Without organization, a construction project will most likely fall to pieces. This is true in all phases, but particularly when it comes to job site inventory. Construction projects entail transferring and keeping track of countless materials and pieces of equipment. With an abundance of different crew members, it’s small wonder inventory becomes misplaced or even lost. This can very well result in construction interruptions and massive monetary losses.

Fortunately, there are a variety of tools that can help make job site inventory a bit less stressful. By applying new technologies and techniques, you can make certain you won’t lose or overpay for resources ever again.

Before continuing, let’s all settle on what we mean by construction inventory, inventory list and inventory management.

Construction inventory is a rock-solid, comprehensive list of everything a company or entity has got in stock, even if it’s not ready to be made use of to date or is stored in an out-of-the-way locale. As an example, a baker inventories all the varieties of flour he/she keeps at hand. Likewise, a pharmacist’s inventory information discloses every medication on the shelves and the number of supplies needed to complete a customer’s prescriptions.

So, what precisely do we do with this inventory? Frequently described as stock, inventory can either be sold to a customer directly or indirectly or assist a business in carrying out its services.

On the other hand, inventory lists are thorough, detailed reports of every item your construction business has in stock. And it’s so much more than just a straightforward list of items.

This list also discloses essential details about each building material or piece of equipment, including where a particular item is presently located or stored. These lists must encompass pertinent details, from purchase price to location and supplier information to present-day item condition.

What about construction inventory management? This is the organizing, ordering, storing and employing inventory applicable to construction project operations. No matter what your company maintains in stock, inventory management is crucial to keeping your workflow running efficiently. To completely understand your inventory, your entire team must consistently exercise inventory management.

Whether your firm is a mammoth enterprise or a tiny startup, applying strict inventory management techniques is important to the firm’s profitability and general productivity. There are various platforms to manage your inventory, including employing traditional pen and paper methods, entering data into spreadsheet cells or including inventory management software.

Tips for managing your jobsite inventory


Develop a resilient instead of an efficient supply chain

Generally, inventory management has not been part of the construction industry’s language. That’s due in part to the oft-used Just-in-Time (JIT) model essentially excludes inventory management since materials are expensed at the time of purchase. While a useful concept, it also impedes precise job costing and workflow.

This tip, then, concerns rebalancing supply chains in the direction of resilience versus efficiency (as with JIT). This involves building inventory, acquiring vital materials and long-lead times, and identifying alternative suppliers. Assembling a “back-up” network of vendors will better safeguard the business in times of calamities, such as the recent Covid-19 pandemic.

This could also involve expanding off-site construction by pinpointing vendors to produce prefabricated components in controlled environments. This is a great alternative to onsite production and can also be a bit more cost efficient. A couple of examples of customary prefabricated assemblies could incorporate steel sections, concrete, walls and roof trusses.

Conduct a regular audit of inventory on hand

One of the chief causes of construction site inventory problems is erroneous data which can lead to construction site managers making incorrect decisions. With inaccurate record-keeping, construction projects may face unanticipated shortages in materials as well as losses that are accountable, both of which can eventually have an effect on your bottom line.

This is why it’s imperative that you perform a regular audit of inventory on hand to obtain the precise information you need on inventory levels. This involves not only your construction materials but also construction tools and equipment.

Construction site managers have a number of auditing techniques they can take advantage of to verify inventory levels. This includes assessing the initial forecasted quantity of inventory needed and the real amount of inventory readily available.

A number of companies do an across-the-board inventory once a year. Others perform monthly, weekly or even daily spot checks. Apart from how often you do it, make it a point to tangibly count your inventory on a regular basis to make sure it matches up with what you think you have on hand.

Be consistent in how you receive stock

It may appear as common sense to make sure inbound inventory is dealt with, but do you have a regular technique that each employee follows, or does everyone receiving and processing incoming stock do it “their own way”?

Tiny inconsistencies in how new stock is taken in may well leave you scratching your head at the end of the month or year, questioning why your numbers don’t line up with your purchase orders. Be very sure that all staff that receive stock do it precisely the same way, and that all boxes are confirmed, received and unpacked all together, correctly counted and double-checked for accuracy.

Analyze supplier performance

An erratic supplier can bring about problems for your inventory. If you have a supplier that is routinely late with deliveries or habitually shorts an order, it’s time to take action! Discuss the issues with that particular supplier and discover what the problem is. Always be prepared to switch suppliers or deal with uncertain stock levels and the possibility of running out of inventory as a result.

List all of your supplier delivery centers

No matter how organized you are, it’s unavoidable that you will run into inventory issues that can hinder your operation. Any holdups in the flow of inventory can clearly result in delays and adversely affect cash flow. That’s why you need to be prepared by maintaining a list of suppliers, including their delivery centers and contact information that can shore you up in the event of an inventory problem. This information will allow you to manage their lead time in case of a materials shortage.

In combination with this, consider suppliers that provide eleventh-hour delivery services. Timing is essential in a construction project and delays will have a negative influence on your company’s reputation. Having a supplier on-call can help when you’re in a tight spot inventory-wise.

Employ bar code and RFID solutions

The prevalent methods to managing jobsite inventory incline toward bar code and radio frequency identification (RFID), and then depending on scanner equipment and software to incorporate collected data with monitored inventory.

This appears simple enough. Construction firms can employ suitable bar code and RFID labels on materials and the matching scanner to keep track of the whole thing. While this method of inventory management and scanner equipment is obtainable from a wide assortment of vendors, selecting a company that excels in custom solutions can make things a bit easier. It’s also normally much easier to work with the support staff of an organization that understands the construction industry instead of an inventory solutions company that is only acquainted with warehouses and wholesalers.

Note: Bar code and RFID systems are the best technique for dealing with construction site inventory but some construction companies, especially smaller ones, might want to check out some mobile apps first. There’s simply nothing to lose with the free apps and it might even provide a company with the feeling for what features they should search for if they decide to go with a bar code or RFID system down the road.

There are any number of inventory scanner apps on the market including Inventory Tracker for Android, Inventory Tracking Sheet w/Barcoding Mobile App and Assorted Apps for Inventory. Some are free and others can be bought for a few dollars. True, the software on these apps may not be totally up to par with RFID inventory resolutions, but the gap is closing.

Use a combination of tracking systems

To better speak to inventory requirements, various construction companies have created a combination of the solutions just touched on. A wide-ranging tracking system consists of a blending of barcode labels, scanner hardware, mobile apps and the ability to customize. This provides you with the best of all potential solutions so you can oversee your onsite inventory swiftly, easily and in real-time.

Change your mindset and embrace inventory management

As we’ve previously mentioned, and it needs to be reemphasized, inventory management has not been an integral part of the construction industry. Again, much of this is because the JIT model dismisses the notion of inventory management since materials are expensed at the time of purchase.

Mario Nowogrodzki, CEO at Mendelson Consulting appreciates the challenges construction companies encounter and the planning necessary to guarantee growth and success moving forward.

He explains. “As construction companies grow. It’s to their benefit to stop relying on third-party suppliers for materials in the JIT model. Consider a small contractor with a renovation job. The contractor purchases materials upfront, which can lead to higher pricing before even billing for work. This problem is fixed when contractors practice proper inventory control – buying and storing materials upfront and then expensing them when used. This now provides proper tracking of inventory and supports extremely accurate job costing and reporting.”

For these, and other reasons, a change in mindset is necessary. The time has certainly come for the construction trade to see itself as an inventory-management-driven industry to manage a more responsive organization.

Benefits of construction site inventory management
Efficient construction site inventory management delivers huge benefits for a construction business.

One of the many improvements relates to scheduling coordination in a project. Any number of construction practices are time-sensitive and entail exact timing to get them finished correctly. When these schedules get muddled, you’ll wind up suffering added costs to remedy mistakes that will substantially cut into your bottom line. Employing a construction site management system makes sure that workers will have an entree to the materials and equipment they need, when they need them.

An additional portion of construction site inventory management that can be wearisome is the managing of consumables such as nuts, bolts, nails and drill bits. These things may appear trivial and even expendable but minus proper tracking, losses can really add up and cost a company in due course.

Construction site inventory management is also indispensable in making sure equipment is in first-rate working order. Construction firms should adhere to exacting industry criteria for the preventative maintenance, assessment and calibration of equipment. The scheduling of preventative maintenance needs to be established with a timeframe that works for the project given that you need to arrange the use of tools and other equipment necessary for maintenance in addition to bringing down employee workload.

Let the planning begin

While certainly not a far-reaching list, these tips are a guide to offer the construction industry a good starting point. With the uncertainty lingering after the pandemic and the state of the economy, redefining business requirements and building an organization that is agile is necessary if the construction industry is to continue to rebound and gain momentum over the next 12 months and beyond.