Streamline Your Construction Business with Better Inventory Management

For a construction company, keeping track of your inventory may seem like a waste of time. After all, getting the job done and setting up the next project usually takes highest priority.

Materials in the yard, tools in the trucks and gang boxes, machinery on the job site, equipment that may be loaned out to someone, vehicles, office equipment and furniture, and so much more—these are all part of what brings value and net worth to your company. Making it a company policy to keep track of those assets in the same way you would financial assets is going to help your company run more efficiently and increase your bottom line.

Whether it’s your accountant wanting to get you the most write-offs or depreciation, you asking the bank for an increased credit limit, the insurance company itemizing for replacement cost, or employees knowing what they have to work with, not knowing your inventory and just guessing can put you at a disadvantage.

Material Inventory: Gain Control of Your Supplies

Even a well-organized yard can leave you guessing about what’s truly available. Tracking your materials helps you:

• Adjust stock levels to match seasonal demand.
• Take advantage of bulk discounts on frequently used items.
• Avoid waste by redistributing or selling leftover special-order materials.
• Improve project cost estimates by turning leftover, previously billed materials into profit.
• Deter theft and reduce losses by keeping accurate records.

Assign incoming and outgoing materials to specific job costs or general stock for future use. Make it a policy for the yard manager to document all inventory movements for greater accountability.

Tool Inventory: Protect Your High-Value Assets

Tools are a prime target for theft due to their portability and resale value. To safeguard your investment:

• Record the date of purchase, make, model, serial number, and cost for each tool.
• Use an inventory database to track the location of tools—whether they’re at the shop, in trucks, or on job sites.
• Assign responsibility for tool management:
  • The shop foreman should track tools leaving for job sites and ensure proper documentation.
  • The job site foreman and employees must protect tools and equipment on-site.
  • Employees with company vehicles should conduct monthly inventories to ensure tools are accounted for.

A systematic check-in process after project completion helps verify tool return and prevent losses.

Office Equipment & Furniture Inventory: Don't Overlook the Basics

Your office assets, including computers, furniture, and other equipment, also deserve proper documentation. Here’s how to stay prepared:

• Create an itemized inventory of all office equipment.
• Use video documentation to capture the layout and condition of higher-value items.
• Store backups of electronic and paper records at a secure offsite location to protect against potential loss.

Leverage Technology: Mobile Apps for Efficiency

Take advantage of modern tools to streamline inventory management:

• Use mobile apps to track materials and tools in real-time, saving time on manual processes.
• Check inventory from the job site to avoid unnecessary trips to the office or supply house.
• Assign responsibility for tools by transferring them digitally between employees, fostering accountability and reducing delays.

Knowing what tools are available, as well as what each employee has, helps in scheduling job tasks. Tracking tool and equipment movement between employees and job sites can be achieved without checking them in at the shop, saving valuable time chasing down tools. As each person accepts the transfer of a tool, responsibility is transferred to that person. This helps increase the feeling of responsibility.

As we enter the winter season and some of us come into downtime, a review of your tool inventory and training procedures for employees may be time well-spent. Who knows, you may realize your uncle’s neighbor still has that hammer drill he borrowed two years ago.