On the logistics management of construction enterprises

The construction industry has unique industry characteristics such as huge project investment, long construction period, complex and changeable construction site, wide units involved in the project, and many people, which determines that while its scale is expanding rapidly, the management expenses of enterprises are also rising, and the marginal profit margin of the whole industry is getting smaller and smaller, and even some enterprises begin to decline in economic benefits. Here are some related materials I shared for your reference.

1. The origin and development of logistics

Logistics refers to the whole process of planning, implementing and managing raw materials, semi-finished products, finished products or related information from the place of origin of goods to the place of consumption of goods at the lowest cost.

the concept of "logistics" is different in different countries and institutions at different times, and the earliest literature on logistics activities is in Britain. In 1918, Lord Hamm of Uniliv, England, established "Instant Delivery Co., Ltd." with the purpose of delivering goods to wholesalers, retailers and users in a timely manner throughout the country. During World War II, the United States first adopted the word "logistics management" in its wartime supply of military X, and comprehensively managed the transportation, supply and stationing of military weapons. After World War II, the word "logistics" was borrowed by Americans into enterprise management and called "business logistics". Enterprise logistics refers to the comprehensive management of supply and marketing, transportation, storage and other activities of enterprises.

2. The proportion of logistics in construction enterprises

The characteristics and important position of material supply logistics in large-scale construction projects. Construction projects are investment and construction processes aimed at forming fixed assets. The materials consumed by engineering construction projects mainly include steel, cement, concrete, wood, brick and sand, etc. These materials are bulky and heavy, which require large-scale logistics facilities and occupy more space. Because the construction project has the characteristics of heterogeneity, timeliness and one-off, the product formation belongs to the single-piece production mode, so the logistics service provided for the construction project also has particularity, such as the instability of service quantity, the variability of service location and the flexibility of service mode. Large-scale engineering construction projects are affected by many and complicated factors, especially the economic and environmental factors, which are unpredictable, so it is difficult to accurately plan the material consumption, which requires strengthening the control of material supply during construction. The investment in engineering construction projects is generally relatively large, especially in large-scale engineering construction projects, which usually cost hundreds of millions of yuan or more. Generally speaking, the material cost accounts for 6% ~ 7% of the project cost, while the logistics cost accounts for about 17% of the material cost (calculated by steel and cement, the ratio of steel to cement is 1: 3). In other words, logistics costs account for about 11% of the project cost. Not only does the logistics cost occupy a high proportion in the cost of the project, but also the logistics efficiency will affect the amount of funds occupied by materials and the construction efficiency. Inefficient logistics activities, or excessive material inventory, wasting funds; Or insufficient inventory causes downtime. All these will increase the cost of engineering construction projects and even fail to complete the project construction on schedule. Therefore, strengthening the management of material supply in engineering construction projects is very important to reduce the cost of engineering projects by reducing material consumption and saving logistics costs in the process of material supply.

3. Logistics management of traditional construction enterprises

At present, logistics management of traditional construction enterprises mostly stays in manual management state, that is, when enterprises have logistics needs, they manually convey instructions to find someone to transport them. This backward management method will inevitably lead to low work efficiency, irregular management, high cost, poor real-time and dynamic, difficult to control and complicated working methods. Through the investigation and analysis of several engineering projects of Zhejiang Huzhou Construction Engineering Group Co., Ltd., it is found that there are mainly the following defects:

① Lack of modern management means, low interest rate of logistics management, even staying in the original manual operation stage, and no concept of e-commerce;

② There is a lack of scientific management of the components of the material supplier consortium, and short-term competition and vicious competition are more than cooperation;

③ Material procurement is a game process with asymmetric information, which is not intensive and has high procurement cost;

④ Material procurement is not closely related to the budget department, technical department and construction department, and lacks necessary information support, which is seriously out of touch with engineering practice;

⑤ The material inventory and site management are chaotic, resulting in the waste of resources and the increase of construction cost;

⑥ The project department is fragmented, and it is difficult to guarantee the quality of materials under the price competition.

therefore, it is very important to break the traditional logistics management mode of construction enterprises. With the continuous improvement of management and technology, various effective ways are constantly emerging. This paper puts forward some suggestions and ideas through practical investigation, analysis and comparison, which are used to establish its own logistics mechanism for the logistics management of traditional construction enterprises, so as to save resources in the production process, improve the competitiveness of enterprises and create more profits. This is not only beneficial to construction enterprises, but also helps the continuous development of logistics in the construction industry.

4. Status quo of logistics development of construction enterprises

4.1 Status quo of logistics development of construction enterprises

It has been 4 years since the concept of logistics was introduced into China, and it has penetrated into all walks of life. In recent years, with the encouragement and support of the state, logistics began to develop rapidly, which is called the "third profit source" of enterprise development. As one of the pillar industries of the national economy, the construction industry has also applied logistics management ideas to manage materials and production accordingly. However, the logistics of construction enterprises has its own characteristics, such as: compared with commercial logistics, the logistics of construction enterprises has the characteristics of "futures", and the price changes frequently. Because the release of cost information lags behind, especially the steel is affected by international raw materials, the price fluctuates greatly, which affects the cost; Material demand time is strict and must be delivered on time; There are many varieties and specifications of materials, and the requirements are strict; Most of the materials needed are large in quantity, heavy in weight and difficult to transport; The general cost of materials is very high, which takes up a lot of funds, and the capital turnover is difficult. Due to the existence of these characteristics, the logistics of construction enterprises is struggling in the development process, and many problems have appeared. Although advanced management technology has been used, the profits of enterprises have declined.

4.2 Problems existing in the logistics development of construction enterprises

① Paying attention to supply and neglecting management: At present, the construction period of construction enterprises in their whole construction is generally 2 or 3 years, so the demand for various materials in construction has time requirements, and the centralized supply is relatively short, which puts strict requirements on the supply department. Building materials are often varied, large in quantity and heavy in weight, and the only way to complete the task in time is to speed up the supply. Therefore, in order to supply in time, the supply department can only strengthen the planned budget and supply all kinds of materials needed for construction and production according to the goods, quality and deadline. While blindly paying attention to time, it ignores the management of supply, and does not fully consider the arrangement of materials, the choice of vehicles and the optimization of routes. Although this mode of supply meets the needs of production, it greatly increases the transportation cost and reduces the benefit of enterprises.

② The awareness of cost management is weak, and logistics, as the main component of construction cost, lacks an effective evaluation and assessment system. The awareness of logistics cost management is weak, and the focus of cost management in China's construction enterprises is still limited to the activity-based cost of the construction process, and insufficient attention is paid to the cost importance of material circulation. This directly leads to the lack of clear detailed subjects of logistics cost, and simply regards transportation, warehousing, loading and unloading as logistics cost items, which makes logistics cost unclear and makes managers unable to make correct decisions in logistics management. In addition, the logistics performance evaluation index of construction enterprises is too single, usually only one evaluation index is "material cost difference", and other links in logistics activities are not comprehensively evaluated. Relying solely on "material cost difference" can not fully reflect the performance of logistics responsible departments, and the pertinence is not strong. This indicator will often bring wrong judgment to the superior. As long as the material cost is reduced, the superior department will think that the enterprise logistics has improved accordingly. This has seriously hindered the improvement and development of enterprise logistics. Furthermore, logistics science is a management theory advocated only in recent years, and construction enterprises have not calculated the logistics cost separately, nor have they established a historical database. Therefore, it is impossible to compare the current logistics cost and provide accurate data for logistics cost planning.

③ The information level of material management is relatively low, and there is a lack of long-term and effective information communication between construction enterprises and suppliers, especially in construction in different places. At present, the informatization level of construction enterprises in China is still relatively low. Only a few construction enterprises have applied information systems to comprehensively manage enterprises, and most enterprises still stay in the way of manual registration and manual transmission. The information system is not perfect, which leads to the disjointed information within the enterprise, which makes it impossible to transmit information among warehouses, production departments and management departments, which directly affects the construction efficiency and increases the operating cost. At the same time, China has not established a sound logistics information network platform for construction enterprises, and there is no effective information communication between enterprises and between enterprises and suppliers, so it is difficult to carry out related cooperation and deployment of related materials. Especially in the information communication with suppliers, it is difficult for construction enterprises to establish a stable relationship with suppliers because of the short-term nature of construction projects. In the traditional procurement mode of construction industry, the relationship between suppliers and construction enterprises is often short-term and unstable, and the cooperation relationship is interrupted with the end of one procurement, and the contact ends when the project is completed. It takes a lot of time, energy and financial resources to re-select suppliers in the next purchase. The construction process of construction enterprises is often influenced by the owner, design, supervision, climate, geography and other factors, which leads to the change of construction process, so the demand for materials changes frequently, and suppliers can't know the situation in time by relying on traditional methods, and they still supply as planned, resulting in the accumulation and waste of materials.

④ Logistics activities are mainly self-service, and most construction enterprises are state-owned enterprises. Although private enterprises have been developing and expanding in recent years through restructuring, almost every enterprise has established its own "big and complete, small and complete" logistics system under the long-term planned economy system in the past. Logistics management focuses on self-service, and does not form a multi-angle and all-round open pattern. Construction enterprises have their own fleet, their own warehouses, and even their own raw material production bases. This situation has caused some problems in the project, such as excessive inventory of raw materials, slow turnover rate, high capital occupation and low utilization rate of storage and transportation facilities. At the same time, construction enterprises have not formed the logistics management characteristics of special materials to ensure reserves and ordinary materials to be supplied as needed. This "big and complete, small and complete" logistics model is an important reason for the rising engineering cost of construction enterprises.

5. establish and improve the logistics system of construction enterprises

from the above, we can see that logistics plays an important role in construction enterprises, so it is very important and necessary for construction enterprises to establish and improve the logistics system. The quality of material management directly affects the production, technology, finance and other business activities and economic benefits of construction enterprises. Around the enterprise development strategy, the modern production logistics management idea is introduced, the existing material management system of construction enterprises is re-integrated and planned according to the principles of modern logistics management concept, and the business process that meets the requirements of modern logistics management is established. By establishing and introducing modern logistics management ideas, correctly applying advanced management methods and technologies of social logistics, establishing and perfecting information technology, strengthening long-term cooperation with suppliers and paying attention to the improvement of comprehensive quality within enterprises, the problems existing in the material management of existing construction enterprises will be effectively solved, thus greatly controlling costs and enhancing the market competitiveness of enterprises.

5.1 Establishment of a reasonable logistics mechanism

Construction enterprises should first optimize the logistics management of construction enterprises, establish a reasonable logistics management mechanism, re-integrate the existing material management system of construction enterprises according to the principles of logistics management, plan and establish business processes, organizational structure, material procurement, processing and sorting, joint distribution and other systems that meet the requirements of logistics management, and transform the simple procurement and supply business into a comprehensive one facing the project department and the construction site. Use the logistics channel, advocate reasonable distribution, reduce the intermediate links of material circulation, reduce the material reserve on the construction site, and ensure the use efficiency of materials.

5.2 Construction enterprises should improve the level of warehousing information and establish a new logistics management model

Using modern management methods, ABC classified management of inventory materials, created an order model that conforms to the actual situation of the enterprise, issued a purchase plan according to the monthly construction plan and the existing inventory of the warehouse, and on this basis, increased the purchase batch, reduced the purchase batch, implemented inventory material quota management, and strived to reduce the purchase cost, storage cost and emergency cost of the enterprise. At the same time, to meet the needs of on-site engineering construction, clean up various small warehouses of secondary management or grass-roots units, with fast and accurate service, put an end to the phenomenon that the stock materials are transferred from big warehouse to small warehouses within the company, completely eradicate the existing conditions of small warehouses, design a reasonable logistics network diagram according to the material supply routes of each engineering project construction site, and establish and improve the logistics model of unified external mobilization and unified internal distribution of the company. Finally, Realize the direct supply of construction materials from the place of production to the place of use, reduce the transfer transition between middlemen and warehouses, strive to speed up the turnover of inventory materials, and form a material management model with the characteristics of construction enterprises.

5.3 Construction enterprises should establish a long-term and stable strategic partnership with suppliers

The types of materials needed for construction products are relatively simple, while the amount of materials of the same type is relatively large, so it is very beneficial for construction enterprises to establish a long-term and stable strategic partnership with suppliers, limit the number of suppliers and not change suppliers frequently. For example, by establishing a long-term partnership with suppliers, it is no longer necessary for both parties to repeatedly negotiate inquiry and quotation, which reduces the cost and time of contract negotiation and transaction costs.

5.4 Construction enterprises should make full use of the material management information system

The material management information system is composed of various functional subsystems, which mainly include price analysis system, contract management system, inventory management system, planned procurement system and quality tracking system. The establishment of material management information system can not only use computer to replace manual tedious transaction processing, improve management efficiency, but also complete information processing that is difficult to be completed manually, provide information analysis and the best decision-making scheme for material management and decision-making, and make supply workers