Construction asset management is crucial for almost every business, and keeping track of tools and equipment of all shapes and sizes on construction sites can be tricky. However, knowing the best way to track both small and large assets will keep your business running smoothly.
Physical assets might include premises, vehicles, office and computer equipment, tools, manufacturing equipment and many other items. Intangible assets include immaterial resources such as copyrights, software and even reputation. But in general, a company’s assets are taken to be those physical items that are used to facilitate the ongoing operation of the business.
Some business types rely more heavily on physical assets than others. Manufacturing industries require machinery and plants, for example, although these assets are often fixed in the sense that they are permanently or semi-permanently installed in a single place. The construction industry, on the other hand, utilizes a wide range of vehicles, tools, and equipment that are generally more mobile and can be transported and deployed at different sites.
There are many reasons why asset management software can be beneficial, particularly (although not exclusively) in construction. Asset tracking can help prevent theft and loss of equipment. It ensures that the right assets are in the right place to help ensure the smooth running and completion of a project. The process provides accurate tool and equipment stock levels, while also helping to prevent equipment malfunction by managing maintenance and repair schedules. Tool and equipment management can also help avoid health and safety issues.
All types of tools and equipment can be tracked, managed, and safeguarded using asset management systems. But, large and small assets present different challenges that are worth considering.
Here are a few areas where asset management can help.
Theft and other risks on-site
Theft is a constant risk in the construction industry. In the US, statistics from the National Insurance Crime Bureau indicate that up to $1bn worth of equipment and tools are stolen each year. A study by insurers Allianz Cornhill suggested that theft costs the UK construction industry hover around £800m a year. According to the Kroll Global Fraud Report, over a third of construction, engineering and infrastructure companies worldwide have experienced theft of physical and stock assets over the past 12 months.
Relatively small tools and equipment are often targeted as they are more mobile and can be easier to steal. Larger assets are certainly not immune, however, and the Allianz Cornhill report found that more than £70m of construction plant equipment, including excavators, compressors and even cranes, was stolen annually in the UK.
Physical security measures – whether on site, in a vehicle depot or a tool crib – are obviously important preventative procedures. But tool and equipment tracking can play another important part in asset security. Visible tags can serve as a deterrent and can help in the identification and retrieval of stolen or lost items that have been recovered. Not all building sector theft originates from the outside and a tool management system that identifies where equipment should be and requires workers to check items in and out can help prevent internal theft, which is often on a small scale and involves smaller assets. Still, the costs from this type of crime can soon add up.
It’s important to track assets of all types and sizes, but there are different ways to do so, and some may be more suited to larger or smaller assets respectively.
Active and passive tracking
Tool and equipment tracking can be divided into two broad areas: active and passive. In active tracking, data is continuously broadcast without the need for human interaction. A GPS tracker, for example, can send up-to-date details of a truck’s location and route, along with that of any equipment they are carrying.
With passive tracking, a person or automated system must carry out a scan of the equipment. This could involve a worker using a barcode reader to scan the equipment before wirelessly transmitting the relevant data to a centralized database.
There are different costs involved with both options, and some companies might employ a mixed approach. For example, it might not be cost-effective employing active tracking on every last hand tool, but you might want that added security for a vehicle or large and expensive piece of machinery.
Types of tracking systems for construction assets
Some small businesses might rely on nothing more than a list on a piece of paper or perhaps a manually updated spreadsheet but, once a business gets beyond a certain scale, a proper asset management program is essential. There are different ways of implementing such a system and of tracking your equipment.
Barcodes are often the first choice for a business that is scaling up as they are generally familiar and relatively cheap. As well as an identification code, they might contain additional information such as a helpline number for recovered items. However, barcodes have a limited range and require a direct line of sight. They need to be scanned individually and might be more suited to mobile and lower value items.
Other tracking systems include Radio Frequency Identification (RFID), GPS and Bluetooth tracking.
RFID uses radio waves to communicate between a tag or smart label and an RFID reader. Mobile readers can be used either close up or from a moderate distance. Fixed readers can be located in a single convenient location, such as at a security point or site entrance. This can make it a good option for larger items that are rarely moved, but RFID also has uses for smaller equipment. As it does not require a line of site and radio waves can pass through many materials, it can be used to scan multiple small items that may be locked away or packed behind other items.
GPS is a good option for more expensive items and particularly vehicles, which can be tracked while in use.
Bluetooth, meanwhile, provides a flexible solution that can easily be scaled up or down. It can, therefore, be useful for both larger and smaller assets. It is similar in some ways to RFID. Both systems allow the user to write info to the tag as well as just reading it – as is the case with barcodes – but does not require the expensive readers to use.
Deciding whether to rent or buy tools and equipment
The deployment of an asset management system can also help inform your decision regarding whether to rent or buy, which is generally more pertinent when considering larger, more specialized or expensive equipment.
It often makes sense to own assets outright, especially if they will see regular usage over multiple jobs or a long period of time. When it comes to more expensive items, particularly those with a specialist on-site utility that are unlikely to see repeated use, it might be more beneficial to rent. Cost-effectiveness is often the primary factor, but there can be other considerations including current cash flow, maintenance requirements, liability and long-term storage and security arrangements. A thorough asset management system can help you to weigh these factors and decide whether renting or buying would be the optimum solution.
Carefully considered and implicated asset management policies will help ensure that your business remains profitable and efficient by protecting and monitoring the resources it relies upon.