Tool inventory management for contractors

The Contractors Guide to Tool Tracking

Why you are losing tools and what you can do about it.

If you provide tools to more than 50 employees, you could be losing more than 30% of your tool inventory annually. In addition to the replacement cost, consider how much time your crew spends looking for tools or driving back and forth to pick up tools. According to a study by, workers spend 90 minutes every day searching for tools. This amounts to a total of 18,000 hours per year for a company that has 50 employees.

However, if you are reading this, you already know that losing tools is a problem. There are several tool inventory management software products aimed at solving this problem. However, before we cover possible solutions, let’s discuss why you are losing tools.

Stolen tools are a reality we all deal with at times, but most missing tools are not stolen. According to a study by the Construction Industry Institute (CII), published in the Journal of Construction Engineering and Management, about 20% of lost tools are due to theft. Over half of lost tools are due to carelessness by employees and/or being misplaced by employees. These numbers look correct after spending over 25 years in the industry and the last three years working directly with contractors on this issue.

In other words, the problem is a lack of accountability for the tools provided to employees. If an employee is not clear about what they are responsible for, it’s no surprise that tools get left on a job or end up in someone’s garage. An Excel spreadsheet sitting in the office will be outdated as soon as employees leave the office, and it does not provide employees visibility to who is responsible for what tools.

Most small tool-tracking software solutions are focused on location tracking. Hilti, DEWALT, Milwaukee, and Bosch all offer Bluetooth tracking sensors for their respective tools.

If you are within a few hundred yards of tools on these systems (or if someone else with the same app open is), then you can view that tool’s location. This helps find misplaced tools on a job site. However, if the tool is out of range, it’s no longer helpful.

These tool management systems are also proprietary, which means that to use the system, you must have the newer tools from that respective brand equipped with their sensor, or you will need to purchase sensors and apply them to everything else you want to track.

GPS tracking works well for heavy equipment. However, GPS transponders are too large for most small tools and require a constant power source. As a result, GPS is not a feasible option for tracking most small tools.

Location tracking and other “passive” tracking systems appear ideal as they don’t require any action from the employee. However, as a result, it doesn’t address the core accountability problem. If the employee’s mobile app is not open and they are not near someone with the app, then you will not be able to find the tool. If you manage 500 or 1000 plus assets, purchasing and applying sensors to every item and hunting down missing items is still not cost or time efficient.

Other solutions include bar code tracking systems like ToolWatch and tool crib inventory management solutions like Toolhound. These tool and equipment inventory management systems are more accountability focused and use scanning barcode labels to document when tools are assigned to employees.

These software solutions offer many features for organizing and tracking tools, consumable inventory, and warehouse management. However, due to the cost and complexity, they are a better fit for large organizations with the resources to implement enterprise software. These systems rely on warehouse staff to track the inventory, as most field employees will not have the time to use this software on the job site.

TOOLTRIBE is an accountability-focused app designed to be used in the field on mobile devices and in the office. This visual, photo-based app provides real-time visibility and accountability to tools and equipment inventory in the field and in the tool crib.

Bar and QR codes can be used, or you can track items via a unique ID# and photo. Field employees can easily confirm accountability for their tools and have photos to prove what’s theirs and not. The cloud-based app updates the web admin(on a PC) in real-time, so you have an accurate view of your inventory by person and project at any point.

Below are a few keys to success to consider regardless of what tool-tracking system you choose:

First, you will need someone who can own and lead the process. Depending on the complexity of the software and the size of your business, this could be a full-time position or a part-time responsibility. This person can explain the process and help drive adoption across the organization. Most software solutions have admin roles that can override and make corrections as needed to keep the inventory updated and accurate, even if another employee doesn’t follow the process for some reason.

Second, it’s important to select the solution that’s the best fit for your business. Many of the companies we work with have tried other asset-tracking solutions in the past but were not successful. When evaluating solutions, it’s essential to understand what is expected of your employees to make the process work and have realistic expectations of what they can do without slowing down their core job.

Many asset management and inventory management solutions were designed for warehouse and office environments. These can require lots of text entry and buttons to press, which is not ideal on the job site.

Lastly, once you decide to move forward with a solution, jump in with both feet and get help if needed. We see companies that get started with a committed effort, get up to speed quickly, and have better adoption across the organization.

This will allow you to uncover any questions or help needed from your solution provider early in the process and ensure the product you selected will work for your business. Even if you start with a few key employees, this will set an example for the rest of the company and build confidence in the system.

We have seen companies that go from losing over half their inventory in a year while trying to manage their tools via spreadsheet to virtually no lost tools after implementing a clear and transparent process. Selecting the right software solution will help your crews as they no longer have to chase down the tools they need. Construction has enough challenges without worrying about where your tools are. Contact us if you need help keeping track of your tools and related inventory; we are ready to help you stop losing tools.

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