Contractors are always on the move. But the challenges of maintaining visibility of inventory and high-value assets outside of the warehouse have become more difficult and more crucial than ever. Whether the inventory or assets are part of a service, sales or delivery activity, real-time visibility is critical to accurately and quickly react to unexpected changes such as the coronavirus pandemic.
Industry experts say the pandemic has only elevated challenges contractors were already facing when it comes to field inventory management. That's because today's construction companies are working across broad geographic areas and projects. In fact, research shows the average AEMP contractor manages 1,333 pieces of equipment — a total worth $157.2 million. What's more, between $300 million and $1 billion worth of construction equipment is stolen each year, with nearly 1,000 pieces of commercial equipment reported stolen monthly, according to the National Insurance Crime Bureau.
Not only are these high-value tools, equipment and materials harder than ever to track, but whether lost or stolen, they're causing unnecessary — and costly — delays. "They've got all these assets rolling around and they don't know where they are," said Scott Jennings, President of SJ Construction Consulting.
That's especially true for companies that still rely on paper-based inventory tracking, which is often misplaced, inaccurate and downright cumbersome. But savvy contractors are discovering a better way to track and manage high-value field inventory: cloud-based, mobile solutions.
Here are four reasons Jennings and other experts say more and more contractors are moving to this type of field inventory management — and what it can do for your business:
- Better productivity. This first point may seem obvious. If contractors know where their yellow iron, small tools and materials are, they can be more efficient. But Jennings said many times, managers only have a "gut feeling" about the time being wasted looking for these assets.
"A lot of times, they know there's inefficiency because the tools and equipment aren't on hand, but the workers aren't held accountable," Jennings says. "These systems support that feeling of 'Yeah, I knew there was inefficiency going on.'"
James Spivey, DSI Regional Vice President of Sales, adds that today's mobile, cloud-based field inventory tracking systems also reduce errors, admin time and the need for such large physical inventories. "Most companies are very good at looking at hard dollar costs," Spivey said. "But there is more value in an asset than what you pay for it."
- Inventory and asset optimization. Many contractors keep a lot of inventory on hand or stored in a warehouse, not to mention the many pieces of equipment jobs require. But if contractors aren't using field inventory management systems, they often have a poor understanding of what they've actually got in those warehouses. And equipment sits idle because it's been forgotten or misplaced. Often, the holes in the inventory and equipment don't reveal themselves until workers are on-site and the job gets delayed, said Jennings. "For example, for plumbers, knowing ahead of time that they have enough small diameter pipe and the necessary pieces and parts is critical."
Spivey adds that field inventory tracking systems provide objective, fact-based information on consumption, sales, shrinkage and stocking levels. "Digitalization of inventory is not only a macro trend, but also paired with BI tools gives an easy view of inventory and helps identify risk with stock-out and overstocks," he said. "Having this information allows businesses to react quicker and more proactively."
- Improved compliance. Many contractors may not realize it, but compliance may be one of the best uses of field inventory tracking systems, Jennings said. The systems can be used for everything from ensuring that safety equipment is up to OSHA standards to government transportation maintenance requirements to environmental regulations. "Compliance is a fantastic way to use this technology," he said.
Compliance also extends to ensuring that the parts being used on a job are correct, and even the correct revision, Spivey said. Field inventory tracking systems allow serial number tracking and support easy recall and traceability. "Unique identifiers ensure it is not only an asset but that it's your asset, which helps identify ownership," he said. "That way, chain of custody is established as inventory is moved, allocated and stored."
- Higher revenues. A lack of inventory optimization automation can have a hidden impact on a company's entire bottom line, Spivey said. For example, inaccurate demand forecasting can lead to stock outs and lost opportunities. Poor stock replenishment can result in unnecessary outlays. "With visibility into your inventory, you can know exactly how much to order and when to order it," Spivey said. "So, you're always servicing your customers."
But field inventory tracking systems don't just lead to greater efficiency; they also lead to more jobs, Jennings said. That's because many larger customers now only want to work with contractors using more sophisticated systems, which guarantee better efficiency and handovers. "So if you're using these tools, you're probably getting invited to the dance," he said.
Contractors need industry-leading, mobile, cloud-based field inventory tracking systems more than ever. As companies re-examine their technology systems in light of the pandemic, experts say now is the time to make a move. "You need to lead or get out of the way," Jennings said. "A lot of these old-school guys are intimidated or afraid of new technology. But if you're not adopting this tech, you're going to be left behind."