Business Tips

Top 6 inventory management best practices for contractors

Bryan Castellow

by Bryan Castellow

 

For trade professionals, leaving the job in search of a product or part is a loss of time and money. Whether you’re a residential plumber, an HVAC technician or a commercial contractor, having the right products on hand can help you work more efficiently. This is why it’s so important to develop an inventory management system that works for your contracting business. According to one report, 79% of businesses that streamlined their supply of products achieved revenue growth within their industry. Follow these inventory management best practices to help you develop a system to ensure you have the products you need, when you need them.

  1. Customize, but be consistent.

    Keep in mind that inventory management is not one-size-fits-all, so you should focus on finding the right solutions for your business’s specific needs. Whatever you decide, the key to implementing a successful inventory management system is consistency. If you have one tech who loads their truck in the morning for the day but have another tech who makes multiple trips back to your warehouse, then the inventory management system will not save time. Whatever solutions you use should be implemented consistently throughout your business.

     

  2. Audit your inventory.

    The first step in customizing an inventory management system is to take a look at the products you have, and then compare it to the products that you use the most. It’s likely that your vendors can provide you with a list of your most frequently ordered products. By looking for gaps in your inventory, you can automate your procurement process by creating a standardized purchase order for the products you know you’ll need.

    Pro tip: You can quickly find the last time you placed an order for a product and view your purchase history when you use Ferguson.com. Sign up for your account >>

     

  3. Upgrade your storage system.

    An effective inventory management system makes it as easy as possible to locate products. If your current storage system is cluttered or disorganized, then it’s time for an upgrade. Whether in your warehouse or on your trucks, a good place to begin is by stripping everything out and starting fresh. Then decide how you want to organize the products you need to store, such as alphabetically in storage bins or by frequency of use.

    Pro tip: Create a mobile storage system with five tips to help you organize your work van.

     

  4. Scan if you can.

    Instead writing out lists of products to order, you can combine barcode scanners and barcode labels to use with your new warehouse inventory management system and save time and labor. Scanning a barcode is faster and easier than manually writing down quantities and part numbers, and it cuts the chances of human error.

    Pro tip: Download the SKU barcode scanner app for free to turn your mobile device into a portable scanner.

     

  5. Consider hiring a stock manager.

    Depending on the size of your business and the amount of products you’re using, it might be more cost effective to hire one person to manage your inventory. Every hour that your techs spend counting stock or ordering parts is an hour that they could spend back on the job. And those hours add up. If your techs are spending a significant amount of time managing inventory, then having a dedicated warehouse or stock manager could be a wise investment.

     

  6. Ask your vendors for help.

    As mentioned above, your vendors can likely provide you with information about your orders. But they might be able to go a step further by taking care of your stock for you. This method, known as vendor-managed inventory or VMI, can help you save overhead by allowing your vendor to replenish your trucks and warehouse for you with their products, often by consignment. This means you only pay for what you use, and you won’t have to pay your crew to manage your stock.

     

Ferguson is your partner with inventory management solutions for your professional trade business. We can work with you to understand your business’s unique challenges, and help you develop and implement an inventory management system to boost your bottom line. Contact us to request more information about our inventory management capabilities.

Bryan Castellow, a Ferguson Search Marketing Specialist
Bryan Castellow

Bryan has been in the plumbing and HVAC wholesale industry for 22 years. As a National Account Manager with Ferguson, he works with residential trade contractors to help them with their inventory management needs.