Answered February 15 2020
The construction industry is full of challenges for business owners, from the skilled labor shortage to protecting their right to file a lien. But one of the biggest and most complex challenges that you should prepare for is the management of construction inventory.
When your business starts to grow and you accept more projects, there will be a consequent need for more materials and supplies. Many inexperienced construction business owners can be easily overwhelmed by this increased demand and may find themselves struggling to deal with higher carrying costs and manage supply lead times to meet the needs of the projects.
Construction projects are a huge undertaking. A single project has multiple participants and plenty of moving parts, each of them required to fulfill their roles efficiently in order to deliver the project on time and within schedule. Managing the supply levels of materials and the availability of equipment is crucial, especially when a company has multiple construction projects to manage as scheduling can become complex. This entails knowing at what level of inventory to file the next order as well as what level of supplies will give you the lowest carrying costs.
Effective construction site inventory management provides tremendous benefits for a construction business. One of the primary advantages relates to scheduling coordination in a project. Many construction processes are time-sensitive and require precise timing to get them done properly. When these schedules get mixed up, you will end up incurring additional costs to rectify mistakes which will significantly cut your bottom line. Having a construction site management system ensures that workers will have access to the materials and equipment that they need when they need them.
Another part of construction site inventory management that can be tedious is the handling of consumables such as nuts, bolts, screws, nails, and drill bits. These items may seem small and expendable but without proper tracking, losses can add up and cost your company in the long run.
Construction site inventory management is also essential in ensuring equipment is in excellent working condition. Construction firms need to follow strict industry standards for the preventative maintenance, inspection, and calibration of equipment. The scheduling of preventative maintenance needs to set within a timeframe that works for the project since you need to schedule the use of tools and other equipment needed for the maintenance as well as reduce employee workload.
The bottom line is that inventory management is crucial to reducing rework and saves you both time and money. Here are some of the best practices that you can employ to manage construction site inventory.
One of the major causes of construction site inventory issues is inaccurate data, which leads construction site managers to make the wrong decisions. With erroneous record-keeping, construction projects may experience unforeseen shortages in materials and supplies as well as losses that are accountable, both of which can ultimately affect your bottom line. For this reason, it is important that you conduct a regular audit of inventory on hand to have accurate information on inventory levels. This includes not only your construction materials but also consumables, construction tools, and equipment.
Construction site managers have several auditing techniques that they can use to determine inventory levels. The simplest and most common technique is conducting a physical audit. This involves comparing the initial forecast amount of inventory needed and the actual amount of inventory on hand.
The construction industry has long been regarded as one of the least digitized sectors in the world. However, several technological advancements have since been created and widely adopted by many construction businesses. From drone technology to dedicated project management software, these tech innovations have streamlined and improved many construction processes, including inventory management.
There is plenty of construction site inventory management software that you can use to make tracking inventory levels easier and faster. Ideally, you want an application that can manage your inventory on multiple construction sites, streamline the categorization of materials and equipment, and monitor the changes in inventory levels. Since most of the construction work is done on the field, you also want an application that is accessible even out of the office. Finally, you should also look for inventory management systems that let you track shipments that are arriving from vendors or moving from one construction site to another.
Aside from an inventory management platform, there are also other tech innovations that you can use to make inventory tracking easier. A common and budget-friendly option nowadays is using mobile phone scanners to track inventory. Most employees have smartphones so just a single download of a scanner app is needed to do the job. RFID technology can also be used to manage high-value assets and equipment so you know where they are in real-time.
No matter how prepared you are, it is inevitable that you will encounter inventory issues that can hamper your operation. Any bottlenecks in the flow of inventory can easily cause delays and affect your cash flow. That is why you should be prepared by having a list of suppliers, including their delivery centers and contact information that can support you in case of an inventory problem. Having this information lets you manage their lead time in case of a shortage of materials.
In conjunction with this, look for suppliers that offer last-minute delivery services. Timing is crucial in a construction project and delays will have a negative impact on your company’s reputation. Having a supplier on-call can help you when you are in a tight spot inventory-wise.
As your construction company bids for bigger and more complex construction projects, the management of your inventory also increases in difficulty. Knowing the right amount of materials and supplies to carry and the location of the tools and equipment needed for a project will enable you to make sound decisions and perform your tasks effectively.
Having access to the right tools and equipment for the job as well as the right amount of materials and supplies to carry is possible only through the effective management of construction site inventory. With the size and complexity of many construction projects, inventory management can be a challenge. But with the right practices and strategies in place, you can simplify and overcome this difficult task.
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