The Impact of Asset Tracking on Construction Project Budgets
Oded Ran, CEO and Co-Founder of Clue since 2019, expertly integrates AI and data tools to revolutionize construction equipment management and maintenance, positioning Clue as a premier software choice in the construction industry.
Construction can be a complex process involving site handling, planning, coordination, and the ample amount of tools used in the process.
Oftentimes, construction project budgets can spiral out of control due to unforeseen expenses and mismanagement of resources.
However, with the rise in asset tracking technologies, this process has been made more straightforward, as project managers now have eyes on the site without being on-site at all times.
Asset tracking has proven to be an excellent tool for managing the construction project budget, as it allows the coordinators and facilitators to monitor their assets in real time, leading to a decrease in project delays and extra expenditures.
In this blog, we will examine how asset tracking can benefit not just a construction project plan but also how it can save money for contractors in the long run.
Benefits of Asset Tracking on the Construction Project Budget
As discussed above, asset tracking has many benefits for the construction project budget.
It is an excellent way of dealing with rising construction project costs and bringing them down by adding simple techniques and processes.
One more significant benefit of asset tracking on the construction project budget is:
Improved Inventory Management
Asset tracking in construction offers substantial benefits, providing real-time visibility into the whereabouts and condition of the equipment and materials.
Technologies like GPS enable project managers to monitor asset movement and usage efficiently.
This ensures that the assets are always available when needed, reducing losses and downtime.
All of this, over time, helps prevent unnecessary construction project costs and delays.
Enhanced Safety Measures
Safety is one of the most important factors to consider in construction, especially on sites where workers face heights and hazardous conditions.
Asset tracking technologies can enhance safety on site by integrating protocols and monitoring personnel locations.
During emergencies, asset tracking is a great help as it provides instant access to personnel and equipment data, leading to timely evacuation procedures and the deployment of safety teams.
Better Compliance and Reporting
When on a schedule for construction projects, you must comply with regulatory requirements to avoid delays and shutdowns.
This includes documenting asset usage, equipment maintenance schedules, and safety protocols.
Asset tracking solutions simplify this compliance by automating detailed reports and maintaining an audit trail.
All of this ensures adherence to legal standards and promotes transparency in the workplace.
Data-driven Decision Making
It collects and produces extensive data that can be utilized to identify trends, optimize resource allocation, and, most importantly, make informed decisions.
This information allows project managers to fine-tune strategies, allocate resources, and optimize operations more efficiently throughout the project cycle.
Managing a Construction Project Budget through Asset Tracking
Integrating asset tracking into construction project management supports accurate construction project accounting and estimation by enhancing efficiency, preventing losses, and optimizing resource usage.
These benefits contribute to maintaining budgetary control and maximizing overall project profitability.
Time Savings
It saves time in construction project accounting by automating inventory checks and reducing manual data entry.
Instead of manually tracking equipment and materials, project managers can access real-time data on assets under one centralized management system.
This allows faster updates to project budgets and timelines based on accurate information.
The time saved on these administrative tasks can be used for proactive project management and strategic decision-making.
Preventing Loss and Theft
Construction project estimating and losses can significantly impact budgeting due to theft or misplacement of assets.
Equipment theft is a big problem in the construction industry, causing an estimated $1 billion in losses annually.
21% of contractors claim that construction sites are robbed weekly.
Some of the most stolen equipment from construction sites include Wheeled or tracked loaders, Towables, generators, light towers, chippers, Excavators, Trailers, and RVs.
Thefts, apart from causing financial losses, can also lead to project delays and shutdowns. Asset tracking serves as a great way to deter this issue.
An asset tracking system immediately alerts teams to unauthorized movement, allowing quick intervention and preventing thefts.
Optimizing Equipment Usage
Efficient equipment utilization is crucial for maintaining construction project budgets.
Asset tracking systems monitor equipment usage patterns and performance metrics in real time.
This data enables project managers to identify underutilized assets or potential bottlenecks in equipment deployment.
By optimizing equipment usage based on actual project needs, managers can reduce unnecessary rental costs, minimize downtime, and extend the lifespan of assets.
This strategic resource management ensures budget allocations align closely with operational requirements throughout the construction project lifecycle.
Implementing Asset Tracking
Implementing asset tracking involves several vital steps to ensure the deployment and utilization of the system are efficient.
Setting Up the System
When setting up a new system, define your goals and requirements.
Select appropriate asset-tracking hardware (such as GPS devices or RFID tags) and software solutions based on your operational needs.
Install and configure the system according to manufacturer guidelines and ensure compatibility with your infrastructure.
Choosing the Right Technology
Choosing the right asset-tracking technology is crucial when picking software that works with your system and has the required features.
When selecting a new system, make sure to keep in mind these things:
- Your budgetary requirements
- Features it offers
- How it integrates with your system
- Will it scale as your project needs increase?
Keeping all these factors in mind, here are a few asset-tracking and equipment management software you can pick from.
Clue
Clue offers a centralized software platform to manage construction equipment and assets efficiently.
It integrates with existing telematics, GPS providers, and significant construction software.
The software is highly customizable and caters to the unique needs of various construction projects.
Clue stands out in the industry with its quick, risk-free implementation process, delivering rapid value to construction projects.
It is specifically tailored for heavy construction and provides robust asset-tracking features in a modern, user-friendly interface.
From equipment tracking and maintenance to dispatch, scheduling, and inventory management, Clue is a comprehensive solution that supports streamlined operations and enhances overall efficiency in equipment management.
Integrating with Existing Systems
Integrating the asset tracking system with existing management systems is crucial to ensuring that site operations remain seamless across departments.
This system integration allows data from multiple sources to be unified on one platform, allowing the user to access all data in one place.
To integrate an asset tracking system effectively, you must synchronize data and ensure compatibility beforehand.
This involves mapping data fields between systems to ensure seamless data streams.
Regular synchronization updates help maintain accuracy and reliability in reporting and analysis.
Construction companies can streamline workflows, enhance decision-making processes, and improve overall operational efficiency by integrating systems.
Training Staff
Training staff workers using the asset tracking system is essential if you want the system to integrate seamlessly and maximize its benefits.
Training programs for this system should cover various aspects, including the main functions, data input procedures, and troubleshooting techniques.
Employees must understand the system and how to navigate its essential functions.
Since data is crucial for decision-making and creating a construction project cost report, the workers must provide accurate data.
Training helps them understand the system and how to use it.
Training sessions should be interactive, allowing staff to practice using the system hands-on and address any questions or concerns.
Ongoing support and refresher training sessions can further reinforce understanding and encourage continuous improvement in system utilization.
Monitoring and Maintenance
Establishing protocols for monitoring and maintaining the asset tracking system is essential for sustaining its performance and reliability over time.
Regular monitoring involves periodic checks on hardware components to ensure they function optimally.
This includes verifying the connectivity of GPS devices, RFID tags, or sensors and promptly replacing or repairing any faulty equipment.
Software updates also play a crucial role in maintaining system integrity. Regularly updating the asset tracking software ensures compatibility with evolving technology and enhances system capabilities.
Addressing maintenance issues proactively minimizes downtime and ensures continuous operation of the asset tracking system.
Implementing a structured maintenance schedule and documenting maintenance activities are essential for tracking system performance and creating a new construction project budget, as you have the information available.
Advanced Asset Tracking Techniques
Advanced asset-tracking software techniques leverage technologies to enhance efficiency and accuracy in monitoring and managing assets.
These techniques are increasingly adopted across industries, including construction, to optimize resource utilization and operational effectiveness.
Here are several advanced asset-tracking techniques:
1. Using GPS for Asset Tracking
GPS (Global Positioning System) is widely employed for asset tracking, providing real-time location data.
This technology allows construction teams to monitor the precise whereabouts of equipment and materials, enhancing logistical efficiency and preventing loss.
Here's a complete top GPS provider comparison.
2. RFID and IoT Integration
RFID (Radio Frequency Identification) and IoT (Internet of Things) integration enable automated tracking and management of assets.
RFID tags and sensors communicate data over IoT networks.
This provides continuous updates on asset location, condition, and usage. This integration streamlines operations and improves asset utilization.
3. Predictive Maintenance
uses data analytics and IoT sensors to monitor real-time asset performance.
Construction companies can predict potential equipment failures and schedule proactive maintenance.
This can be done by analyzing operational data, such as temperature and usage patterns.
This approach minimizes downtime and extends asset lifespan, helping to enhance the efficient use of the construction project budget.
Real-World Examples of Asset Tracking Success
Case Study 1: AX Construction
AX Construction, a longstanding entity within the AX Group since 1975, encountered significant management challenges stemming from rapid growth.
These challenges included insufficient visibility across multiple job sites, compliance risks, and unplanned equipment downtime.
Relying on static spreadsheets added to these issues, leading to poor visibility, heightened compliance risks, and increased operational delays.
To address these shortcomings, AX Construction's IT Projects team proactively sought a comprehensive construction asset management platform, which was implemented to enhance tool visibility with real-time updates on over 2,000 tools and equipment items spread across various sites.
The platform centralized maintenance tracking and introduced proactive alerts to mitigate equipment downtime effectively.
Case Study 2: UK-Based Leasing Company
A UK-based leasing company specializing in heavy construction equipment faced challenges managing maintenance, improving customer service efficiency, and expanding sales channels.
They needed a custom software solution integrating construction asset management with CRM capabilities, enhancements for sales through Facebook and WhatsApp, and a website upgrade.
After addressing initial uncertainties and aligning expectations, a custom inventory management software was developed using Node.js, React.JS, AWS, and Docker.
A team of three specialists completed the project in five months using an MVP approach.
The solution centralized equipment management, reduced duplication, and improved control, migrating data from Excel spreadsheets to a centralized database.
Lessons Learned
Key lessons learned include:
- The importance of precise requirements definition
- Effective use of technology
- Adopting a robust approach for quick feedback
- Integrating and automating processes
- Setting quantifiable metrics for success
- Realizing the impact of digital transformation on business efficiency and growth.
Conclusion
Integrating asset tracking into construction project management is essential for improving efficiency, reducing costs, and ensuring safety.
Clue’s advanced features, including GPS, and IoT technologies, provide project managers with real-time visibility into equipment location and condition.
This enables proactive maintenance, minimizes downtime, and optimizes resource allocation.
Clue also helps ensure compliance with regulatory standards while improving overall project budgeting and profitability.
By streamlining operations and enabling data-driven decisions, Clue’s asset tracking system reduces delays, enhances productivity, and supports accurate budgeting.
Adopting these advanced tools not only meets the immediate needs of construction projects but also positions companies to excel in today’s competitive construction industry.
FAQs
What is the difference between a construction budget and a project budget?
A construction budget focuses solely on costs related to the physical construction phase. In contrast, a project budget encompasses all phases from planning to completion, including pre-and post-construction expenses.
How do you calculate a construction project budget?
You can calculate cost estimates for a construction project by estimating costs for materials, labor, equipment, and subcontractors, adding contingencies for unforeseen expenses, including overhead costs like project management fees, and summarizing these for the total budget.
How do you control a construction project budget?
Construction project budget control involves monitoring actual expenditures against the budget, analyzing variances, and managing costs through renegotiation or adjustments. You can do so by handling change orders carefully and maintaining transparent communication with stakeholders.
What is included in a construction project budget?
A construction project budget includes:
- Direct costs (materials, labor, equipment)
- Indirect costs (project management, permits)
- Contingency reserves for unforeseen events
- Profit margins
What are the four parts of a budget?
A construction project budget consists of
- Income (revenues or funding sources)
- Expenses (projected costs)
- Surplus/deficit (difference between income and expenses)
- Allocations (specific amounts designated for different purposes or activities).
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