No matter how tightly you run your construction business, you’ll face issues when you have too much inventory. Getting excited and overstocking your inventory with materials faster than they’re selling can get you in a financial bind. If you’re experiencing an overflowing inventory warehouse, you have a few options to try to get your inventory under control.
Here are four ways to reduce your excess construction inventory.
Always Plan Ahead
The best way to reduce your construction inventory is by planning ahead of time. By having an efficient plan, you won’t have to worry about having too much or too little of a material or tool. However, if your inventory is overflowing, you should reevaluate your company’s needs and inventory management.
Determine the maximum time limit of a product or material sitting in the warehouse before taking action. Every item in your warehouse should have a different answer. This will also help you reevaluate your budget and give you an opportunity to look deeper at storage costs, lead times, and unpopular items.
Trade or Sell to Industry Partners
Building relationships within the industry is your best bet, not only for possible partnerships but also for trading and selling opportunities. If you have too many raw materials and supplies, your industry partner may know someone who needs them, or they might take them off your hands. This type of negotiation will help build stronger relationships and help with your construction site inventory management.
Repurpose Excess Materials
You can reduce your excess construction inventory by turning your materials into something else. By repurposing your materials, you can save money and have more products to sell to your clients. You can use materials like brick or concrete as a subbase or use excess insulation for the interior walls. You can even repurpose paints and use them as a primer coat.
If you have excess materials, try to find ways to reuse them before throwing them out or selling them. This way, you’ll reduce the amount of waste your companies produce.
Liquidate Your Excess Inventory
You may have to liquidate your materials if you have too much inventory and no other options. Identify which products and items you have in excess by using your inventory software to get an accurate number before acting. After making tough decisions and seeing what you have entirely too much of, negotiate with a liquidator so that they can purchase everything at a reasonable price.