No doubt, improving profitability is a construction executive’s top priority. What’s unclear is how to achieve profitability in today’s economy, particularly given rising tool and equipment costs and declining demand for new construction projects.
One way savvy construction firms can drive bottom-line results is improving their tool and equipment management. According to a 2007 survey conducted by the National Equipment Registrar, contractors lose $300 million to $1 billion annually in decreased productivity due to lost or stolen construction resources.
Consider following the trail of a misplaced $80 grinder. By incorporating the time spent searching for the tool—filling out a loss report and procuring and delivering a new one—the cost came to a whopping $300, almost four times the grinder’s actual value.
This statistic doesn’t even take into account the possibility of missing project deadlines and exceeding budgets.
What’s a Construction Company to Do?Putting an effective tool and equipment management system in place to curtail these costly losses can dramatically and quickly improve any construction firm’s bottom line.
Hosted software solutions used to be a bonus feature for companies, but today they are necessary to manage tool and equipment costs. Implementing tool tracking technology to collect valuable data can reduce tool and equipment costs by 50 percent to 80 percent.
An effective tool and equipment management system:
- Decreases tool and equipment loss. Real-time data on where construction resources are at any given moment increases employee accountability, tool retention and productivity.
- Increases tool and equipment utilization. A systemized approach to managing resources lets managers know where tools are and to whom they are assigned, reducing tool loss and hoarding while optimizing materials’ mobility.
- Reduces new tool and equipment purchases. Effectively managing existing resources reduces the need to buy costly new tools and equipment before projects begin.
- Streamlines maintenance activities. Automating required maintenance activities boosts the lifespan of existing tools and equipment.
Software-as-a-Service (SaaS) SaaS models can provide real-time and secure data from any location. Easy and affordable to implement, SaaS models require no IT support, with a remote interface that enables users to continue using the software even when they are offline.