ERP Systems and Cost Control in the Construction Industry: A Conceptual Analysis of Material Flow Management

Abstract

Abstract Objective Effective stock management and material flow control are essential for optimizing inventory levels and improving project performance in the construction sector, where decentralised job sites, variable material consumption, fragmented supply chains and strict budget constraints create distinctive operational challenges. Inadequate visibility of material flows often results in waste, emergency procurement, cost overruns and project delays. This paper examines how integrated management practices, supported by Enterprise Resource Planning (ERP) systems and complementary digital technologies such as Building Information Modeling (BIM), can enhance cost control, budget monitoring and visibility across material flows. Methodology Using a qualitative, exploratory, and descriptive approach, the study conducts a narrative/conceptual review of the literature with thematic content analysis and compares construction practices with those of more standardized sectors, such as retail and manufacturing. Findings The analysis highlights the specific inventory and logistics challenges faced by construction organisations and explores how digital integration can support more effective decision-making and resource coordination. Based on the findings, a conceptual framework is proposed linking ERP–BIM integration, material flow visibility, operational performance and cost control outcomes. Value Added The study contributes to the literature by synthesizing fragmented knowledge on construction logistics, inventory management and digital technologies into a unified conceptual perspective. From a managerial standpoint, the findings emphasise the importance of investing in integrated digital systems and real-time information sharing to improve inventory accuracy, reduce material losses and strengthen budget governance. Recommendations The paper also identifies opportunities for future empirical research, particularly through quantitative studies and multiple case analyses assessing the impact of digital integration on construction project performance.