For capital projects, steady-state maintenance, or turnaround and outage projects, power and hand tools appear to be a minuscule expense compared to overall costs. However, project managers and planners would be wise to factor in tool availability, repair and replacement, and other variables when planning any project, as the supply and availability of these items are critical to the overall schedule.
Overlooking the supply and availability of tools and consumables because of their relatively low cost has proven to impact total cost and schedule severely, as crews become idle on-site without the necessary supplies. When budgeting for small tools and consumables, consider six key areas for ensuring the jobsite has the right solution in place to maintain efficiency and save money: repair and replacement, tracking, storage, maintenance, capital preservation and theft.
The first thing to consider is whether to own the tools or rent them for the duration of the effort. When making this decision, one first needs to consider the cost impact and actual need for every single person to own one of every tool, versus the advantages of a shared tool supply that is readily available to all personnel. Once this decision is reached, site management must consider the way repairs and replacements will be handled. Hand tools on-site are typically not treated with the care one might hope, and when combined with the wear and tear caused by their repetitive use and activity in potentially harsh environments, the need for repairs and replacement is inevitable.
If the decision is reached to own the tools instead of renting, there must be funds for purchasing additional tools included in the budget due to high loss and replacement rates. It's wise not to be overly optimistic when estimating these repair and replacement costs. If the tools are rented, make sure repair and replacement are covered as part of the rental agreement. If repair and replacement are not included in the agreement, make sure this additional estimated cost is included in your budget instead.
An all-inclusive inventory of tools is a luxury for any effort, but the benefits of an all-inclusive tool package are reaped only if that inventory is properly tracked. If the tools needed to get the job done cannot be located when needed, then despite your impressive inventory, you've pushed the schedule, which directly impacts the budget. If you own the tools, you will need to determine if your inventory is large enough to warrant assigning a full-time employee to manage it. To get the most out of renting, a rental program should include a tool-tracking system as part of the agreement.
Storage and tracking go hand-in-hand. The more storage space you have on-site and the better organized the tool inventory is, the easier it is to track the tools. In addition, the more tools you own, the more space you will need. While it may seem obvious, it's often overlooked how much space will be needed on-site for tool storage. Additionally, as some sites are spread out, multiple warehouse locations are sometimes necessary to reduce worker travel time and queue backups that can occur when using just one storage location. When the decision is made to expand to multiple warehouse locations, the need for tool tracking and inventory control becomes that much more important.
Although the cost of tools is small in the grand scheme of things, you can't get the job done without them. Effective maintenance of tools is vital to extending their life, protecting your investment and maintaining the safety of your employees. Whether tools are owned or rented, routine maintenance is essential, so a maintenance program for the tools must be considered and allocated in budgeting.
The cost associated with tools is not limited to the original purchase price. There is a ripple effect related to the overall cost of tools, including the repair and replacement, tracking and storage, to name a few. These costs compound and take away from the capital available for investment in other areas of the business.
Given that theft costs the construction industry more than $1 billion each year according to the National Equipment Register, it is understandable why the phrase "tools growing legs" is common. Without proper tool tracking, the likelihood of theft increases and can lead to a repetitive cycle of buying the same tools over and over again. This is an ugly truth that must be accounted for when considering renting or buying tools.
Every project is unique, so the decision to own or rent the necessary tools must be made by weighing all of the variables and individual factors at a facility or jobsite. Comparing and considering all the costs, benefits and risks associated with renting and buying tools will reveal the best path and ensure proper budgeting of tool costs.
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