Assessing the role of inventory management in construction project cost overrun in a small and medium-sized enterprise in Witbank.

Abstract

Material inputs are an important factor in the success of construction projects, directly impacting costs and timelines. Mabhele and Associates is a small-medium enterprise supporting or subcontracting infrastructure projects. Cost overruns are a recurring issue in South Africa’s infrastructure projects, affecting economic stability. This study explores how effective inventory management can mitigate cost overruns in construction projects at Mabhele and Associates in Witbank, South Africa. Eight participants were purposively selected from the 29 employees of the enterprise based on inclusion criteria, ensuring a diverse and in-depth mix of respondents capable of providing comprehensive insights. The dissertation comprises two critical parts: a comprehensive literature review and fieldwork. This study assessed the challenges associated with inventory management in construction projects. The research employed a qualitative design, using interviews as the primary data collection method. Thematic analysis of the interviews reveals several challenges impacting project efficiency, including procurement delays, material shortages, and inadequate storage management. These issues often stem from cumbersome procurement processes requiring multiple quotations and approvals, leading to delays in material availability. Additionally, limited storage space complicates on-site material management, contributing to inefficiencies. Findings indicate that cost overruns are exacerbated by poor project management, underestimation of project costs during feasibility studies, and scope creep. Regulatory factors like compliance sometimes result in less experienced companies securing contracts, leading to inaccurate quotes and inefficiencies. Inexperience with contract management, inaccurate project coding, and hiring uncommitted companies further contribute to project delays and increased costs. The study showed that improving procurement processes, storage management, and project planning can significantly mitigate cost overruns. Strategic recommendations include fostering clear communication with suppliers, monitoring delivery schedules, and ensuring proper contract and project management. This research's findings may apply to similar organisations within the construction industry, providing valuable insights for improving inventory management practices and reducing project costs across the sector.