Beating Rising Material Prices: Why You Need Accurate Inventory Tracking in Your Scaffolding Business
Construction materials prices are at an all-time high.
Steel and timber prices in particular have risen significantly over the past 12 months due to rising demand and the continued COVID/BREXIT uncertainty. Unfortunately, this means a rise in the cost of every construction and scaffolding project.
In light of this, scaffolding businesses need to implement cost-saving strategies so that they can offer competitive rates to clients while remaining profitable. And since materials are so expensive, the wisest way to save costs is by making good use of the materials you already have.
How do you do this? Through accurate inventory tracking.
In this article, we will share three reasons why you absolutely need accurate inventory tracking in your scaffolding business, along with key features to look for when adopting an inventory management system.
Why You Need Accurate Inventory
Many scaffolding companies still use manual counting or Excel inventory tracking without realizing how inefficient they can be. These approaches are error prone, and lead to inaccurate project planning, underutilization of materials, and unnecessary equipment purchases. The lack of transparency and accountability often results in materials left behind on job sites or taken by unscrupulous individuals.
A better approach is to use scaffolding-specific inventory tracking software. This can help you monitor inventory counts, movements, and project estimates accurately with just a few clicks of your mouse. It’s a simple method, but can be a game changer in your scaffolding business. Let’s take a look at how accurate inventory tracking benefits your business.
Save Costs with Accurate Project Planning
Manually tracking inventory and recording it in “data silos” like paper files and spreadsheets lead to inaccuracies during planning, which causes last-minute scope changes and scrambling for equipment down the road. This is a costly burden as it increases freight, design, and also labor costs.
While this might be the norm for scaffolders, it can easily be avoided with better equipment planning. An accurate, real-time view of inventory helps achieve just that. Real-time inventory tracking and availability forecasting help you plan your work based on the equipment you have or will have at execution time. This way, there is less chance of having to purchase items last-minute or reworking your plans entirely.
Even if the project requires changes, you can implement them in cost-effective, efficient ways because you already know what you can work with.
Australian access management business, SMS Group Services achieved greater efficiency using this strategy. The company was struggling with constant changes. Once they adopted a reliable inventory tracking system, they were able to deliver projects more efficiently and save costs as they adapted to changes better.
Save Costs by Maximizing Utilization
Besides allowing you to make more accurate estimates, inventory tracking ensures your valuable materials don’t go to waste. You wouldn’t want any excess inventory to gather rust or go missing, affecting your overall profit.
With an accurate inventory tracking system, you can maximize inventory use because you know exactly what you have. Efficient tracking software can be used to generate inventory utilization reports, enabling you to monitor your utilization rate in real time. This means increased business efficiency and profitability, as you ensure all the valuable equipment you purchased is used.
This also helps you avoid unnecessary purchases. Many scaffolding companies waste precious time and money on project purchases, not realizing that they already have the equipment in one of their yards or on a job that is about to end.
Since materials are so expensive, you want to avoid this. Utilizing your current inventory is the best way to stay on top of costs.
To illustrate, Skyline Scaffolds Ltd increased inventory utilization up to 90% by using Avontus Quantify® , our industry-leading inventory tracking software. The results greatly impacted their profit, enabling the company to invest in more profitable, specialized equipment, and even purchase an additional $4 million in inventory.
Maximize Cash Flow with Accurate Re-rentals
Scaffolding re-rentals are a great way to maintain a steady cash flow without having to make new materials purchases. But they can be risky if not tracked properly.
You could easily lose a fortune due to lost or stolen inventory, as your rental bill swells with replacement charges. When a shipment arrives, miscalculations often occur due to the lack of verification against the shipment. This makes it difficult to capture over-shipments or missing components as they travel back and forth between yard and job site. Besides that, billing errors could also occur when there is no accurate inventory list, adding to the losses.
However, an accurate inventory tracking system eliminates these risks. It maximizes re-rental returns by ensuring a smooth, error-free transaction. In fact, it increases your profit margin by helping you set the best rental rates. Accurate inventory tracking does this by helping you compare the list price of your equipment purchases and set your rental price based on various factors such as average cost.
The benefits are proven. Scaffolding company Alltask Ltd reversed losses with efficient cross-hires. They started relying on an inventory tracking system that helps them monitor the movement of individual components and check stock balances across the business. When materials didn’t make it back from a job, they immediately flagged missing items and contacted clients about it.
Your Next Steps
Effectively tracking your inventory could make or break your business, especially during times of skyrocketing equipment costs. It’s a simple way to control costs and ensure maximum returns on your scaffolding investment.
Now that you know the benefits, here are key features to look for when choosing inventory management software:
- Complete inventory control that helps track equipment, orders, backorders, and re-rents accurately
- Scaffold-specific software that tracks jobs and materials across different locations like branch offices, laydown yards, staging areas, and job sites
- Seamless integration with accounting software for automated invoicing
- Seamless integration with design software for accurate drawing
- Centralized management of all info in one program
Avontus Quantify® offers all of that and more. Monitor inventory, generate estimates, ship materials, automate invoices, and manage re-rentals with just one powerful program. It’s the fastest, easiest way to manage your scaffold business.