One of the biggest challenges of growing a construction business is managing construction site inventory.
As the demand for your business starts to gain traction, your need for material supplies also increases. Without sufficient preparation, you will find yourself caught unaware by the increased cost of storing inventory and scrambling to manage the lead times of your suppliers to meet the demand.
Managing supply levels and the availability of equipment is crucial to ensuring a project is delivered on time and within budget. This involves knowing the right level of supplies to carry to avoid incurring huge carrying costs and at what level of inventory to reorder supplies, as well as keeping supplier lead times in check.
Here are some key strategies that you can employ to manage construction site inventory.
1. Audit your material supplies regularly
Many construction site inventory issues come from inaccurate data, which inevitably causes site managers to commit wrong decisions. Poor record-keeping can result in unforeseen inventory shortages and unaccountable deficits, all of which can prove fatal to a construction business. In order to have an accurate view of your inventory levels, you need to conduct inventory audits regularly. For construction projects, this involves taking a look at your construction materials as well as your construction tools, equipment, and consumables.
There are inventory auditing techniques available to site managers. The most common method is conducting a physical audit, which involves a comparison of the initial inventory forecast amount and comparing it with the actual amount of inventory you have on hand. Other techniques include using a sampling method like cycle counting, which is useful for ensuring accurate inventory levels between construction projects.
2. Invest in an inventory management system
Different technology advancements have been created and widely-adopted in the construction industry–from lien management to workforce processes, companies can take advantage of new technology to streamline their operations. In fact, the entire process of managing construction site inventory can be made easier and more efficient with the use of an inventory management system. Such application software has multiple features that enable construction businesses to manage inventory on multiple construction sites, optimize categorization and storage locations, and track changes in product levels on a central digital platform. In addition, many inventory management systems also have tracking technology to monitor shipments coming from different vendors as well as material supplies moving from one construction site to another in real-time.
3. Make a list of supplier delivery centers
Having a bottleneck in your inventory will harm your operations, resulting in problems in your cash flow. When there is an inventory issue, it is crucial that you have a network of suppliers that will be able to support you as soon as possible. For this reason, it is a good practice to maintain a list of supplier delivery centers, especially if your business relies on third-party vendors. Knowing supplier contact information and locations lets you manage delivery times in case of an inventory shortage. Take note of suppliers with last-minute delivery services in case of tight deadlines.
4. Leverage new technology to guide inventory management
Aside from a central inventory management system, there are several new technologies that you can employ to improve logistics tracking and inventory management. Mobile phone scanners are a budget-friendly option for tracking inventory. Since most employees have smartphones, all you need to do is download the software needed for the scanner. Another example is using RFID technology to track high-value assets across multiple locations. This enables you to know where tools and equipment are, reducing the need to rent more equipment as a replacement for those you can’t locate.
Having access to the right tools and equipment for the job as well as the right amount of material 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.