ERP-Integrated Inventory Control and Profitability in Construction: A Case Study

Abstract

In the construction industry, materials account for a significant portion of project costs and timelines, yet material management practices remain largely underdeveloped compared to other sectors. Enterprise Resource Planning (ERP) systems, while widely adopted in manufacturing and retail, have not been fully leveraged in construction, particularly for integrated inventory control. This study aims to examine how ERP-integrated inventory control models influence project profitability and performance in the construction sector. A mixed-methods approach was employed, comprising a preliminary survey of 100 Ahmedabad-based construction firms to assess ERP adoption trends, followed by an in-depth case study of a mid-sized construction company using an ERP software. Data were collected through structured interviews with key stakeholders involved in material management operations. The findings highlight improvements in procurement planning, inventory visibility, and cost control. However, critical limitations were identified, including lack of analytical tools (e.g., ABC/VED classification), manual data handling, poor user compliance, and insufficient system integration with accounting processes. The research underscores that technological adoption alone is insufficient; successful ERP utilization requires data discipline, user engagement, and customization aligned with construction workflows. The study provides practical recommendations for enhancing ERP system effectiveness and contributes to bridging the gap between theoretical ERP frameworks and real-world applications in construction. The implication is clear: to realize true profitability gains, ERP systems must evolve from passive record-keeping platforms into active drivers of decision-making and operational excellence