Vendor managed inventory in contruction industry in Malaysia

Abstract

Successful project management involves efficient management of project resources such as materials and labors. Material management is focusing on material handling and delivery. This study looks into vendor-managed inventory as a potential solution for reducing inventory problems at site. There is potential of successful application of VMI in Malaysia but it will depend on the response of the industrial players. Vendor-managed Inventory is an inventory control system that shifts the responsibility of taking care inventory at site to contractors. The first signs of VMI were perceptible in manufacturer that used to reduce the cost of holding inventory. The objectives of this project are to study the inventory and its problem in undertaken construction project and analysing the potential of VMI in local construction industry. Other objective is to investigate the extent of expected barriers and benefits from the viewpoint of construction personnel. Based on the survey, there are two major problem faced by construction personnel including inaccurate measurement that lead to wastage problem and site inventory records (spreadsheet application) which tends to be flawed due to manual process. The survey shows that there are few more steps for local construction industry to reach the concept of VMI. Finally the project reveals that lack of cooperative culture and increased repeat business with the key suppliers or contractors has identified as major expected barrier and benefit from viewpoint of construction personnel.