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    Introduction to Construction Inventory Management


Welcome to Construction Inventory Management 101

Although construction happens on the job site, the operations of a modern construction company go far beyond the field. The field personnel support every project the back office and warehouse teams undertake. Only when all three teams work together can a project be successful and profitable for the company. 

The management of construction inventory – tools, equipment, materials, and consumables – is one element of construction companies’ operations that involves all three teams: field, warehouse, and back office. The field team needs items on-site to complete the job, the warehouse team is responsible for delivering those items when needed and in good working order, and the back office team needs visibility and oversight to ensure the project progress on schedule and within budget. 

This high degree of coordination among teams means modern construction companies must properly manage their warehouse stock, transfer items to and from the field, inspect and service items when necessary, purchase and receive items when stock runs low, and more. These companies need a construction inventory management software solution.

Effective construction inventory management software fosters enhanced collaboration between field teams, warehouse staff, and back-office personnel. By providing a centralized platform where all inventory-related data is accessible, team members can easily share information and coordinate their efforts. This seamless communication ensures that everyone is on the same page, reducing the likelihood of miscommunications and errors that could delay projects. 

But why do you need purpose-built inventory software for the construction industry? Can’t you just use a generic inventory management system? 

You can, but it won’t be as effective. Let’s dive deeper into this issue.

The problem with generic inventory management systems

The problem with most generic inventory tracking systems is that they just provide counts of what’s on the shelf. For construction companies, that is not enough. Margins on contracts in the construction industry are often thin, so construction companies must operate efficiently to make a profit. And to operate efficiently, they need a construction inventory management system that supports end-to-end logistics and operations workflows for sourcing, transferring, tracking, servicing, and replenishing their inventory items. 

For example, knowing that two generators are available at the northwest warehouse is helpful information, but what if the upcoming job requires five generators and one in stock is required at another location? Most generic inventory management systems won't be able to relay that information without much input from workers. This also significantly increases the possibility that human error will come into play and potentially cause a crippling delay due to a lack of proper equipment on site. 

Inventory management for construction companies is a seemingly minor but extremely important place where improvements can add up over time to save time and money – which is why having proper inventory software for construction companies is so vital.

Why efficient inventory management is crucial for construction companies

Construction inventory management is a much broader, more strategic concept than just keeping track of what’s on shelves in the warehouse. It provides the opportunity to think strategically about how you resource projects and manage the process and the assets deployed throughout the process.

Through the use of purpose-built construction inventory management software, modern construction companies have the opportunity to manage their warehouse, purchasing, and receiving, seamlessly to ensure waste and lost productivity are eliminated. They can minimize the costs associated with these functions by deploying the appropriate construction inventory tracking systems to allow their personnel to improve the timeliness and accuracy of their warehouse and field operations, from identifying a need for an item, picking and transferring it, or purchasing and receiving the item if it’s not in stock – all through a system that tracks and keeps a record of assets throughout their entire life cycles.

Construction inventory tracking and management software also plays a crucial role in ensuring compliance with industry standards and safety regulations. By keeping detailed records of tool maintenance, inspections, and certifications, the software helps construction companies stay compliant and avoid potential fines or shutdowns. Automated alerts for upcoming maintenance and certification renewals further simplify compliance management, allowing teams to focus on their core tasks

How construction inventory management software systems differ from other inventory management systems

The biggest difference between a construction inventory management software system and a generic inventory system is that a construction inventory management system is designed to support different types of construction assets (which have different requirements) and operational workflows specific to construction. Let’s look at what's unique about construction assets and workflows and how purpose-built inventory management software for the construction industry can be a real game-changer.. 

The best inventory management software for construction companies offers customizable solutions to meet the unique needs of different construction projects. Whether you need to track high-value equipment or manage bulk materials, the software can be tailored to provide the specific tracking capabilities required. This flexibility ensures that you can efficiently manage all types of construction assets, regardless of their complexity or volume.

There are four types of construction assets – tools, equipment, materials, and consumables – with different tracking and management requirements. For example, some items should be tracked in bulk (e.g., hammers), while others must be tracked individually (e.g., generators) based on value, service needs, or other factors. Some items get used up on the job site (e.g., plywood), while others must be returned to the warehouse once the job is complete (e.g., cherry picker). A robust construction inventory management system will support both bulk and individual items and the ability to track usage history and service information directly in the construction inventory app when needed.

In addition to supporting construction assets, an inventory management system for construction industry should also support key logistics and operational workflows, including the ability to request and fulfill item transfers between stocking locations and job sites, purchase and receive items through purchase orders automation, track and schedule servicing of equipment such as inspections and maintenance, and automate job cost and billing based on tracking item usage on a per project basis. 

What else to look for when selecting a construction inventory management software system

In addition, to support construction assets and workflows, construction inventory management systems should integrate seamlessly with your other business systems and provide powerful analytics reporting to ensure the system meets the needs of every department and can grow with your company. 

Integrations. As a critical operational system, your construction inventory management system should be integrated with your other business systems to ensure data from the system is available enterprise-wide, avoid double entry, and reduce human error. Some specific system integrations are connectivity with your ERP or accounting system, construction management software, and broad support for scanning technologies such as barcode, RFID, QR code, GPS, and/or BLE. 

Reporting and Analytics.  In addition to supporting more efficient operations, your construction inventory tracking software should have the ability to measure results, report on them, and identify other areas for improvement. Robust reporting and data-driven analytics are no longer optional; they’re must-haves for construction companies that will remain competitive and profitable.

Integrations and analytics reporting deliver strategic value to meet your organization's needs today and in the future.

Improve your Construction Operations with a Great Construction Inventory App 

Underutilized inventory is expensive, a nuisance to store, and bad for your balance sheet. Don't pay for warehouses and shelves you’re not utilizing. Leverage an inventory management system designed for construction companies with interconnected digital workflows that comprehensively reflect and support your logistics. The result will be more effective and efficient operations that save your personnel time and your company money.

A robust construction inventory management system will enable you to keep the warehouse organized and support efficient warehouse logistics, provide tracking of assets from warehouse to job site and back, deliver exceptional service to active projects, and give your back office team the visibility, oversight, and systems integrations they need to understand what’s happening in the field and run the back office business functions. 

Request a demo today to learn more about how Align supports construction inventory management and warehouse operations!


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