The construction industry manages some of the costliest projects in the world. There’s a tremendous amount of manual labor, resources and supplies used in a major construction job, resulting in tons of data. Hence, understanding how data is influencing and shaping your inventory will help you become more knowledgeable, experienced and efficient in this area through the years.
For this blog, let’s discover why Big Data has a huge influence on your inventory.
The Current State of Construction Inventory Management
Driven by the growing demand for competitive efficiency, today’s inventory management competencies go beyond automating key business processes and ensuring accurate inventory – once considered groundbreaking development for obtaining accuracy and speed in construction.
For today’s business control, task management programs are now holding the key to powering business insights that will further help you make more data-driven decisions. As a result, it increases the company’s profitability and productivity.
The said systems can leverage historical data and can apply data analytics to predict future usage. More specifically, there’s this effective inventory software that can further process vast quantities of your inventory’s data, anticipating future usage for your inventory by factoring both in seasonality and lead times.
In this era of big data, specialized online inventory software can provide you with unparalleled insights into channel and usage performance. Here are three common datasets that offer you accurate information in your inventory:
- Stock availability
- Items for consumption returns
- Stock usage
In actuality, Big Data refers as extremely huge datasets that can be further analyzed to show trends and patterns, including the following:
- How to optimize the management of your remaining stock?
- How much inventory is required in order to meet monthly consumption while keeping your stock levels to a minimum?
- How to improve the performance of the slow-moving stock in your inventory?
Ultimately, today inventory management solutions are being equipped already in the application of data science in order to power insights just like everything listed above. And with big data continuously evolving across the industry, it is likely that these insights will become more and more advanced.
Four Ways Big Data Improves Your Inventory Real-Time
Let’s now deep dive into some of the most helpful ways Big Data improves inventory management, including how it transforms insights into trends and patterns that can ultimately enhance your business operations.
1. Improving overall operational efficiency
It is crucial to provide your employees and team the best possible quality of items while keeping the costs to a minimal level without compromising quality. On the other hand, you have to improve your operational efficiency. It is often harder enough, especially for construction businesses with limited supply volumes and inventory levels. However, as the business scales, maximizing and maintaining efficiency can become a bigger challenge.
Always know that software for inventory can help you. Inventory sits at the very heart of your business operations. Hence, gaining full oversight of your stock using web-based inventory software help decrease the friction of supply chain management. In case if you don’t know, here are some of the common friction points that can be resolved using the software.
- Incorrect stock levels resulting in excess inventory
- Unavailable items resulting in missed opportunities and stock-outs.
- Slower item usage resulting in damaged products
Furthermore, applying intelligence to the data collected, stock movements are smooth, and your items’ flow is consistently optimized. As a result, it reduces the time it takes for your crew to choose construction supplies, items and resources they will use. Only a specialized software tool designed for inventory can act as the main repository of your stock since it can significantly reduce the occurrence of excess inventory by further reflecting available stock levels in real-time.
2. Increasing inventory visibility
As the business owner, it’s in your best interest to make the most of your supplies and stocks. One of your goals is to boost visibility. In fact, one of the most considerable benefits of obtaining a wealth of inventory data is the opportunity to gather insights and information that can result in more profitable and smarter decision-making.
For instance, the insights you collected, such as best and worst-performing product lines and channels, can be the datasets you can use to make the right decision for your inventory. Moreover, you can also stay atop stock replenishment when running reports on the inventory item performance. Continuing to stock items and other supplies that can hardly be used can increase your inventory’s visibility.
Data can maximize the visibility of your inventory by enabling successful implementation across multiple channels. Product usage and demand are always talked about. But the, in reality, the demand and actual usage may differ across various channels. As a matter of fact, with the increasing visibility in your inventory as well as channel performance, you can now determine some practical strategies based on item consumption.
3. Increasing satisfaction
The insights garnered from the system can enable a much better user experience for your employees. It helps everyone the main reasons behind why making subsequent business decisions are crucial for your inventory management. Some of the decisions include the following:
Switching to a more reliable supplier
The performance of your supplier can directly be reflected in your business – either good or bad. This is why it is essential to keep tabs on the many reasons why your construction crew is not using some of the items. Having the ability to log reasons at some items within the inventory management software is critical to understanding why these items are not used. Is it because of the poor quality? There can be something wrong and it’s necessary to find out why.
Big Data allows you to determine poor-performing suppliers, providers, and even items that are susceptible to damage. As a result, you can most likely avoid the possibility of your crews becoming dissatisfied with the items and tools they’ve used.
Making smarter purchasing decisions
Let’s assume that you have this particular item in your stock. But then discovered you have five more of this item but in different brands. Later on, you begin experiencing a high volume of unused items. This is where you may want to be more intelligent in purchasing decisions and probably have new suppliers.
Understanding such reasons behind unused items can help you enhance your business processes and strategies to lessen possible issues in the future, thereby preventing excess in your inventory. Choosing the best construction items and supplies is also integral for the satisfaction of your crews.
4. Reducing Costs
While several areas within the construction business can be further optimized for cost savings, one frequently overlooked area is inventory. Most business owners don’t figure out the financial impact of having and carrying excess stock. It is imperative to strike a balance between stocking sufficiently to meet the ultimatum but not much in a way that you’re wasting valuable warehouse space and sustain hefty fees.
To be able to do everything right – you have to understand further the actual costs of holding your inventory. In case you don’t know, it is often known as your inventory carrying costs. And inventory carrying costs notably include:
- Warehousing, including but not limited to utilities, inventory management fees, rent, and labor.
- Materials handling costs from leasing or buying equipment like pallet trucks, forklifts and construction vehicles
- Storage costs and insurance costs
- The total cost of purchasing inventory or capital costs may include the actual inventory cost, loan maintenance fees, financing fees, and interests.
- Risk-holding costs such as obsolete stock, inventory depreciation, shrinkage and the impact of stock out
You Can Rely on Inventory Management Software
While Big Data proves to transform inventory management capabilities, specialized software can also be a huge help when your business experiences inventory shrinkage or inventory loss. Miscounting, damaged stock, theft and obsolescence are the most common reasons why shrinkage occurs in your inventory.
Fortunately, a specialized software tool and inventory management processes can help prevent these losses. You can best track every inventory movement, including the crew who are held accountable, thus reducing theft risks. Not only can this software tool help you with your inventory but also project management. It’s a fully integrated management software that you and your team can ultimately rely on.
Here are its other advantages:
- Communication and collaboration
- Data-driven decision making
- Real-time updates
- · Time-tracking and monitoring
- Document control and sharing
- Project task management
- · Transparency and accountability
- · Cloud-based storage
- User-friendly and easy to access
In addition to using this powerful tool, conduct a regular cycle count – the run-through of counting smaller inventory sections in contrast to uncommon stock takes. It will help you to address quickly and determine inventory discrepancies.
Key Takeaways
Currently, Big Data is continuously pushing inventory management into keeping records wholly and digitally. In the following years, it can be something different. However, it’s essential to be fully aware of where technologies are taking us since it can be the difference between falling behind and improving efficiency.
