How a Material Management Program Improves Profitability

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Did you know that only about 42 percent of the time on a job site is productive work? The rest of that time is waste. Identifying these areas of waste and reducing labor by just 5 percent has the ability to double a contractor’s profitability.

So what does this waste look like? 

Common waste activities include:

  • Traveling to and from a central storeroom or retailer for materials
  • Changing hand tools or batteries
  • Waiting for materials or instructions
  • Locating tools and verifying quality

Material management can reduce time in many of these activities. This can include spending less time moving equipment, walking, and using vehicles. Contractors won’t have to wait for materials and instructions, or spend time locating materials on the job site.

A job site material management program can improve the performance and profitability of a project. Having an established management program improves efficiency and cost savings for remote projects by eliminating waste in several ways. That way, you can recognize material management roadblocks and know how to avoid them. 

What can a material management program include?

A material management program can include several different services, tools, or technologies that reduce waste depending on the type of project and the limitations of the job site. Some of the more commonly used tools available from a distribution partner include:

Employees Utilizing Job Trailers For On-Site Material Management Purposes

Job Trailers

This is an out-of-the-box option for new construction, renovation, maintenance, or emergency response situations. Job trailers offer a flexible, secure and scalable solution to remote material management that can contribute to labor and material savings if used as part of your distributor’s supply chain strategy.

Products Placed in Material Carts for Quick and Easy Installation

Material Carts

Containers, either cages, clamshells, or toolboxes, are pre-stocked with inventory. Common items are put in the cart, rolled to the point of need, and returned full of unused cartons. Job carts save time because employees don’t have to waste time searching, waiting, tracking or securing material.

Products Being Checked for Accuracy and Damage at the Distribution Center

Stage and Store

For large project purchases, these can be brought into a central storage location to be checked for accuracy and damage by a distributor. The components can then be released to the job in preplanned segments, based on the project schedule.

This can be especially helpful with lighting projects because of the fragile components and significant packaging.

Employee Using Vendor-Managed Inventory Platforms to Track Inventory

Vendor-Managed Inventory (VMI)

VMI consists of customized services where your distributor takes responsibility for maintaining inventory at the facility. With information such as material estimates, drawings or historical trends, your distribution partner can plan for correct onsite inventory levels, minimum replenishment quantities, and a delivery schedule.

Considering Remote Job Sites 

The further a job site is from your supply base, the more strain that’s put on the material and logistics networks keeping your project running smoothly – all the more reason to coordinate your onsite inventory management strategy with your upstream supply chain partners. A quality, national distribution partner is best suited to manage this critical piece of your project management. With their ability to coordinate multiple suppliers and product categories, place inventory in key local or national locations, and release material when needed to avoid onsite stock-outs, a distribution partner is a must have for remote job sites.

Improving Profitability in Three Ways

Chances are high that you’re always looking for ways to improve profitability on your job site. Material management plans and job carts provide savings in three main ways.

1. Labor Savings

When all the material you need is stocked on a nice, organized cart, time spent searching and waiting for material is eliminated. This ultimately reduces project downtime by bringing material storeroom to a “point of use.” 

2. Material Savings 

As a contractor, you know that the most important thing is having the right material, at the right place, at the right time. Accurate inventory counts eliminate excess ordering. Confidence in material availability also eliminates hoarding.

3. Transactional Savings 

Automation through a material management program eliminates manual orders and call-ins. It makes it easier to maintain lines of approval and consolidate purchase orders (POs). Increased visibility also provides analytics and forecasting information for future jobs.

The Path to Profitability Starts With Eliminating Waste

Taking time to identify the areas of waste within your current process will open your eyes to new labor, cost and transactional savings. In addition, developing a material management program will help to reduce project waste by creating project-specific improvements, such as job trailers and vendor-managed inventory.

By partnering with a distributor on your material management program, eliminating waste and improving productivity can become a reality. 

Job Site Management Meets Demanding Deadlines and Saves Automation Company Over $280,000