So why does it matter? Controlling inventory is an important component of your operations. Inventory is one of the key inputs needed to complete the work and deliver value to your customer. Without it, you wouldn't be able to provide value.

The key is having the right amount of inventory at the right time. This is where inventory management can get complicated, especially for businesses that carry a large variety of materials or need large quantities. Project-based work as a roofing contractor adds a different dynamic than managing inventory for ongoing operations, such as vehicle parts.

An owner might think inventory management doesn't matter because material costs can simply be charged back to the customer. However, someone still has to order, track, store, and remove that inventory. Whether that is the owner, a manager, or an employee, there are real costs tied to that effort. While it makes sense to account for unforeseen needs in a project, it can be costly to build in arbitrary costs for "just in case" situations that never materialize. It's also not a great look when a customer notices more shingles were ordered than were used but still sees the cost reflected on the invoice.

The other issue is figuring out what to do with leftover inventory. It either gets discarded, stored, or forgotten. The most common inventory management issues can be subtle, especially in a busy operation.

For instance, you may forget to order enough nails and figure it's a relatively easy pickup from the local hardware store. Unfortunately, that extra trip creates delays because someone now has to leave the job site to get the material. Those additional trips add up over time, pushing out project timelines and delaying invoicing. For each individual project, this may not seem like much, but spread across dozens of projects throughout the year, it can add up to real dollars.

Another issue is not knowing where your inventory is when you need it. This can lead to someone purchasing more material because the original couldn't be found or because you assumed you were out of it altogether. This is a common problem across many contracting businesses. The time spent searching may not seem like much, but over time it adds up to less time spent providing the service your customer is paying for.

Fortunately, there are some quick ways to get ahead of the problem, even if your inventory is currently in disarray. Here are a few places to start:

Take Stock of What You Have

This is by far the hardest part of inventory management. Depending on your business, items may be stored in multiple locations. You may even discover tools or materials you didn't realize you had. This can be a great task for a newer employee looking to demonstrate leadership capabilities, albeit with oversight. Keep in mind that this might also trigger people who like to hoard their inventory. Make sure to reassure them that this is about not only helping the business, but helping make their job easier.

Create a spreadsheet with the name, description, location, and quantity of each item. Don’t go overboard on detail, but it should capture everything you have.

Determine Minimum and Maximum Inventory Levels

Identify the quantity you actually need for each inventory item and use the minimum levels as your trigger points for reordering. If the list is long, start with the high priority items and work through the rest over time. You may need to monitor inventory levels across several projects to better understand usage rates. It doesn't have to be perfect and can absolutely change over time. One consideration to help inform your levels is determining how long it takes to reorder materials and have them shipped.

Label and Organize Inventory

Label inventory and place it as close as possible to where it will be used when it makes sense. You and your employees should know where everything is and be able to locate it quickly. Running around looking for materials wastes time, creates frustration, and adds unnecessary effort. Eliminate that waste by making inventory locations obvious and easy to find. If employees are scrambling to look for parts and tools, whether it’s in their truck or in the warehouse, it’s an indicator that things may not be organized enough.

Clean It Up

Going through your inventory is an opportunity to identify items that need to be sorted, organized, or thrown away. This can be a fun exercise because it's often something everyone has thought about, but nobody has acted on. Determine what stays, what goes, and where everything belongs. Then take the time to clean up the areas where inventory is stored. If everything is in disarray, it's difficult to find what you need. That wastes time. This doesn't just apply to warehouses and storage areas. It also includes vehicles, trailers, and toolboxes. Also, if certain items or tools have sat for long periods, really question whether they're still needed. This is easier said than done, so work with your team and show why it may no longer be needed.

Start Small and Communicate

Don't bite off more than you can chew. Start with one area of the business and demonstrate some success before rolling changes out elsewhere. Bring employees along by asking for input and involving them in the effort. Don't overwhelm people at the beginning, so the experience feels positive rather than burdensome. Anticipate that some people won't want anyone moving their cheese. Bring these folks into the conversation early, explain the goal, and show them how they can help. Leaving them on the sidelines creates the possibility that they become your biggest naysayers.

Inventory management can feel like a large undertaking for any business owner, but there are a few things you can do sooner rather than later. The key is simply getting started. Make it manageable at first and build a culture around using inventory efficiently. Customers notice organization, and it reflects positively on your business. Start with one of the ideas above and turn it into a mini project. The important thing is creating forward momentum.