Any construction project’s profitability depends on reliable, on-time construction material delivery. Delays in obtaining supplies, over-ordering, and problems with onsite material storage result in costly setbacks, and time is money, as the old adage says.
In the construction industry, there are five simple ways to increase profitability.
Profit margins are slim, but with a little time and work, you may reduce the expenses associated with standard on-demand ordering and supply chain management methods.
Here are five methods for improving material management on your job site to reduce downtime, increase productivity, and increase profitability:
1) Keep everyday ordering to a minimum.
Contractors frequently order materials on a daily basis to avoid having to worry about onsite storage, albeit this strategy has downsides. Sure, picking up your coffee order on a daily basis makes excellent sense, but the rationale isn’t quite as sound when it comes to construction materials.
Don’t pay for downtime.
Daily ordering not only exposes you to supply chain concerns, but it may also wreak havoc on your productivity if your critical supplies don’t arrive on time. After all, there are few things that will eat into your profit margin faster than paying your subcontractors and employees to wait for supplies.
Develop a detailed material management strategy with your suppliers to plan delivery ahead of time in accordance with your project’s timetable. Not only will this reduce downtime due to material shortages, but it may also allow you to take advantage of volume discounts based on the total volume of your orders rather than the smaller quantities you buy on a daily basis.
2) Make a request for construction material kits.
Don’t just rely on acquiring the materials you require when you require them. Request that your materials be packaged and sorted for each phase of your project by your distributor.
This procedure is known as ‘kitting,’ and it can help you reduce the amount of material handling at your building sites.
Remove the need for on-site sorting.
Having your materials packed by your supplier reduces the need for on-site sorting, which can quickly add up to significant project cost savings. Kitting can help your construction company run more efficiently by allowing you to spend more time building and securing new contracts and less time tracking down, sorting, and transferring goods.
3) Stay away from big shipments.
Bulk shipments are popular among suppliers for one simple reason: they make their life easier.
While obtaining goods on a daily basis isn’t ideal, ordering more than you require isn’t either. While buying in bulk can be a good idea for Super Bowl snacks or pandemic-related toilet paper hoarding, it is neither practicable nor profitable on the job site.
Bulk isn’t always preferable.
Any cost savings you could obtain by ordering in bulk are usually offset by the additional labor required to manage all that extra material. Because suppliers are essentially passing on a major percentage of their costs to you, they can give a discount on bulk shipments. Consider how much gasoline, personnel, and equipment it takes to deliver ten, twenty, or even hundred loads of material versus delivering the same volume of merchandise in a few runs.
When you total up all of the costs associated with material delivery, it’s simple to see why suppliers encourage contractors to accept huge shipments — and how the cheaper rates gained through bulk purchases don’t really stack up for you, the consumer.
Rather than accepting large-volume deliveries, negotiate with your suppliers to tailor delivery dates to meet your specific requirements. Paying a little more for materials in exchange for a safer, more efficient worksite is worth it in the long run.
4) Improve material management on-site
Material loss is a serious concern at any construction site, and this is especially true when dealing with unusual conditions like operating a construction site remotely.
Workers leaving your materials exposed and site security issues can cause damage to your inventory. These damages and losses may appear modest on a daily basis, but they can eat into your profit margins over time.
Put an end to looking for your supplies.
Poor onsite material management can result in exorbitant expenditures, but just not knowing where items are located means your staff will spend more time playing hide-and-seek with your supplies and less time actually performing the tasks for which they were employed. Worse, it’s all too usual for project managers to just reorder items that they can’t find, which results in significant cost overruns.
Concentrate on improving on-site inventory management to prevent material loss and damage, boost productivity, and raise profit margins. Depending on the nature of your project, you may need to rent a fence to safeguard your materials, hire a security guard to reduce after-hours theft, and designate certain personnel to track your orders in real-time.
5) Use Premier Slinger Solutions to increase your revenues.
Premier Slinger Solutions’ technology makes construction material transportation straightforward and stress-free, allowing you to take your business to the next level. There are no more long spreadsheets to sift through or laborious whiteboards to manage with Premier Slinger Solutions, and you can stop making phone calls, emails, and texts to track down your stuff.
With Premier Slinger Solutions, you’ll be able to work smarter, not harder.
Collaboration with numerous dispatchers and construction sector suppliers is simple with the Premier Slinger Solutions. Premier Slinger Solutions allows you to send, receive, and track driver responses in real-time, ensuring that you and your employees are never left in the dark about where you’re critical supplies are. You’ll know exactly when your orders will arrive, allowing you to better plan your projects, save downtime and increase profit margins.