Construction Resource Management Benefits Entire Organization

UPDATED AUGUST 25, 2020 -- More than tool tracking, next-generation systems deliver visibility over entire materials inventory

By Don Kafka, President, ToolWatch Corp.

In today's competitive business environment, it is imperative for construction firms to set themselves apart from the pack by implementing new strategies for managing their operations. As profit margins shrink and competition for key projects grows more intense, finding hidden ways to increase a company's bottom line is not only good business - it's a requirement. One trend, construction resource management, stands out as a key method for reaching such goals.

Construction Resource Management Explained

The term construction resource management encapsulates the complete process of managing tools, equipment, consumables and materials throughout a construction organization. Tracking, managing and leveraging these important assets has become increasingly important as companies compete and try to succeed in this fierce marketplace. Companies who adopt an effective construction resource management system improve not only warehouse and job site efficiency, but also key business processes and overall operational efficiency by tracking and managing critical business resources.

Enterprise-wide Benefits

Companies have long understood the impact mismanaged resources can have on an organization. From homemade spreadsheets to professionally designed software, companies in the know have used tools to help manage these assets for years. But improvements in enterprise level construction resource management systems now let companies not only manage these assets, but also leverage them for company success. And, sophisticated construction resource management systems allow companies to meet OSHA regulations and stay Sarbanes-Oxley compliant.

Construction resource management systems give companies a leg up in company-wide process management by putting the information each department needs to do its job into the right hands. Tool locations, replacement costs, repair information and billing rates are easily accessible through a secure central database, allowing the accounting department, for instance, to easily retrieve information that helps them create accurate job costing projections. Other departments like purchasing, project management, and equipment maintenance benefit as well with the ability to access information that helps them make better business decisions. And, today's systems can easily integrate into existing departmental software. The result is companies that can better plan budgets and projects to utilize financial resources for maximum yield.

Benefits from adopting the right system include:

  • Improved job site efficiency
  • Increased field productivity
  • Fewer costly interruptions
  • Improved employee safety
  • Improved financial performance
  • Minimized unnecessary tool, equipment and material purchases
  • Lower insurance premiums
  • Improved asset history that enables more informed purchasing decisions
  • Greater purchasing power through the ability to combine orders
  • Improved regulatory compliance
  • Improved financial controls and regulatory compliance

Finding a Construction Resource Management System

There are a wide number of options available when putting a construction resource management system into place, from those with basic functions only to enterprise level solutions with an abundance of features. Implementing an enterprise-wide system can seem a daunting task in a busy work environment, especially with a workforce not used to working with technology on a day-to-day basis. The right system will offer options to ease this process, ensuring minimal disruption. It is important to strike a balance between features like tool, equipment, material and consumables management at multiple locations and visibility of inventory to the entire organization. The system should also offer ease-of-use at a reasonable price.

While there are many tool tracking and accounting-based programs on the market, most focus on data that is input manually. Manual data entry is time consuming and highly error prone. In addition, the information tends to be outdated since there is a delay between when it is written down and entered into the system. Enterprise-wide construction resource management systems include features such as automatic data collection to eliminate errors and streamline the reporting process. Add to that software and tracking devices for warehouse, shop and field personnel, and construction resource management systems offer companies a complete solution.

Here are some specific features to look for in a system:

  • Technology: Powerful technology can improve data collection, but technology for technology's sake benefits nobody. Make sure that your systems uses technology in appropriate ways to help your business grow. Looks for bar codes, RFID, GPS (global positioning system) and other enabling technologies.
  • Construction industry specific: You'll reap the greatest gains when you work with a company that understands the unique challenges of your industry. Look for a system with features that fit your business.
  • Easy to use: Your workforce will be more than likely to accept using a new system when it is intuitive and applicable to their industry. System experts that train your staff will further increase its usability and acceptance.
  • Centralized access: Having a system with one central database for information offers access to users at the corporate office as well as those working from remote locations, such as job sites and satellite offices.
  • Security: You can ensure the security of your data by implementing a system that assigns different levels of permission for multiple users. Only the employees that need to see sensitive information such as company financials will have access.

Summing Up

Construction companies must find methods to differentiate themselves from the competition by increasing their operational performance. The trend toward using construction resource management as part of the operations process is quickly becoming the method of choice in this aggressive business environment. Implementing a construction resource management system streamlines the operations process, driving efficiency throughout the organization and increasing customer satisfaction and the bottom line. More and more construction companies are realizing productivity gains, reducing losses and improving financial performance by implementing a construction resource management solution that fits their business needs.

Don Kafka is the president of Denver, Colorado-based ToolWatch Corporation, a technology company offering construction resource management systems to organizations of all sizes. Its applications use the most current and reliable technology to manage resources including tools, equipment, materials and consumables for maximum utilization and productivity throughout an organization. ToolWatch's customers include 30 percent of the top 400 general contractors on the ENR400 list and 28 percent of the top 50 specialty contractors on the ENR600 list. For more information, visit or call 1-800-676-4034.