The construction industry boasts a far more complex supply chain than nearly any other industry, making inventory tracking more important to contractors. Inefficiencies, like manual tracking methods, translate to lost tools, inaccurate counts, and wasted time.
Developing a resilient inventory tracking system can prevent cost overruns and time delays.
In fact, a 2024 study determined that contractors who adopted proper construction inventory tracking systems saw a 35% increase in overall productivity.
Knowing you need an efficient inventory tracking solution is only half the battle. You also need to figure out a functional system that can handle the stress of the construction industry’s unique challenges.
This guide walks you through everything you need to know to create the ideal solution for your business, including methods, technologies, and tools.
While technology is a driving force in building a resilient inventory tracking system, you’ll learn that you don’t need enterprise-level tools to gain the insight you need to succeed.
Common Construction Inventory Challenges To Overcome
Inadequate inventory tracking creates a host of challenges, especially for smaller contractors who don’t have endless time or money.
- Lost or misplaced tools and equipment cause project delays and unnecessary replacement costs that impact the bottom line.
- Inaccurate inventory counts lead to over-ordering, under-stocking, or duplicate purchases. Plus, you need to determine where to store any overages and how to replace any shortages.
- Manual tracking is a tedious task that consumes valuable crew hours that could be spent on productive construction work.
- The lack of real-time visibility makes it impossible to know what’s available across multiple job sites. It also impacts your ability to forecast future needs accurately.
Before you can build a viable system, you need to consider your biggest challenges and how to address them. If you already have some tracking solutions in place that work, choose solutions that integrate those successful components into something bigger and better.
Why Construction Inventory Tracking Matters
How many times has a project been held up due to inaccurate materials counts? What about delays due to missing tools? It’s even worse if those tools show up somewhere after you already purchased replacements.
These challenges aren’t unique to your team. It’s frustrating when it happens, but easy to brush off and keep moving, especially when you’re in a time crunch.
Maybe it’s time to make a change and stop accepting those losses as inevitable. There are four key benefits to developing a better inventory tracking system.
Save Time
How much time does your team waste on searching for tools or materials? What about the time spent waiting for materials to arrive on a worksite?
You may not have the exact numbers, but it’s a big enough problem to warrant research. A 2018 UK study found that construction crews spent about 23% of their time waiting around. Much of that time involved a lack of necessary materials or tools.
While there’s a margin of error in any research study, 23% seems like a lot of lost time on a worksite that could be spent more productively.
Proper inventory tracking software makes it possible for teams to stop wasting hours searching for tools and materials.
Control Costs
Time is money, and you stand to save a lot by reducing the amount of wasted time. If you could cut the amount of waiting in half, think about how much more productive your team would be and how much faster a project could be completed.
Moving past the labor costs and productivity improvements, consider the immediate financial repercussions of better inventory tracking.
If you can’t locate a tool for a project, you either need to purchase it again or rent it from somewhere. On top of the time delays to acquire the tools, those duplicate purchases and rental fees impact your bottom line.
Better construction inventory tracking reduces tool replacement costs. Beyond tools and equipment, better inventory management of materials makes purchasing easier and more accurate.
The fallout of poor materials inventory creates more expensive problems. Overpurchasing items means you need to find a place to store the excess. Underpurchasing requires you to scramble to fill in the gaps, which might mean less favorable pricing.
You can’t afford to stick with the status quo when there’s so much room for error.
Hold Everyone Accountable
Construction inventory tracking transforms guesswork into accurate, real-time visibility of tools, materials, and equipment. For example, you would know exactly who has what equipment and when it was last used.
It’s not about micromanaging as much as protecting your investments, transparency, and enhancing communication between crew members.
More efficient tracking also allows you to maintain seamless workflows by ensuring your team has what they need on hand. You don’t want to have extra equipment or items hanging around on a site when they aren’t needed.
Keeping tabs on usage, such as through daily logs, ensures that you know where you stand with all equipment and materials. You can react faster and make more informed decisions when the inevitable delay hits.
Build a Stable Foundation for Growth
If you want to grow your business, you need the foundation to do so. You can’t grow your business if your foundation isn’t stable enough, and poor material management will hold you back, if it hasn’t already.
Reliable tracking systems allow contractors to manage larger inventories efficiently, including across multiple job sites, thus setting the foundation for growth.
A construction inventory tracking system includes room to grow and expand to meet your business needs. The best tools and strategies are flexible enough to adjust as you expand your operations.
Choose the Right Construction Inventory Tracking Method
There’s no right way to handle inventory tracking, but that doesn’t mean there isn’t an optimal approach for your company.
While there is significant overlap between these methods, one might work better for you than the others.
ABC Analysis
One of the more common options for the construction industry involves prioritizing tools and materials based on their importance. Break all items into three categories with A being the highest priority and C the lowest.
Automated Replenishment
This software-based method automates ordering. It reorders items when your inventory of the item drops below a set threshold.
Demand Forecasting
You might consider this option if you maintain accurate inventory numbers and a thorough understanding of each project’s needs. It requires some calculations to predict what you need to order for each project.
Economic Order Quantity (EOQ)
Consistency is key for this inventory tracking method as it relies on balance. Order just what you need for your project without wavering one way or the other. Meet the demands of your projects without overordering.
Just-in-time (JIT) or Lean
This approach focuses on maintaining the minimum across all tools and materials. Using this approach involves carrying minimal extra supplies because you order precisely what you need for each project.
Inventory Tracking Technologies To Consider
Contractors have several options when it comes to technology to help with inventory management. Effective tracking requires choosing the right combination of methods based on asset value and tracking needs.
Labeling Systems
Labeling your tools, equipment, and materials is fundamental to any inventory tracking system. Something as simple as a barcode can have an impact on your company’s efficiency, but there are many more options available.
Advanced options include GPS and RFID. While it might not be necessary for everything, using GPS or RFID for your heavy machinery and expensive equipment could save you a lot in the long run. Think of it like getting Apple tags for your equipment.
Mobile-Friendly
Even the most effective inventory tracking system won’t help if you can only access it from your office computer.
It’s too easy to forget to make a change or update a count if you have to drive back to an office or hub to access the database. There’s the added challenge of everyone thinking somebody else is going to handle it, and then nobody actually updating the inventory sheet.
Make sure any system you choose is mobile-friendly across different devices so field teams can make updates. When your team can make changes from the sites, you have access to the real-time information you need.
Automation Opportunities
Few people enjoy inventory-related tasks. It’s tedious and time-consuming to handle them manually. When you’re paying skilled professionals, inventory tasks can feel like a waste of time, and sometimes a punishment.
Automated tracking reduces manual labor while improving accuracy and accountability across all projects. It’s faster and more efficient, which will boost your overall productivity.
Your team will appreciate handing off those tedious tasks, and you’ll feel better about having your skilled workers focused on what they do best.
Robust Communication Features
Texts, emails, and phone calls are fine, but they aren’t always the most effective option for teams. Clear, effective communication is key to sharing real-time inventory updates.
If you’ve ever had a mix of Apple and Android users, you can relate to the inefficient communications between platforms. A messaging app that works with all devices is far more effective.
Choosing an app or software that has a built-in Team Chat feature maximizes efficiency and makes other aspects of any job that much easier. Your team being able to communicate from their phones easily is a win-win situation.
Full-Service Software and Apps Cover All Your Bases
How many different platforms do you currently use to manage your day-to-day? If you ever feel overwhelmed or have difficulty training new team members on all the things you use, you might be ready for something new.
Full-service software offers a range of tools in one package to make inventory tracking a breeze. It’s a bonus if the platform handles additional tasks.
When you’re looking for software to handle your construction inventory tracking, you want something with robust tools that include all of the above elements.
Other elements to look for include:
- Daily Logs allow your team to share photo documentation from worksites and include features such as location tracking.
- A Cost Item Database serves as a digital catalog of all your tools and materials. Some options include tracking capabilities to protect your investments.
- Electronic Purchase Orders make it possible to track items from the time you order them to the time they’re delivered on a worksite.
Using manual solutions or multiple platforms for your inventory tracking can work, but it will require time away from other tasks.
Leveraging full-service software and apps like Contractor Foreman to support your team creates a seamless system. Being able to access everything you need through one platform is the ultimate choice for boosting productivity.
Construction Inventory Tracking Is a Cornerstone of Success
Construction inventory tracking is fundamental to your success and opens doors for growth. Creating the most efficient system ensures you have the information you need when you need it and reduces lost time and money.
Given how complex construction inventory can be, especially for smaller companies, having an effective tracking system is necessary. It means selecting the right method, tools, and technology to offset the key challenges.
Build your inventory tracking system to meet your needs by making it mobile-friendly and easy to use. Look for options with automation features and seamless communication with your team to improve efficiency and productivity.
Full-service software allows you to do everything from one platform to maximize efficiency and productivity.
You know how to handle inventory tracking manually, but ask yourself how well your system works. Doing things manually or piecing them together with several different tools leaves too much room for error and miscommunication.
Consider upgrading to software that brings everything you need together in one place. Contractor Foreman eliminates the complexity by providing all the tools you need in a user-friendly package.
Start your free trial to see how Contractor Foreman gives you the oversight you need to manage your inventory efficiently.
