An Integrated Approach to Inventory Management for High-Rise Building Construction Projects Using SAP Business One: A Study on Optimization of Materials, Tracking, and Cost Efficiency
Abstract
High-rise building construction projects involve complex material planning, procurement, storage, and distribution processes that directly influence project cost, schedule, and productivity. Fragmented, manually updated inventory practices frequently cause material shortages, wastage, and cost overruns. This study proposes and evaluates an integrated inventory management framework built around SAP Business One (SAP B1), an enterprise resource planning (ERP) platform, customised for high-rise residential construction. A case-study methodology compares inventory performance before and after SAP B1 implementation across five high-rise residential projects (28-33 storeys) executed in Pune, India, using key performance indicators (KPIs) including inventory accuracy, material availability, wastage, warehouse efficiency, traceability, manual data-entry errors, user productivity, procurement lead time, stock-out frequency, and inventory carrying cost. Post-implementation results show mean inventory accuracy rising from 74.0% to 97.8%, material wastage falling from 8.6% to 3.0%, mean procurement lead time reduced from 10.4 to 6.4 days, stock-out incidents reduced from 15.0 to 3.4 per month, and inventory carrying cost reduced by an average of 21-25%. A supplementary three-month material-consumption audit on a 32-storey casestudy project recorded an estimated direct cost saving of approximately ₹15.80 lakh. The findings indicate that a construction-customised SAP B1 deployment - integrating procurement, warehouse and bin management, batch/serial tracking, and cost-centre-linked material issue - substantially improves inventory visibility, reduces discrepancies and wastage, and strengthens project cost control. The study also compares SAP B1 against SAP S/4HANA, SAP ECC, and SAP Business By Design on implementation time, cost, and feature fit, and offers a practical implementation roadmap and recommendations for construction firms and ERP consultants adopting digital inventory management.