How Asset Tracking Helps Construction Companies Increase Revenue and Avoid Unnecessary Problems

How Asset Tracking Helps Construction Companies Increase Revenue and Avoid Unnecessary Problems

Construction might easily be considered one of the most active industries around, with frequent changes, updates, and movements of parts and people occurring every day both on project sites across the world.

As tools and equipment break down after sustained use, new ones are bought and shipped to job sites as replacements. As bids are accepted and new projects are taken on, construction materials and employees have shuffled around to new locations. And as warranties and certifications approach expiration, construction companies must be vigilant in making sure all equipment stays up-to-date.

Keeping track of all these moving parts can seem overwhelming without a solid organizational plan in place. And when you own your own construction business, asset tracking and management becomes a vital element in helping your business both run efficiently and stay on top of all your projects. Without an asset tracking method included in your daily operations, you risk losing precious work hours, valuable equipment, and even entire projects, all of which can add up to thousands to millions of dollars lost in potential revenue.

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For example, without proper asset tracking, construction companies are susceptible to losing large amounts of money to theft. In its 2014 Equipment Theft Report, the National Insurance Crime Bureau (NICB) and National Equipment Register (NER) estimated the total annual cost of stolen equipment was between $300 million to $1 billion. The most common types of construction-related equipment stolen included loaders, tractors, and excavators, with the average estimated value of a single piece hitting just over $46,000.

While the NICB and NER did note in their report that law enforcement helped find and recover over $6 million worth of stolen equipment, the success rate of recovery was lower than should make construction companies comfortable. Of 11,625 thefts reported, law enforcement, NICB, and NER were only able to conduct 2,633 recoveries, just 23% of all total reported thefts. With numbers like that, the construction industry is still open to losing roughly $231 million to $770 million per year, not to mention any revenue lost from decreased workforce productivity due to the missing items.

Unfortunately for construction companies, lost profits are only the tip of the iceberg when it comes to problems they will face without a robust, powerful asset tracking solution.

How a Lack of Asset Tracking and Management Negatively Affects Construction Companies

When businesses in the construction industry don’t properly track and manage their assets, they risk not only losing out on thousands to millions of dollars a year but also dealing with a flood of related issues. Construction brands without a solid asset management solution in place can expect to run across problems like the following:

Decreased Efficiency

A large drawback to not tracking assets in construction environments is the toll it has on efficiency. When the construction or project management can’t assign the needed amount of tools and equipment to a job because they’re unsure of the current status or availability of those items, the on-site workers won’t be able to complete their jobs efficiently, if at all. In turn, this can hold up other crews who might be involved in the project, resulting in an overall (and unnecessary) slowdown of work or deadline extensions.

Even traditional methods of asset tracking can cause inefficient work processes in construction. For example, if a project manager is just using a spreadsheet saved locally to his or her work computer to track equipment, tools, and the workforce, other members of the construction team won’t be able to easily access the information they need. Clunky, outdated asset programs or spreadsheets can also require a big learning curve for employees, some of whom may not be tech-savvy, which also reduces their productivity when they need to check in or out equipment if they care to do it at all.

Equipment Misallocation

Construction companies who don’t track assets will run into the problem of equipment misallocation. As noted above, when project leaders aren’t able to easily determine the availability and status of tools, equipment, and people, they won’t be able to accurately assign items and workers to specific jobs, which can again affect overall productivity and profits. Frequent misallocation could even result in a construction business losing jobs or shutting down.

As John Camarda of The Quorum Group notes, misallocation can also be compounded when a construction company is involved in multiple projects at once. Equipment can very easily be assigned to the wrong job site, and even too much equipment or tools could be sent to another project which doesn’t need all of it. “We’ll send a bunch of equipment to one site and more to another,” Camarda says, noting how his company could waste vital time and funds if it didn’t track exactly what equipment each project required.

Missing/Stolen Inventory

Tracking assets in any industry are key to preventing missing or stolen inventory. Particularly for construction, keeping track of your equipment, tools, and supplies can be the difference between thousands of dollars worth of machinery and materials being saved each year, as noted in the introduction. When construction businesses fail to properly catalog assets, this negligence increases the chance of employees stealing equipment from the company.

And it’s not just employees construction companies need to worry about. Many construction sites have little to no security, which means any regular citizen could walk onto a site and steal vital tools and supplies. Even heavy equipment and machinery can be stolen, as some manufacturers use universal keys, and all a citizen would need to do is go to the appropriate dealer and ask for a new key to be made.

Unexpected Equipment Maintenance

When maintenance records and warranties of equipment such as cranes and skid steers aren’t tracked in an asset management program, construction companies won’t know when they’re due for repairs, preventative maintenance, or even replacement. This means a single, unexpected maintenance issue could set back a construction project not just by hours, but sometimes days.

Even a tire, which might be easily overlooked in the midst of a larger building project, can cause major delays in progress if it were to blow, not to mention bring on unwanted costs. “When a skid steer goes down on a job site, it costs me at least $150/hr for a crew of four, plus we have a truck on site that we cost out at $20/hr,” explains Herman Ciardullo, president of Oakridge Landscaping. “It takes four hours for a service guy to come and change the tire. That’s $680 for a tire change.”

Downtime Costs

Misallocated, stolen, and broken-down equipment can also have a nasty side effect: lost labor hours. As noted in the first point, when construction employees aren’t able to find the equipment they need when they need it, they become inefficient. Many will simply stand around and wait until their materials arrive, losing your construction business precious labor hours. Even if your crew of 100 workers took one minute each per day to find equipment, you’d be losing 1.67 hours per day or roughly 417 hours per year.

This situation is even more problematic when the financial cost of those lost hours are factored in. Say your workers take home an average of $25/hour; this means you’re losing $10,425 per year to downtime. And if your asset tracking fails your construction crew to the point where each worker is spending up to ten minutes per day looking for what they need, you’d lose upwards of $100,000 per year in profit.

Compliance Violations

In a similar vein, when the maintenance of materials and equipment isn’t tracked, construction companies might be susceptible to violating state or organization-specific compliances. For example, if a skid steer isn’t running as optimally as it should be, it could be leaking oil or spewing harmful emissions into the air, both of which would violate state and Environmental Protection Agency (EPA) standards for clean air and ground quality.

Physical construction equipment and tools themselves can violate regulations and standards. If the ladders and ropes around a job site aren’t up to code, for example, a construction company could be found in violation of certain Occupational Safety and Health Administration (OSHA) requirements. Plus, crews might be forced to stop using a particular piece of equipment if inspectors can’t verify the last time it was re-certified due to improper asset tracking.

Safety Concerns

A final point, but certainly not least important, is the problem of safety when construction businesses don’t effectively manage their assets. A poorly-running crane or ready-to-snap rope could be the difference between an employee’s life or death. And unfortunately for the construction industry, OSHA found in 2015 that one in five worker fatalities across the private sector were attributed solely to construction.

OSHA also noted in late 2016 the top ten safety violations across all the construction companies they’d inspected. Some of the violations which occurred due to factors like poor scaffolding, ladders, and dangerous machinery, could be lessened (and more lives consequently saved) if construction businesses would implement better asset tracking and management solutions.

How Asset Tracking Helps Construction Companies Increase Revenue and Avoid Unnecessary Problems

How Asset Tracking and Management Helps Construction Businesses Avoid These Concerns

Construction companies have enough to deal with on a daily basis without having to worry about whether or not materials and workforce have been properly assigned to a job, or if the faulty equipment is liable to cause an injury or death. By implementing an asset tracking and management solution that’s flexible, effective, and easy-to-use, these businesses can reduce or eliminate altogether the problems mentioned above.

Here’s how a modern, powerful asset management solution can help construction companies:

Increases Revenue

An asset tracking solution will, of course, help construction companies save money in the long run by better tracking equipment usage, maintenance needs, fuel consumption, workforce availability/downtime, etc. A side benefit of this means companies more likely to calculate ROI and billing accurately, reduce unnecessary spending, and have a better idea overall of how to optimize operations, all of which can help to sharpen future job bids, as well.

Streamlines Allocation

Asset management solutions help construction teams better allocate workers, equipment, and materials to project sites. Knowing exactly where your equipment and team is, and what/who is or is not available, means you’re more likely to properly assign needed workforce and tools to multiple jobs at once.

Makes Reporting/Tracking Easier

Outdated methods of digital asset tracking like spreadsheets might be difficult for workers who have little to no computer or smartphone skills or experience to learn how to use (and without error). An easier-to-use, more streamlined asset platform will simplify the process of checking in/out and transferring tools between job sites, no matter the technical competence of all employees using the system, and will provide the ability for management to set up alerts, notifications, and automated reports about the status of equipment and materials.

Saves Time

An asset management tool can easily help construction companies save time across the board in terms of better tracking the day-to-day productivity of their workforce, as well as more quickly assigning equipment and materials to a project because they can see at a glance what is available to them. Automated asset tracking can also reduce the amount of time during report generation and audits, which would take much longer if they had to be conducted manually.

Reduces Maintenance Concerns

When maintenance schedules and reports are properly updated in an asset tracking system, management won’t have to worry as often about the likelihood of equipment breaking down without notice. Alerts and reports can automatically let management know when maintenance is needed, which reduces the possibility of needing last-minute, costly repairs or replacements.

Enforces Accountability

When construction teams diligently track assets, there’s less of a chance employees will resort to stealing your equipment if they know it’s being catalogued properly. Asset tracking also enforces accountability so that whoever touched inventory last can be held responsible if anything were to go wrong or missing.

Increases Safety

Tracking the maintenance and usability status of your equipment means you’re more likely to operate a safer business with up-to-date, certified equipment. This increase in safety could also result in reduced insurance costs as you prove you’re taking preventative measures to avoid injuries and mishaps.

Organizes Documentation

Using an asset management platform, you won’t need to deal with filing, and then later trying to find, physical documents like warranties and certifications. A capable asset tracking and management system will store these digitally, and will also be able to notify you of upcoming expirations so you can make plans to renew, replace, or re-certify accordingly.

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How Asset Tracking Helps Construction Companies Increase Revenue and Avoid Unnecessary Problems

How Asset Panda Can Work for Constructions Brands

Construction companies who’d like to avoid all the problems listed above and instead benefit from the perks of an asset tracking and management solution will get what they’re looking for with Asset Panda.

Asset Panda is a cloud-based software solution which can be used on either desktop or mobile devices for simple, easy accessibility for any user. Our asset tracking software is also flexible enough so you can customize it to your particular construction-related needs or project-related specifications. Our goal with Asset Panda is to help you work smarter by making asset management a less difficult and time-consuming part of your business. Current construction brands using Asset Panda’s software include TCD Civil Construction, Quorum Group, and Ralco Electric.

You can take advantage of Asset Panda’s free 14-day trial to see if our platform will work for your construction business asset tracking needs. You can also contact us for more information and a personalized quote.

 

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