How An Inventory Management Software Can Resolve Your Construction Inventory Nightmares
How An Inventory Management Software Can Resolve Your Construction Inventory Nightmares

How An Inventory Management Software Can Resolve Your Construction Inventory Nightmares


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In managing construction projects, some might think that inventory management is an unessential piece in the puzzle- a negotiable variable in the business. The truth is, however, it plays a crucial role in the overall operations and your company’s profit margins. Most of the business sectors that exist, from medical and construction to automotive and retail to automotive, rely on inventory management software to offer optimal profitability and excellent services to their clients.

An efficient inventory management system benefits every area of your construction business, while a poor one does the opposite. Below are some of the common inventory management issues in construction- and how integrating the right inventory management software can help fix them.

1. Overstocking and Shortage of Inventory Items

Knowing exactly how much (or how few) of an item you need to meet current demand is one of the primary challenges of inventory management. Not ordering the correct amount from suppliers or vendors can lead to stock surpluses or stockouts. Either way, these scenarios often escalate quickly to operational inefficiencies and cut down revenue for your business.

Stock surpluses hamper your capital in inventory items that you aren’t using. If you work with construction materials that expire or depreciate very quickly, such as cement and soft timber, the costs of overstocked materials are even greater. Moreover, the storage space required for keeping overstocked items adds up to even higher overhead costs. 

On the other hand, the adverse effects of inventory shortages are more evident. One, your customer service is affected as you cannot fulfill the target construction milestones and timeline as expected due to insufficient construction materials, tools, or equipment on hand. Secondly, replacing an inventory item last minute typically requires a marked-up price at a local store or an overpriced rush-shipping charge. 

A good construction inventory app allows you to bulk-order supplies accurately, achieving a lower price per unit without the risk of overstocking items. This application can even keep track of the level of supplies, which takes the guesswork out of how much to order.

2. Shrinkage, Spoilage, and Obsolescence


a. Shrinkage

Inventory shrinkage happens when an inventory item has been stolen, a big concern for some construction companies with large warehouses and a long list of supplies. If your company has tons of cash invested in inventory, that’s a huge risk—one that may warrant a risk reduction strategy. 

b. Spoilage

Inventory spoilage occurs when inventory goes bad before a company can use it in a construction project. If your firm makes or sells perishable construction items—like cement or paint—then having too much stock is a definite risk. While the cost of sold goods accounts for some spoilage, unusual spoilage is a big concern. 

c. Obsolescence 

Inventory obsolescence happens your inventory has become outdated, which reduces or, worse, entirely decimates its value. This can occur when new and improved versions of the construction material hit the market. Examples include self-healing concrete, spider silk, and bioplastic. 

Most construction businesses use a balance sheet to evaluate their financial assets as well as liabilities at a certain time. And, when it comes to inventory management, a balance sheet reveals precisely how much money your business has tied up on its storage. 

Balance sheets can aid your company in identifying financial risks, such as shrinkage, obsolescence, and spoilage. Take note that your balance sheet will not reveal inventory risks, so you’ll need to review your inventory reports with your crew to determine risk and its roots.

3. Lost and Damaged Inventory Items 

It is almost impossible to keep track of an item without an organized inventory management system as it gets passed on in day-to-day site operations. Construction teams are likely to have several workers at several different job sites using dozens of pieces of equipment and tools each day. With so much going on, it’s not surprising for inventory items to be left behind at a project or even damaged by an employee on the job with no explanation or accountability.

Detailed inventory management is required to prevent or reduce these situations from happening. With the right construction inventory software, you can oversee your inventory information without babysitting each of your valuable equipment and tools.

4. Wasted Time

Everyone has heard of the old phrase “time is money,” and that’s ever so true once your construction company begins to grow. There is nothing more costly than time in this industry, which is why spending unnecessary time on inventory management that you can automate would feel like a waste.

The “time drain” in conventional inventory management comes in many different forms. Maybe your employee is in the warehouse manually counting each of your stock for two days straight. Perhaps another employee spent their day going from store to store, looking for something the team has failed to order in a timely fashion. Or just maybe you pondered over spreadsheets for hours on end, tracking the flow of dollars in your inventory manually.

Efficient inventory management gives you what you need most in the construction world: time. The precious time to spend face-to-face meetings with clients, time to work on marketing strategies, time to get out of your office or trailer and into the action on site. Knowing where your inventory is and how much of it you have on hand is truly a game-changer.

5. Manual or Human Errors

We all make mistakes; after all, we’re all just humans. Some mistakes, such as manually entering an item quantity into a spreadsheet incorrectly, can be considered a human error. Other mistakes, such as miscalculating the construction project cost due to inaccurate inventory counts, are more severe. Fortunately, many inventory errors are preventable with the help of the right inventory management software.

An innovative inventory management system eliminates inaccuracies at every phase of the inventory process. For instance, manual errors are prevented by keeping the online inventory database updated at all times. A construction project’s timeline and cost parameters can be more accurately estimated when you know which materials and equipment you already own and what needs to be ordered before the project commences. You’ll spend less time searching for figures and numbers in your spreadsheets, and you’ll be able to meet your project stakeholder’s expectations with utmost confidence. 

6. Reluctance of Employees to Use Inventory Management System

Even your most hardworking employee doesn’t have the same concern for your improvement visions that you do. Not to mention that most team members are focused on executing their tasks quickly and efficiently. These qualities aren’t bad, but they cause employees to put less energy and time into complicated inventory management improvements. 

For instance, if the established system requires your crew to sit down at the computer to update records every time they use an inventory item, they are likely to skip the protocol if they’re in a hurry to deliver the item on site. In this situation, either your inventory system suffers, or your construction operation timeline does. You’re between a hard place and a rock without a streamlined management process.

If you want to manage your construction company’s inventory in the best way possible, replace the old-school spreadsheets with intuitive inventory management software. 

Many company owners go right to the excel spreadsheets when it’s time to collect. It seems like a great option, indeed. You can add tabs, customize your labels, search through sheets, but it doesn’t take long before the traditional program becomes your burden. Here are the pitfalls of the old spreadsheet system:

  • Time-consuming to input and analyze data and record
  • High chance for manual or human errors
  • Doesn’t track changes over time and simultaneously across the whole team: as you update the information, you lose valuable data showing how inventory levels have changed on a daily, weekly, or annual basis

In your head, you might think inventory management is simple. You only need the correct quantity of the right items, without supplies running low, and you need to know where it is located and who has used it at a given moment. Some software, like spreadsheets, has a way of making that much more complicated than it needs to be. 

Ideally, your online inventory software should work a lot like your second brain: easy to audit, can be filtered by location, and always up-to-date. You need inventory management software that’s scalable and fully customizable and super easy to use – like Pro Crew Schedule.

When selecting inventory software, look for a product that offers critical features designed to save you time, money, and stress. Ideally, the product should be:

  • Accessible from any place, at any time—even on construction site, back office, central warehouse, or even your home
  • Work like an app on computers, tablets, and phone your company or employees already owns
  • Very easy to set up—no training manuals or seminars required 
  • Detailed and customizable enough to replace and improve your current inventory management system
  • Perfect for multiple app users, allowing access to your construction team, including suppliers and vendors
  • Able to keep item histories, so you can be informed who had what, where, and when.

Ready to see how the best construction inventory management software can make a start and the rest of your year that much easier? Why not give Pro Crew Schedule a chance, totally free? 

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