The Case for Optimizing Your Construction Inventory Management
Managing inventory is a critical and challenging component of running a successful construction business. As a business grows to meet demand and takes on more projects, the need for supplies and materials grows along with it. Balancing on-site inventory and supplier lead times to complete jobs on time can be a difficult juggling act for construction business owners, particularly in the post-pandemic economy.
Why Construction Inventory Management is Important
Effective construction site inventory management is critical to running a successful construction business and can radically improve a company’s bottom line. Shoring up flaws in your inventory management processes can be the difference between completing projects on time and coming up short.
JIT vs. JIC: Two Very Different Inventory Methodologies
In the era of COVID, many construction businesses have shifted from utilizing the industry-standard JIT (just-in-time) inventory method to the JIC (just-in-case) method, overstocking materials when they're available to guard against stockouts of business-critical supplies. Instead of receiving inventory only as needed, more and more construction businesses are keeping large inventories on hand to avoid windows of product unavailability. This shift in operational protocol results in companies keeping more extensive active inventories, creating a new set of inventory management challenges.
Three Tips to Improve Construction Inventory Management
Comprehensive Physical Inventory Audit
Accurate auditing is one of the best ways construction site managers can determine their stock levels and needs. Physical inventory audits are used to locate discrepancies in stock or records, identify overstocking or understocking issues, detect losses from theft or vandalism, and better understand the efficiency of your stocking operations. Other types of audits, including direct labor, inventory in transit, and freight cost analyses, can also benefit construction businesses tremendously.
Keep an Open Dialogue with Suppliers
In these times of supply chain shortages and operational restrictions, having a good relationship with your suppliers is more important than ever. Keep abreast of stock fluctuations, delivery windows, sales and promotions, pre-orders, and other inventory-specific information that you can use to make sure your sites are stocked with the supplies and materials you need to get the job done.
Upgrade Your Tech
Finding the right software solution for your needs is crucial to properly managing construction inventory. Whether you’re managing inventory across multiple sites or need to monitor stock levels at a single location, many digital platforms can help you streamline your stocking, tracking, and ordering processes.
There’s no denying that it’s a challenging time for inventory management. Supply chain issues and resultant stock shortages have created a climate in which businesses must find new ways to balance production volume with inventory levels and keep business-critical materials in stock while avoiding both obsolescence and stockouts. Rigorously conducting inventory and process audits, maintaining good communication with suppliers, and finding the right software solution are three ways you can help your business stay on top of its inventory management protocols.
How Crescent Can Help
Need assistance with your inventory? Here at Crescent, we’ve got tools to help you streamline and improve your processes. You can order what you need online 24/7 and take advantage of our accelerated shipping program to ensure your materials arrive as quickly as possible. "Whether you’re an electrical contractor or in an industrial application, we understand that keeping your business running smoothly requires having the right parts at the right time and in StockNOW," says Andrew Bohman, the Business Direction Manager at StockNOW, which is Crescent’s managed inventory solution, designed to help eliminate common supply shortages.
Be sure to check out our dedicated construction services site, and don’t hesitate to contact us with any questions.