How Tool Tracking Pays Off for Businesses
Whatever your industry, you can’t do business without the tools of the trade. The equipment and tools you use on a daily basis are how you create value and profit. That makes every tool an investment. The longer you have the tool and keep it in good condition, the more you'll get out of it.
That’s why so many trade businesses and other organizations are making tool tracking a priority. When you make tracking your tools a part of everyday operations, you can reduce loss and theft, ultimately getting more out of each asset you purchase.
In this article we’ll cover the benefits of tool tracking, which businesses need it, and how it works. Then we’ll go over how tool tracking software fits in and offer some tips for implementing a tool tracking system.
What is tool tracking and why does it matter?
Tool tracking is just what it sounds like: keeping track of your tools. While many tools are also fixed assets, “tool tracking” generally refers to how you identify and document where small portable equipment is.
To understand the difference, let’s consider an example. A plumbing company has many fixed assets (property used to create value for more than one year), including office furniture, a phone system, hand tools, and vehicles. In this case, tool tracking is concerned with tracking hand and power tools, not vehicles and furniture.
In some cases, a tool or set of tools will generally remain in the same place, such as in a workshop or in a single employee’s possession. On the other hand, more expensive tools or tools that you use less often might be shared by a team. Tool tracking is especially helpful for these assets.
For example, a plumbing company may have only one drain inspection camera (which allows them to visually inspect hard-to-reach pipes or areas). Tool tracking would ensure that, when this tool is used, there's documentation of who checked it out, when they used it, and whether they returned it to business headquarters.
Benefits of tool tracking
The simplest and most obvious benefit of tool tracking is that it helps your business keep an up-to-date inventory of your tools. When tools are labeled and scanned for use, you’ll always be able to find out who has which tool. If you can’t find an object, you’ll know who to ask. Depending on what data you store in your tool tracking system, you could even know what job site a tool might have been left at.
Tool tracking also helps you keep up with preventive maintenance and repairs of your tools. This will make your tools last longer, which means you get more for the money you invested. Keeping up-to-date records of the condition of physical assets will also help you estimate when you'll need to purchase replacements. You can then budget for that expense.
Accurate tool tracking can also be valuable when you need to make insurance claims. Your records provide proof of ownership that'll help you successfully process claims. For high-value tools, you can even track the depreciation in value over time and write off that value from your taxes.
Finally, an effective tool tracking system helps prevent loss and theft. When tools are labeled and checked out, they're more likely to be turned back in. Tool tracking that links tools to their users also makes employees accountable for the tools they use.
What do lost tools cost a business?
A lost tool is a tool you have to replace. That alone is reason enough to keep careful track of your tools. But there are also secondary costs to lost tools. If you lose a tool that you need, it may take time to acquire a replacement. This can delay entire projects, putting you off-schedule and over budget.
What’s more, if you don’t have the tools to complete a job, the customer may not be willing to wait for you. While you’re ordering the tool, they can just call a competitor who has it on hand. Tracking your tools helps your business run more smoothly, which allows you to focus on creating the best possible customer experience.
Which businesses need tool tracking?
Tool tracking is a specific type of asset tracking for businesses that use small tools, especially businesses that work in many locations. These are just some of the businesses that can benefit from tracking the tools they use every day.
Contractors and construction companies
The construction industry uses many tools, from simple hand tools to power tools. What’s more, construction sites are often out in the open and may have multiple different trade teams coming and going. Tool tracking helps ensure that individual tools don’t get left behind or get taken by the wrong team.
Plumbers and electricians
Plumbing is another business that relies on small tools. Depending on the kind of job, plumbers could be at one location all day or travel to half a dozen homes or businesses. The same goes for electricians. They also may be on construction or renovation sites with different teams.
Different plumbing and electrician jobs also require different equipment. For example, electricians may require a ladder or scissor lift to reach high fixtures. Tool tracking helps ensure these specialized tools don’t fall through the cracks.
The military has many different departments and functions, many of which need tool tracking. There is vehicle maintenance, building maintenance, weapons, medical care, and more. For each of these functional areas, the team needs to account for, maintain, and track their materials. Effective tracking is even more important for potentially dangerous tools, like weaponry.
Facilities and property management teams often perform a wide variety of services, which can involve many different tools. Like electricians and plumbers, facility managers and maintenance people often work on several sites on the same day. A tool tracking system can be especially helpful for large management companies which may service multiple buildings.
How tool tracking works
Tool tracking typically involves three main components: the asset tags, the scanners, and the software.
Each tool needs a unique identifier so that it can’t be confused for another item. This is what tool or asset labels are for. These labels can be as simple as a printed barcode sticker, but you can also use QR codes or RFID tags as your unique identifiers. Keep in mind, however, the wear and tear your labels will have to withstand. If your tools are being moved frequently or handled roughly, it's worth investing in durable asset tags with permanent adhesive.
Scanners or readers
With your tools tagged, you then need a scanner of some kind to read the tag. The scanner you need will depend on the kind of tags you use. For instance, many mobile devices can read barcodes and QR codes. RFID tags, however, need a more specialized reader. On the plus dies, RFID readers don’t require a direct line of sight because they identify tags using radio waves.
Asset tracking software
Finally, your asset management software brings it all together. This is the system that records information about each tool. Each time a tool is checked out, it should be scanned, which automatically updates the asset record. Later on, we’ll dive deeper into tool tracking software.
For tool tracking systems to work well, it’s important to set clear expectations of what information is to be recorded and when.
How to implement tool tracking
So how do you start using a tool tracking system? First of all, you need to perform your first tool inventory. This is when you determine which tools need to be tagged. You’ll tag each asset with a unique identifier. If you can, it’s a good idea to place tags in a similar place on each tool. This will make it easier for your team to find the tag.
Next, you then need to tie the tool’s unique tag to a record within your database. This is when you decide what information you want to store in each record. Some of the most common data points are the model, the date of purchase, and the financial value. RedBeam’s asset tracking system allows you to create custom fields, which means you can track whatever information matters to your business.
Once each tool is tagged and has a record within your software, the next step to implementing a tool tracking system is training your team and establishing protocols. The best way to ensure your employees correctly track tools is to set clear expectations about when and how tools need to be checked out or scanned. It’s also important to figure out who's responsible for scanning and tracking.
Once you have everything tagged and your team is using the tool tracking system regularly, you need to periodically audit your tools. This will help you identify which tools need repairs or maintenance. It'll also help you plan for replacements and identify any losses.
Like scanning and checking out tools, it’s best to set a standard for how often you perform asset audits, whether that’s once per quarter, annually, or any other cadence. Effectively tracking your tools is an ongoing project, but it pays off in increased efficiency and decreased loss.
Tool tracking software
As we mentioned, the software you use is a vital part of how well your tool tracking system works. Simply put, your asset tracking software is the database that holds all your asset records. Tool management software should make it easy for you and your team to monitor and maintain your tool set.
As we mentioned RedBeam in particular allows you to create custom fields to make sure your records have the data you need. RedBeam also works with a range of different asset tags and scanners, including mobile devices, like those made by Zebra.
Part of the value provided by asset tracking software is in the reporting and analytics. The data you collect about each asset can be used to estimate lifetime value, budget for replacements, and calculate depreciation. Some organizations, like those in government or education, need to maintain compliance and share records. RedBeam users can create customized reports to quickly and easily deliver to auditors.
An asset management solution probably won’t be the only software your business uses. Look for a system that easily integrates with your other tools. Tracking software that offers APIs allow you to connect the system to almost any other tool.
Ease of use is also an important consideration when choosing tool tracking software. If your team doesn’t understand how to use a system, you’ll have trouble getting them to use it, let alone use it correctly. RedBeam has an intuitive interface that'll make it easy to train your team and get buy-in from all stakeholders.
Maximize the value of your tools
When your business relies on tools or special equipment to get the job done, you can’t afford to spend time and money searching for and repurchasing tools. A tool tracking system helps keep your team accountable, keep valuable assets in working condition, and prevent loss and theft.
Intuitive tool tracking software is key for implementing tracking and getting your employees to adopt the system. Look for a system that allows you to track the data that matters to you and keep detailed histories of how tools are used.
Ready to see how RedBeam makes tool tracking easy and efficient? Schedule a free demo to see how we can transform your business.