Impact of Material Procurement and Inventory Management on Construction Project Efficiency at Design Space Architects and Hexagon Construction

Abstract

Materials absorb the largest single share of a construction project's cost, yet the procurement and inventory practices that govern them are still treated in many firms as a clerical function rather than a management one. This study examines how material procurement and inventory management affect project efficiency at two Bengaluru firms with deliberately contrasting operating models: Design Space Architects, a design-led practice that delivers through appointed contractors, and Hexagon Construction, a mid-sized contracting firm running its own sites and stores. Evidence was assembled from two sources: a structured survey of 168 staff across the two organisations covering five dimensions of practice, and a ledger of 312 completed material work packages carrying cost variance, schedule slippage, inventory holding and emergency-purchase data. Reliability was acceptable on every scale, with Cronbach's alpha between 0.829 and 0.878. Regression on perceived project efficiency explained 47.7 per cent of variance. Inventory control practice carried the largest standardised coefficient at 0.345, followed by supplier selection and evaluation at 0.247 and procurement planning at 0.161; material handling and wastage control contributed nothing once the other dimensions were held constant. The firm indicator was not significant, which means the observed efficiency gap between the two organisations was accounted for by their practices rather than by their type. Inventory holding days were essentially unrelated to schedule slippage, while emergency purchases correlated with it at 0.35, a pattern indicating that carrying more stock on site does not buy schedule protection. An ABC analysis found six categories carrying 71.3 per cent of annual spend, and a simulation redistributing an unchanged budget of control effort towards them reduced work packages overrunning by more than six per cent from 43.3 to 31.7 per cent. The study contributes firm-level evidence on which procurement and inventory practices actually move project efficiency, and which are merely conventional.