As a contractor or business owner, you are always on the move. However, the challenges of maintaining the transparency for high-value assets and inventory inside and outside of the warehouse become more crucial and difficult than ever. And whether the assets or inventory are part of your services, delivery activity, or sales, real-time transparency is vital in order to react correctly to unexpected changes.
Have you already heard inventory management? If not, then it is a phrase you’ll encounter in nearly any industry. One sector where this phrase is unusually absent is in the field of construction. It implies that most construction companies do not have a clear picture of their supply chain as well as sufficient knowledge about inventory management.
So how can your construction business benefit from inventory management, and what effective changes can you deliver to improve your inventory on the job site? Find out in this blog and learn more.
Inventory Management in Construction
For instance, you’re working on a particular project that instantly grinds to a halt due to a missing one piece. You thought you already ordered enough. However, some components have been misplaced or misdirected. It could be construction materials, tools and equipment that suddenly disappeared. But whatever your case, you cannot continue the work until that one missing inventory is being replaced?
How many times have you been in this situation? Once is fine, but it only shows how your business needs inventory management when it happens every single time. This is also especially true if your business relies heavily on paper-based inventory tracking. This manual way of tracking is often inaccurate, misplaced and downright cumbersome.
And this is where inventory management should be given more attention. This implementation will help you manage your construction inventory much better. Management in your inventory plays a crucial part in your business success. In fact, mishandled inventory is one reason why a business cannot succeed and have a more challenging time thriving.
Hence, for your construction business, managing and seeing your inventory in real-time is critical. The first step you can do is to update your methods and use cutting-edge technologies.
Inventory Management is Beneficial for Your Business
Here are several reasons why more and more contractors should move to this type of inventory management.
1. Inventory and Asset Optimization
Many contractors keep tons of inventory on hand and safely stored it in the warehouse, including the many construction equipment required for different onsite activities. But if a contractor like you isn’t implementing inventory management and deploying advanced inventory management software, you may have a poor understanding of what you keep in your warehouse.
Equipment may also sit idle since it has long been forgotten or probably misplaced. Oftentimes, the holes in the inventory don’t usually reveal themselves until the workers are on the job site and whenever the job gets delayed.
Only an advanced software solution can provide fact-based and objective information on shrinkage, stocking levels, and consumption. Having real-time data allows your business to react more proactively and much quicker.
2. Jobsite Optimization
Keeping track of your construction equipment and inventory is good for more than just minimizing loss and on-the-job theft. It may also help your entire business operation to run efficiently and smoothly. Tracking your company’s tools and equipment diminish time that may be wasted searching for a certain piece of equipment that is already being used or possibly misplaced.
Here are some other practical tips when you optimize your job site:
- Change policies on equipment purchasing – instead of purchasing your materials or equipment from various vendors, build a working relationship with a specific marketplace or one vendor. In this way, you will not be waiting on upcoming deliveries from many different directions, turning your entire inventory much easier to track.
- Reduce excess inventory – for instance, if you have tons of equipment that barely used or were only purchased solely for one specialty project, consider selling it to recoup most of the costs. Doing so will reduce the size of your inventory and create more space for your warehouse.
Read our blog, “How to Deal with Excess Inventory in Construction?”, to learn more about this matter and get some tips.
- Adjust your mindset – It’s easy to disregard many emerging trends in the industry and stick to manual inventory management methodologies because they’re easy to use and adapt. Realistically, they aren’t the most effective or efficient way to manage your inventory, though.
You must take time to ponder something essential and change your mindset about these things. However, it’s highly suggested not to be afraid to say goodbye to traditional and outdated techniques.
- Join the 21st century – embracing techs is not a bad thing, and it can help make your whole operation more cost-effective and efficient. Make sure to adopt the latest cutting edge-technology like construction software for small builders as they become more and more available in the market.
3. Higher Revenues
A lack of optimization in your inventory may have a significant impact on your company’s bottom line. Incorrect demand forecasting may lead to lost opportunities and stock-outs. Also, inadequate stock replenishment may result in useless outlays. This is why transparency in the inventory is crucial because it allows you to know exactly how much to order and when to order it.
Inventory tracking systems will lead you to much greater efficiency and lead you to more job opportunities. That’s primarily because many prominent clients are now looking to work with contractors that are deploying more sophisticated systems. Hence, if you’re using the latest software tools like web-based inventory software, you will have a higher chance of getting the opportunity.
4. Improved Compliance
Many contractors might not be able to realize it, but compliance is one of the ideal uses of inventory systems. In many ways, the software solutions can be used, from ensuring that safety equipment complies with OSHA standards to environmental regulations to government transportation maintenance requirements. Indeed, compliance is an ideal way to use this technology.
Moreover, compliance also ensures that some parts used on the job are accurate, including the revisions. Only inventory software can provide you more traceability in the inventory.
5. Tracking Your Materials and Equipment
Inventory management usually starts with keeping track of all construction tools, equipment, and materials per job site. This is where you need to maintain your inventory control and obtain accurate and updated oversight over equipment parts and materials. The data you have is expected to be adjusted as values change.
Over time, managing your inventory can be harder. This is one of the reasons why it’s vital to make changes in how you handle this specific area. Not taking it seriously may affect your company’s bottom line.
Prioritize Inventory Management Software for Your Business
Over fifty-sixty of the costs within the construction typically come from the materials used for the projects. So being able to efficiently manage inventory and materials can greatly impact your entire costs and profits. And with various types of materials used at construction sites, you may find yourself and your team juggling a wide variety of moving parts.
Exploiting shortcuts and loopholes whenever dealing with your inventory will make you vulnerable to expensive damages. This is why reliable online inventory software is critical for efficient inventory management and successful construction project.
Here are the fantastic benefits this application offers:
- Simplified inventory management – probably the finest benefit of using this application-actually makes the entire inventory process much easier, saving you more money, time, energy, and even sanity.
- Tracking of inventory use – one of the most significant advantages of this tool is that you can anticipate the actual needs and make sure the warehouse is properly stocked when you track the used construction items.
- Reduced many forms of risks – You may find yourself losing control over excess inventory. But such issues are preventable because this specialized tool allows you to adjust your stock levels.
- Avoidance of stock-outs and unnecessary stock – you can track any low stock levels, preventing any occurrence of stock-outs.
- Better construction item visibility during a recall – recalling items you have in your inventory can be difficult, but software tools like this can provide you more visibility and transparency.
- Making more profitable business decisions – can provide you invaluable data, delivering more data-driven business decisions.
- Project management for construction – you’re not only having full control of your inventory but also control over every aspect of your project.
- Ease of access – helps you identify items that are used more frequently.
So there you have it, the many advantages of using this specialized software. Get started with a FREE 30-day trial today!
Contractors, business owners, and project managers must focus on inventory management and the need to invest in industry-leading, cloud-based, mobile inventory management systems. As the companies re-evaluate their technology systems in the light of certain situations, now is the perfect time to move. So make sure you’re taking action on updating your methods and start adopting state-of-the-art technologies.