Business owners are faced with many financial decisions daily. The problem is everything is presented as being necessary in order for the business to survive. Tool inventory control is one of those systems that many owners feel they can live without. While it feels good to be able to trust your employees with your expensive tools, taking one look at the yearly tool cost can convince any owner that there needs to be better control.
Many will hold off on inventory systems because of the cost. However, in a year or two, most will opt for a system because they begin to see the same purchases repeatedly due to loss, damage, or theft. Owners of service companies quickly realized the overwhelming cost of replacement is eating into their bottom line and preventing them from expanding.
Employees are not invested in the company like owners. Often employees see tracking systems as distrust by the owner. Especially as a small company grows, the employees that started in the beginning wonder why there is a need for control. Since they do not have to buy the equipment and tools that are used by the workforce, they do not have a stake in the costs. If a company shifts policies and requires all tools to be purchased by each employee, the cost factor is brought to their attention quickly. Stocking a single truck can cost tens of thousands of dollars. This is a big investment.
The systems vary in cost based on the features offered. Most of the systems available offer similar functions. They will all have a reporting feature, accounts for employees and warehouse, check in and out functions, and an audit control. Additional cost is often added through bar-code scanning equipment. The staff time for the initial setup should also be factored into the cost.
Overhead is managed easily with automated systems. Regardless of the services your company provides, having an automated system will provide much better cost management. The system can provide daily, weekly, and yearly information that will be helpful in managing costs, employees, and inventory.
The monthly audits are made easy. Since each item should have a bar-code, doing an audit of each truck, warehouse, and employee stock should be much easier. Simply using the wireless scanner, the staff can scan each item to verify its location. This fast audit capability helps manage the cost by making adjustments if items are not properly checked out or in.
Many companies have equipment replacement policies that cannot be enforced. The reason they are not able to enforce them is that it is often the warehouse staff statements versus the employee’s word. With an electronic control system, these arguments can be eliminated by simply producing a report. If the employee is to be held accountable for costs, there has to be a system that can be trusted to provide an accurate accounting.
Weighing the cost of tool inventory control systems is a matter of evaluating the past expenses due to loss versus the cost of the system. A system has a price and initial setup cost to be factored for the overall cost. After this, the savings begin.
