• Construction & Engineering  |  Digital Transformation  |  Inventory Management  | 
  • 4 Min Read
  • Achieving End-to-End Inventory Visibility in Construction and Building Materials

    Mike Davis

    Written by Mike Davis
    Thu, Feb 27, 2020

    Overview

    • Multiple factors are stressing the construction and building materials supply chain, including complexity, dispersed locations and labor shortages
    • 80% of construction professionals say mobile technology is a priority, despite the industry’s heavy reliance on manual processes
    • Mobile barcoding solutions can overhaul inventory management and drive growth

    Manual data entry and paper-based processes don’t allow construction and building materials companies to scale inventory processes or grow.
    Manual data entry and paper-based processes don’t allow construction and building materials companies to scale inventory processes or grow.

    The construction and building materials industry face vast outside stressors. Companies must navigate increasingly complex global supply chains, dispersed manufacturing and ongoing skilled worker shortages.

    With added strain from trade uncertainties and subsequent market swings, companies in this sector must find ways to adapt and reduce operating costs to stay profitable.

    Inventory management is one area where companies in construction can offset these stressors and increase profit margins. Many are turning to inventory technology, such as mobile barcoding, to achieve much-needed control and visibility in their operations.

    In fact, 80% of construction professionals say mobile technology is a high priority, but just don’t know when or how to adapt it to meet their needs.

    The Problem: Outdated Inventory Tracking

    Construction and building materials companies must handle large volumes of inventory each day, often across multiple sites, cities, states or even countries. They have traditionally relied on manual data entry and paper-based recording processes to manage inventory. This opaque method lacks the timeliness needed for today’s interconnected supply chain, resulting in unintended, costly data inaccuracies and inefficiencies.

    Challenges in Using Manual Processes

    Manual data entry leads to inevitable human errors in counting and transcription. Even mistyping one character into a spreadsheet at a workstation, when repeated by numerous workers across each site, creates significant discrepancies. You simply can’t trust that the numbers in your ERP are accurate or up-to-date. And without immediate, multi-site, real-time visibility into on-hand inventory, even the largest, highest value inventory items can be easily lost, misplaced or double-ordered.

    This inefficiency has downstream effects on labor utilization as well. Workers must complete repetitive, labor-intensive cycle counts which can lead to burnout. And since manual processes aren’t scalable, companies must add additional workers to increase production – a difficult task in today’s stretched labor market.

    Challenges in MRO Inventory and Asset Management

    Increasingly complex global supply chains and volatile markets mean companies need to find savings when and where they can.
    Increasingly complex global supply chains and volatile markets mean companies need to find savings when and where they can.

    Most construction and building materials companies must maintain large spare parts warehouses to ensure they have parts on hand when and where equipment breaks down. These warehouses are often spread out, dirty and disorganized, making it difficult to locate the right tool or part in a timely manner.

    Tracking the high-value assets that these parts service is similarly challenging. You may have large volumes of high-value machinery or consumables at remote sites that need to be accounted for and maintained. But without the ability to capture each asset’s location accurately and in real time, assets may be underutilized or sit in disrepair. Or, if you can’t find the spare parts or tools to perform scheduled maintenance, it can lead to significant unplanned downtime and may build a backlog of maintenance work orders.

    The Solution: Modernizing Construction Inventory Management

    Modernizing inventory with mobility and automation is one way construction companies can successfully address these day-to-day challenges and stay ahead of more uncontrollable outside forces.

    Using mobile barcoding technology, you can mobilize inventory transactions to minimize opportunities for human error. By extending your ERP to point-of-work, using mobile devices with mobile apps, employees can capture data or transact through a series of focused, validated steps – with perfect accuracy and in real time.

    With complete visibility into your inventory, you can reduce the overstock and labor-intensive recounts for increased accuracy, efficiency, productivity and job satisfaction.

    Mobile barcoding software can also communicate with other devices that send or receive data, connecting IoT/IIoT devices, RFID, automated material handling devices, MES, TMS, WOM, other databases and business systems. Doing so further harmonizes and evolves your operations to meet present and future construction and building materials needs.

    Read Use Case: How Continental Materials Overhauled Inventory Management »

    Modernizing MRO Inventory and Asset Tracking

    Construction and building materials companies can take the same approach to MRO and asset management as traditional inventory management.
    Construction and building materials companies can take the same approach to MRO and asset management as traditional inventory management.

    By approaching construction MRO and asset management with the same mindset of modernization, companies can gain the same degree of control and oversight as with regular inventory. As with construction materials, companies no longer need to maintain an overstocked spare parts warehouse as a failsafe against unexpected downtime.

    Accurate data and complete transparency into item location, bin number, condition, etc., ensures workers have the tools and equipment they need, when and where they need them to do their jobs. This becomes especially critical when monitoring multiple sites and operation types.

    Read More: Tracking Fixed Assets Across the Modern Supply Chain »

    Enhancing visibility and accuracy is especially important for vertically integrated companies wishing to modernize. Grupo Cementos, a global leader in the manufacturing of cement and distributor of concrete for the construction industry, offers a useful case in action.

    As part of its daily operations, managers oversee raw material harvesting and mining, consumption of raw materials into finished products, storage and distribution of finished goods and spare parts inventory for plant MRO.

    However, its use of opaque manual processes forced managers to overstock inventory to anticipate shortages, resulting in unsustainable capital expenditures.

    By strategically replacing this manual system with a mobile barcoding solution, they reduced:

    • Spare part stock levels by 10- to 15%
    • ‘Out of Stock’ parts by 10%
    • On-hand inventory 10%+

    With these reductions in on-hand inventory, Grupo Cementos achieved significant cost savings, freeing working capital for other projects.

    Building Supply Chain Stability with Inventory Practices

    Today’s volatile market means companies must do what they can to build stability into their supply chain, preparing for present and future challenges. For industries, like construction, that run on inventory, parts and equipment, but lag in modernizing inventory best practices, technologies like mobile barcoding may be the answer to ensuring continuing profitability.



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