very important : the assigned weight of 4
Important : the assigned weight of 3
Somewhat important : the assigned weight of 2
Not important : the assigned weight of 1
Importance index of a measure = (X1*5 + X2*4 + X3*3 + X4*2 + X5*1) / N
Where X1, X2, X3, X4, X5 represent the frequency of responses in a particular rating.
5, 4, 2, 1 represent the numerical score of the respective rating. N is the number of responses.

19. 1. Extremely important : 4.25-5.0 2. Important : 3.25-4.24
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Introduction
Objectives
Research Method.
Questionnaire
Results
Based on the index score for each of the performance measures, they were categorized into four different groups with a range of 1:
1. Extremely important :
2. Important :
3. Moderately important :
4. Somewhat important :
The calculated importance indices for all the performance measures are shown in the following table, in descending order of importance.

20. Performance measures importance rating (Cont..)
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Outline
Introduction
Objectives
Research Method.
Questionnaire
Results
Performance measures importance rating (Cont..)
No.
Performance Measure
Number of Responses
Importance (1-5) 1
Material availability 15
4.60 2
Procurement lead time
4.47 3
Construction time lost 13
4.38 4
Express deliveries percent
4.07 5
Materials receipt problems-internal
4.00 6
Materials receipt problems 7
stock out analysis 8
PO to materials receipt duration 14
3.93 9
Freight cost percent 10
Warehouse inventory accuracy
3.87 11
Commodity vendor timeliness 12
BEC lead time
3.71
Jobsite rejection of tagged equipment
3.60
Material receiving processing time
Total surplus
3.57 16
EDI purchase
3.47 17
Backorders
3.40

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Outline
Introduction
Objectives
Research Method.
Questionnaire
Results
No.
Performance Measure
Number of Responses
Importance (1-5) 18
Commodity timeliness 13
3.36 19
Materials withdrawal request 14
3.20 20
Payment discounts 21
Warehouse safety incident rate 15
3.14 22
Materials withdrawal request (MWR) processing time
3.13 23
Sole source purchase 12
3.08 24
Commitment home office
3.07 25
Average line items per release
2.94 26
Commitment field
2.93 27
Electronic funds transfer payments
2.87 28
Average man hour per PO
2.77 29
Min/Max release activity
2.71 30
Average man hour per MTO
2.64 31
Home office requisition ratio
2.60 32
Home office PO ratio 11
2.50 33
Release value breakdown
2.42 34
Minority suppliers 10
1.86 35
Piping spool rework 53
1.82

22. Practicality of implementation of the Performance Measures
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Outline
Introduction
Objectives
Research Method.
Questionnaire
Results
Practicality of implementation of the Performance Measures
The same type of analysis that was used in determining the importance index was used to determine the practicality index. Based on the index score for each measure, the measures were categorized into four different groups with a range of 1:
Extremely practical : 4.25 – 5.00
Practical : 3.25 – 4.24
Moderately practical : 2.25 – 3.24
Somewhat practical : 1.25 – 2.24
Following table shows the results of the practicality indices of the performance measures.

23. Practicality of the performance measures rating (Cont..)
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Outline
Introduction
Objectives
Research Method.
Questionnaire
Results
Practicality of the performance measures rating (Cont..)
No.
Performance Measure
Number of Responses
Practicality (1-5) 1
Material availability 15
4.33 2
Construction time lost 13
4.31 3
Procurement lead time
4.20 4
Materials receipt problems
4.14 5
Materials receipt problems-internal
4.08 6
stock out analysis
4.00 7
Freight cost percent
3.80 8
PO to materials receipt duration 14
3.73 9
Warehouse inventory accuracy
3.60 10
Express deliveries percent 11
BEC lead time
3.57 12
Jobsite rejection of tagged equipment
3.53
Total surplus
3.50
Commodity vendor timeliness
3.47
Material receiving processing time
3.40 16
Backorders
3.33 17
Sole source purchase
3.31
Material availability and construction time lost have been found to be extremely practical in terms of implementation while piping spool rework, minority suppliers, and release value breakdown are somewhat practical.

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Outline
Introduction
Objectives
Research Method.
Questionnaire
Results
No.
Performance Measure
Number of Responses
Practicality (1-5) 18
Commodity timeliness 13
3.14 19
Warehouse safety incident rate 15
3.07 20
EDI purchase 21
Materials withdrawal request (MWR) processing time 14 22
Payment discounts
3.00 23
Average line items per release
2.93 24
Materials withdrawal request 25
Commitment home office
2.67 26
Min/Max release activity
2.64 27
Average man hour per PO 12
2.62 28
Home office requisition ratio
2.60 29
Commitment field 30
Electronic funds transfer payments 31
Home office PO ratio 11
2.50 32
Average man hour per MTO
2.46 33
Release value breakdown
2.08 34
Minority suppliers 10
1.86 35
Piping spool rework 8
1.82

25. Practicality of implementation of the Performance Measures
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Introduction
Objectives
Research Method.
Questionnaire
Results
Practicality of implementation of the Performance Measures
Material availability and construction time lost have been found to be extremely practical in terms of implementation

26. Relationship between Importance and Practicality of implementation
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Introduction
Objectives
Research Method.
Questionnaire
Results
Relationship between Importance and Practicality of implementation
The relationship between practicality and importance was studied using Pearson’s correlation coefficient which helps in finding the correlation between average responses to the importance and practicality for the 35 performance measures shown in Table 6. SPSS statistical software was used to calculate the correlation coefficient.
Pearson’s correlation coefficient,
Where X and Y are the sample average values for Importance and Practicality, respectively. X’ and Y’ are the mean values for each response value of Importance and Practicality.
The resulting correlation coefficient r = indicates a very strong positive correlation between the two sets of ranks under importance and practicality criteria. This indicates that there is a wide use of those performance measures which are considered highly important.

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Outline
Introduction
Objectives
Research Method.
Questionnaire
Results
The top five performance measures are: material availability, procurement lead time, construction time lost, express deliveries percent, and materials receipt problems-internal.
These measures represent the attributes; Accuracy, Timeliness, Availability, and Cost.

28. Average Response to Importance Average Response to Practicality
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Introduction
Objectives
Research Method.
Questionnaire
Results
Pearson's correlation
No.
Performance Measure
Average Response to Importance
Average Response to Practicality 1
Material availability
4.60
4.33 2
Procurement lead time
4.47
4.20 3
Construction time lost
4.38
4.31 4
Express deliveries percent
4.07
3.60 5
Materials receipt problems-internal
4.00
4.14 6
Materials receipt problems
4.08 7
stock out analysis 8
PO to materials receipt duration
3.93
3.80 9
Freight cost percent
3.73 10
Warehouse inventory accuracy
3.87 11
Commodity vendor timeliness
3.47 12
BEC lead time
3.71
3.57 13
Jobsite rejection of tagged equipment
3.53 14
Material receiving processing time
3.40 15
Total surplus
3.50 16
EDI purchase
3.07 17
Backorders
3.33 18
Commodity timeliness
3.36
3.14

29. Average Response to Importance Average Response to Practicality
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Outline
Introduction
Objectives
Research Method.
Questionnaire
Results
No.
Performance Measure
Average Response to Importance
Average Response to Practicality 19
Materials withdrawal request
3.20
3.00 20
Payment discounts
2.93 21
Warehouse safety incident rate
3.14
3.07 22
Materials withdrawal request (MWR) processing time
3.13 23
Sole source purchase
3.08
3.31 24
Commitment home office
2.67 25
Average line items per release
2.94 26
Commitment field
2.60 27
Electronic funds transfer payments
2.87 28
Average man hour per PO
2.77
2.62 29
Min/Max release activity
2.71
2.64 30
Average man hour per MTO
2.46 31
Home office requisition ratio 32
Home office PO ratio
2.50 33
Release value breakdown
2.42
2.08 34
Minority suppliers
1.86 35
Piping spool rework
1.82

30. Conclusions 1- Past and presently used Measures
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Outline
Introduction
Objectives
Research Method.
Questionnaire
Results
Conclusions
Conclusions
1- Past and presently used Measures
Analyses showed that all the studied performance measures were used or are currently in use in materials management for industrial construction projects in the Eastern Province of Saudi Arabia.
The following performance measures were found under the category of high use;
material receipt problems, material receipt problem-internal, warehouse inventory accuracy, procurement lead-time, PO to materials receipt duration, commodity vendor timeliness, freight cost percent, express deliveries percent, construction time lost, material availability and stock out analysis.

31. 2- Importance of the Performance Measures
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Outline
Introduction
Objectives
Research Method.
Questionnaire
Results
Conclusions
2- Importance of the Performance Measures
Based on the index score for each of the performance measures, they were categorized into four different groups; extremely important, important, moderately important, and somewhat important. Three performance measures were found under the extremely important category; material availability, procurement lead-time, and construction time lost. While two of the performance measures; minority suppliers and piping spool rework were identified as being somewhat important.
3- Practicality of Performance Measures
Based on the index score for each of the performance measures, they were categorized into four different groups; extremely practical, practical, moderately practical, and somewhat practical. Two performance measures; material availability and construction time lost are extremely practical. Three performance measures; release value breakdown, minority suppliers, and piping spool rework have been identified as being somewhat practical to implement.

32. Recommendations Recommendations for the Industries
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Outline
Introduction
Objectives
Research Method.
Questionnaire
Results
Conclusions
Recommendation
Recommendations
Recommendations for the Industries
The industries should educate and train personnel on using the materials management performance measures and their influence on the projects.
The industries should use the materials management performance measures and benchmarks their projects with the performance measures.
Recommendation for future studies
A similar study should be carried out for other types of constructions, like building construction.
A study of the use of computerized materials management system currently in use in Saudi construction industry should be carried out.
A study of the application of materials management models, such as EQQ, MRP, and JIT in construction can be done.

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Thank You