How Construction industries use inventory management? And how automation helps them?

As the world is going fast towards digitalization and technology day by day, it is astonishing to see construction companies still clustered at the back, using complex spreadsheets and log sheets to track and manage equipment. An out-dated tool inventory management system can waste a lot of manpower and physical resources. Such painstaking and time-consuming inventory management systems do not give you the standard of service and functionality that automated solutions do. One of the major factors that contribute to the productivity of construction companies is how well they are able to manage their equipment and tools.

The truth is, equipment and tools represent a major investment for construction businesses, so it makes sense to make major efforts to track them more productively and cost effectively. Today, you can find a system or software for each and every business need – and tool tracking software is no exception. Such a system can provide you with instant reports, allow you to see which employees have certain pieces of equipment, and let you know which tools require certification or maintenance.

For many businesses an inventory management is a very important function. If you think about the big retail stores like Wal-Mart or Traget, when they are out of stock, there is a direct impact on the bottom line. Though, these types of big retail stores typically have a wide range of products mix and inventory, so if the specific item is not available the customers have enough options for alternative. But construction industry is different from the retail industry.

If you are out of stock in construction industry, you can see it very easily. Because 50 to 60% of all construction costs come from materials, which means that successfully managing materials on a project can mean the difference between big profits and out-of-control costs. With multiple job sites and a variety of different types of materials and equipment, construction managers have to manipulate a lot of moving parts.

That’s why strong, measured inventory management is so important to a successful construction project. Any slip-ups when it comes to inventory have extremely costly effects.

In the current business climate, with the rate of new construction sites surging, more construction managers are relying on cloud-based construction management software for smarter inventory management.

Construction inventory management software platform will help you to manage your inventory and materials more effectively by providing following features:

  • Resource Tracking and Allocation

Data is vital to any business these days, and the rise of information technologies in the last 20 years has created a whole arsenal of new tools project managers can use to make smarter, more efficient decisions.

Newer construction management platforms, for instance, have capabilities that allow for the precise tracking and allocation of inventory, materials, and assets, all of which can be associated with a particular phase within a project’s timeline.

Software such as this gives construction managers a bird’s eye view of an entire project, while also providing the sort of granular, real-time data necessary to make informed decisions.

  • ‘On-the-go’ Purchase Order Solutions

When you need additional materials, new equipment, or extra supplies, it’s time-consuming to send each request through the home office and check how it lines up with all the other aspects of your business. That’s why you need a platform that uses a purchase order solution that is completely interconnected with all aspects of your inventory management, including accounts payable, work orders, equipment, maintenance, documents, labor, time, and materials.

If you’re shopping for construction management software, choose a platform that leverages cloud technology, so you’ll be able to effectively manage all your purchasing and inventory needs from anywhere, with the insight necessary to keep your project on time and within budget.

  • Simple Document Management

As a construction manager, you need to be able to access, upload, and manage documents on the go. If you’re shopping for construction management software, do not overlook this feature. A fully-integrated document management system means that documents or images associated with particular aspects of a project are accessible wherever and whenever they are needed.

Purchase orders, contracts, submittals, work orders, RFIs, job site photos—these are all important documents upon which big decisions depend. If your projects require you to make real-time decisions, then document management, including the ability to upload documents of all types from anywhere, is a necessary step toward smarter inventory management.

  • Overall Workflow Management

Every construction project has inherent risks involved: unexpected increases in material costs, unreliable or faulty materials, delays or fluctuating deadlines, and talent and labor shortages. You need to manage inventory well, but managing the workflow, budget, and time associated with that inventory is just as important.

That’s the beauty of cloud-based construction management software: just as you’re able to manage inventory and materials, you’re also able to manage aspects of your project’s workflow, including job costs, progress, budget, time to complete, change orders, project logs, and more. A dedicated overall workflow management platform is perhaps the most effective step you can take to keep your project on time and budget.

Automation of Construction Industry

By automating construction inventory management:

  • Manage and maintain the activities across the board
  • Track and account for every piece of inventory, regardless of location
  • Associate each piece of inventory with a phase of the project
  • Generate purchase orders from anywhere
  • Access and manage accounts payable, work orders, equipment, maintenance, documents, labour, time, and materials.
  • Upload and access all sorts of documents from anywhere, anytime, including purchase orders, contracts, submittals, work orders, RFIs, and job site photos.
  • Manage workflow, including job costs, progress, budgets, time to complete, change orders, and project logs.
  • Make real-time data-driven management decisions

50-60% of the costs within the construction industry come from materials. This means being able to successfully manage materials and tool inventory in a construction firm can have a huge impact on your overall costs and profits. With so many different kinds of materials being used at different construction sites, the construction managers are constantly juggling a variety of moving parts. Exploiting any loopholes or shortcuts when dealing with inventory can make you vulnerable to immense costly damage! This is the reason a measured and strong tool inventory management system is so integral for a successful construction project.

With so many constructions companies struggling to land projects, construction managers are depending more on either cloud based or on-premise construction management software for smarter and more efficient inventory management.