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New Year 2023: 7 Practices to Jumpstart Your Inventory Ops
It’s that time again—the start of a new year, when many make resolutions. We view the start of the year as the opportune moment for you to take a look at your inventory operations, assess, and put into work the important changes that will ensure a better outlook for the coming year.
We’ve previously written about the importance of inventory in the New Year (e.g., inventory best practices 2022, inventory management best practices 2021), so for regular readers, some of our tips may serve as a refresher—however, these time-tested traditions remain critical as talent is harder to come by, construction costs rise, etc. What’s more, we’ve added a couple new ones to the list to keep our new and returning readers on your toes.
- 2023 Construction Inventory Management Statistics
- 7 Practices to Jumpstart Your Inventory Ops in 2023:
- Clean Up Bad Inventory Entry Data
- Organize the Crib and the Fleet
- Kit Your Bulk Sends
- Use the Right Tracking Hardware for the Job
- Manage the Safety Stock
- Synchronize Software and Productivity Apps
- Adopt Construction Job Costing
- New here?
2023 Construction Inventory Management Statistics
But before we get started, here are a few relevant statistics to inspire and kickstart your 2023 business:
- The Global construction market is expected to reach $8 trillion by 2030, according to the Institution of Civil Engineers, with the U.S. construction market expected to grow faster than China over the next 15 years.
- That said, labor shortages, which have been felt globally (67% of the industry affected) are bound to perpetuate their impact. For example, the chief economist for trade org Associated Builders and Contractors echoes these concerns, summarizing that “construction spending will expand, exacerbating the chasm between supply and demand for labor.” With these concerns front and center as we enter 2023, the importance of intelligently using the talent and technology you do currently have at your disposal becomes clearer, an important facet of keeping work on track and even cutting down on inventory-related downtime and ensuing project overruns. In fact, we’ve even previously written about using inventory to solve the construction labor shortage problem.
- Gartner reports that through 2025, 25% of supply chain decisions will be made across intelligent edge ecosystems. We’ve previously written about the emerging role of digital twins in construction as well as digital twin benefits to projects, including a comprehensive view of data, smarter predictions, optimized performance, greater efficiency, and more. Digitizing your tool inventory plays a key role in building up your operational digital twin to drive transparency and operational efficiency; facilitate cross-team collaboration through data sharing; and ultimately to make better data-driven decisions (especially when you’ve synched your inventory up with your ERP, which we’ll discuss a little later).
Now, let’s jump into those construction inventory practices to deploy in the new year!
1. Clean Up Bad Inventory Entry Data
Why it matters
Anyone with an iPhone can attest to the dreaded “iCloud storage almost full” messages, and for businesses, duplicate data entry is often the culprit behind serious data inefficiencies, which often perpetuate the same real-world problems that digital solutions were supposed to correct (e.g., upending data loss from shuffling papers in a busy tool crib). That is to say, even aided with technology, human error is still there. Human error can result in inaccurate statistical results and conclusions—as pointed out by researchers at the University of Nevada-Las Vegas and Keiser University in their 2011 paper, published in the peer-reviewed academic journal Computers in Human Behavior. “A single data entry can make a moderate correlation turn to zero and a significant t-test non-significant,” the authors wrote. Despite being a 12-year-old research paper, the problems presented therein remain accurate today—furthermore, as industries like construction are finally laying down the infrastructure needed to digitize, tool manufacturers and software developers are teaming up to bring solutions such as software integrations that will help reduce manual inputs, synchronize data, and drive efficiency.
Duplicate data entries have become a problem ubiquitous of the digital age, felt simultaneously by customers and service providers. Almost any business in virtually every industry can attest to having to deal with duplicate data at some point—whether that’s the consumer product brand struggling to find “a single customer view,” the marketing team struggling to send out relatable emails, or customers corresponding with your service team encountering a disjointed experience (or a combination of them all).
The Problem Outlined: Duplicate Inventory Data Entry
Closer to home, tool and equipment inventory duplicates are also a serious problem we find happening, and it usually starts at the onset. For example, when users add a 1/2” Drill/Driver, the naming conventions used the first time may not match up as they add additional items of this same kind, or as other inventory managers in the crib are added and start managing the flow of new items.
The result may be multiple items with similar, albeit slightly different, names: e.g., Milwaukee 1/2” Drill/Driver, Milwaukee 1/2 Drill, Milwaukee 1-inch drill, Milwaukee Fuel 1-inch drill, etc.
The Solution Proposed: Unified Inventory Entry Process
When it comes to duplicate data issues, the unfortunate scenario you may face is that there may be more upfront work before the true impact is felt.
That said, correcting old, recurring problems by implementing the right infrastructure to prevent them in the future is key.
- Document a new process: The first step is documenting a new data entry protocol. Just as publications will offer a “style guide” to contributing writers to ensure consistency, managerial-level inventory professionals may take it on themselves to document (perhaps via a Google sheet that can be easily shared) the way in which new inventory of various manufacturers are added to ensure new, onboarded inventory professionals will follow company protocols and future duplicate data entry is averted.
- Find and rename: Once this new process is in place, you’ll need to find and rename existing equipment to the proper naming conventions. If you manage a large inventory, this may be a time-consuming project that is chipped away over time. If you can narrow down your list to commonly used tool names, you can use our bulk edit to rename and fill in any gaps in one fell swoop. Either way, perhaps it’s a tedious job that can be offloaded on an intern or apprentice?
- Upload in batch: In addition to following your newly documented data entry protocol, we recommend uploading new inventory items in bulk. This can help reduce the potential that human error may occur when manually adding items. If an error is made in bulk, for example, you can quickly remedy that error in bulk.
2. Organize the Crib and the Fleet
Organization in the digital world doesn’t excuse disorganization in the physical world.
We’ve previously written about the importance of tool crib organization.
Did you know that using the correct organization tools can improve time management by 38%? Or that a manager loses 1 hour a day to disorder? Miscommunication and poorly documented project data, meanwhile, accounts for 52% of rework, an Autodesk/FMI-joint survey found.
Just as we previously discussed of the importance of laying the right infrastructure down for data entry, organizing the physical world within the tool crib is an important first step to ensuring the digital world where important equipment information (e.g., tool transfers, assignments, location history, etc.) can be managed without incident.
- Tool crib storage ideas include:
- Organizing by tool type (e.g., drills by drills, saws by saws) and subcategory (e.g., sawzalls, bandsaws, tablesaws, etc.) to prevent misplacement—additionally, large, legible labels on shelves to denote these categories and subcategories (similar to what you’d see in the halls of a Home Depot) can help crib managers easily find what they’re looking for, potentially saving some foot traffic.
- Wire cages for storage (and padlocks) can help maintain physical security.
- Freestanding shelving and even PACKOUT™ shop solutions can help customize your workspace.
- Additionally, we’ve previously offered mobile work van organization ideas to help streamline your mobile fleet, streamline in-field ops, and ensure your tool delivery and logistics chain is moving smoothly without incident. These tips include:
- Optimizing your work van space for maximal organizational capacity.
- Using modular storage and kitting (we’ll explain the latter in greater detail in the next section of this article).
3. Kit Your Bulk Sends
Tool kitting is an important inventory practice used by crib and tool room managers in order to group (in bulk) a job’s tool and equipment, create and audit a list of these received items on the job, and offer the ability for field ops teams to sign-off (or request more information, report a discrepancy, etc.) on these items in real-time.
Tool kitting is a live feature that anyone can use in ONE-KEY™ for free:
- Learn how to create a tool kit on Android
- Learn how to create a tool kit on iOS
- Learn how to create a tool kit on Web
4. Use the Right Tracking Hardware for the Job
Choosing the right tracking hardware to assign to your items is a critical part of maintaining visibility and the smooth flow of inventory to the job, as well as ensuring tool managers can keep track of these items while keeping costs down.
Put another way: The right tracking hardware helps you ensure the right stuff ends up on the right job at the right time, so work can commence on schedule—and also that these items find their way back to the crib when the job finishes.
Just as the adage “you need the right tool for the job” rings true for proper electrical installations, rough-in plumbing, etc., the right tracking tool is needed for a successful job.
Here are our recommendations:
|Job||Tool of Trade|
Small tool tracking (e.g., low-value items such as hand tools like screwdrivers, hammers, etc.; ladders; job carts; etc.
Barcoding is typically used in warehouses and can be extremely useful to update basic inventory information, like tracking safety stock levels, for example.
· ONE-KEY™ Asset ID Tags offer construction-grade durability (intended to last the life of the tool) that solve the typical problem of traditional barcodes that wear out and fall off—they also provide easier scanability via a 3D matrix code, the ability to ditch the expensive barcode equipment (the One-Key app uses your smartphone camera), and a location update with every scan.
Tool tracking of medium-to-high value items (e.g., individual power tools like drills, saws, etc.)
Combined with our industry-leading tracking network, contractors and tradespeople can connect sites, people, and equipment via industry-leading tracking hardware:
· ONE-KEY™ Bluetooth® Tracking Tag. This recent product replaces our legacy TICK™ Tool & Equipment Tracker and adds additional tracking technology, including built-in NFC and a scannable QR code for simplier activation, an onboard accelerometer providing greater equipment location data (e.g., item “last-used”), a built-in speaker for in-vicinity item finding, 3X Bluetooth range compared to the previous product. Furthermore, this product has been very well-received, winning both a Pro Tool Innovation Award and Chicago Innovation Award.
· Milwaukee® Tool ONE-KEY™ compatible smart power tools. It may be worth it to upgrade your inventory to smart tools. Milwaukee offers the widest range of smart tools and equipment, which come standard with Bluetooth tracking, as well as (depending on the item) the ability to dial in precision controls for application-specific accuracy and repeatability, the ability to pull tool utilization data and reporting, etc.
Equipment/Asset tracking for high-value items and equipment (e.g., expensive generators, heavy machinery, fleet vehicles)
GPS (global positioning system) tracking offers the most advanced and real-time (i.e., to the moment) equipment location data on the market—however, it also comes at a usually higher cost (e.g., think higher equipment costs, subscription fees, etc.).
That’s why we usually recommend reserving GPS trackers for your most valuable inventory items. This might be the fleet vehicles that transport all your inventory, the job boxes containing large quantities of inventory on the job, your costly heavy machinery, etc.
- Further reading: Tracking Tag vs Asset ID tags vs TICK™: What’s the Difference?
5. Manage the Safety Stock
Safety stock, we’ve previously defined, is the “extra quantity of supplies or resources deliberately set aside as a precaution against events that can’t otherwise be planned for—e.g., the “buffer” or “reserve” stock that will cushion against a number of different situations that could lead to you running out of items in your inventory (aka: “stockout”).
Businesses understand the importance of safety stock. For example, did you know that over half of warehouses plan to expand the number of inventory SKUs carried over the next five years (Motorola via Capterra).
While labor shortages are hard to address (we have added some tips on how to be competitive among jobseekers), inventory may help negotiate these challenges. After all, if large tech companies can make job cuts to look “lean” to investors on paper, why can’t the opposite be true, to work smarter with the talent you do have.
Safety stock, when combined with a good construction inventory management system, can offer added capabilities. For example, taking a look at equipment location history, pulling utilization data, or looking into an item’s historical service records are a few examples where a tool room manager can begin to make data-driven insights to find answers to important inventory-related questions like “should I repair or replace my tools?” before a breakdown occurs. In fact, automated service reminders can ensure something like that doesn’t happen. What’s more, equipped with this data, your tool team can start to implement performance-improvement inventory KPIs like order lead time, labor utilization, asset turnover, return on assets, etc., to start tracking toward better profitability each year.
6. Synchronize Software and Productivity Apps
We’ve previously written about the advantages to integrated software in place of the so-called “one-off” solution.
Software integrations play an important role in both:
- Ensuring the “cloud-based” platforms and mobile apps used by the multidisciplinary teams working within your organization can synchronize, so those who need it have the access they need, and edits can be seen by everyone in real-time.
- Minimizing or (if possible, fully) eliminating the “manual” inputs we spoke about earlier that can lead to duplicate data incidents.
Despite the importance of software integration, for many companies it’s an uphill battle.
Some startling statistics about the lack of software integration that exists among organizations:
- Only 16% of executives surveyed say their organizations have fully integrated systems and tools, a KPMG survey found.
- Similarly, the JBKnowledge annual ConTech report found 23.6% of surveyed indicated that “none” of the software applications they use were integrated.
- Despite these survey responses, the same report found that 62.4% of companies reported using mobile devices on the field for daily reporting, while 21.4% of construction firms reported using 3 or more mobile apps for their projects.
- A Dodge Data & Analytics report found that 47% of construction firms surveyed used third-party tools, with around 60% leaning on desktop applications and 40% using cloud-accessible ones.
At Milwaukee, we consider data & integration as an important attribute of what makes an inventory app great, and we use this as one of our “4 fundamental pillars” that define how we develop our app. Example integrations include Autodesk BIM 360 and Procore.
However, we also regularly offer technology partnership opportunities, pilot programs, and we’re regularly seeking opportunities to build new integrations that help facilitate enhanced productivity and drive our industry forward. One of our product managers recently joined the Construction Progress Coalition, for example, to help participate in important dialogue among construction leaders about potential solutions for future technologies. You can even stop by Oracle’s industry lab to see our torque wrench reporting experience in action in through an immersive experience, and chat with us about a potential partnership.
7. Adopt Construction Job Costing
A couple key equipment rental statistics showing the importance of job costing:
- Equipment rental accounts for over 47% of industry revenue, IBIS World reports.
- According to equipment rental company Big Rentz, construction equipment is rented for an average of 6 days.
Job costing in construction inventory management helps tool managers calculate rates for the tools they’re sending to the job, and manage this process from the cloud via a suite of job costing/reporting tools.
The One-Key app recently rolled out a job costing feature, free to use! It’s important to note, too, that while job costing is usually an enterprise feature used by large construction companies, anyone can take advantage of this feature, especially sole proprietors and scrappy entrepreneurs looking to leverage digital tools to take their business to the next level.
The job costing feature in the One-Key app enables users to:
- Assign daily and/or weekly rental rates to individual tools as well as tool kits they’re sending to a given job in bulk.
- Calculate the cost accrued for each day those items are in the field (when these tools are transferred to the jobsite).
- You can also create job costing reports for added accountability and transparency.
What Is Construction Inventory Management?
Construction inventory management allows contractors and tradespeople alike to more seamlessly manage the jobs they’ve taken on by allowing them to maintain visibility to, for example, their tools and equipment (of various manufacturers), service, documentation, etc.; utilize barcode scanning and tracking hardware; manage jobsite communications from a central, cross-device interface; manage places and subcontractors; etc.
Construction Inventory App
Milwaukee Tool offers a free construction inventory app that offers numerous benefits and features, including:
- Unlimited access via a cloud-based system, accessible on computer (web app), iPad, and smartphone apps (Android and iOS).
- The ability to import contacts from your phone book and streamline communications—call, text, or email the people you need to, right from the app.
- Multi-user admin that allows collaboration while offer role-specific access permissioning.
- Industry-leading tool tracking hardware, backed by the industry’s largest BLE tracking network.
- The widest range of IoT-connected smart power tools to drive trade-specific productivity, utilization data, reporting, and standard tool security and tracking.
- Leading-edge construction technology partnerships, integrations, etc.
- And so much more!
2023 is officially here! And while labor/productivity challenges persist, the above-mentioned construction inventory management strategies for 2023 can help you work smarter with an agile tool team.
About the AuthorLucas is Content Manager for the One-Key team. He’s equally passionate about creating useful content that helps contractors be more productive and reporting on cutting-edge topics in construction technology that might inspire further consideration. When not working, he spends his free time riding and enthusing about motorcycles. More Content By Lucas Marshall
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