Keeping track of company-owned tools has never been an easy task, even for very small firms. And for large organizations, effectively managing tools is a huge undertaking.
“I started with our company as a driver,” said Rob Cherry, president of Osborne Electric in Oklahoma City. “The older generation running the company then said that keeping track of tools was an age-old problem and one that would never be solved.”
Today Osborne Electric and other companies are using computer-based systems to help them not only know where tools are, but to provide other valuable information to help manage their tools and equipment.
Two companies—QuickPen International and ToolWatch, both based in Englewood, Colo.—are primary suppliers of tool management systems. Both companies provide training in the use of their products.
“Many companies do not track their tools and equipment, because for years they have accepted losses as costs of business,” said Patrick Holton, QuickPen regional sales manager. “In the past it was very difficult to monitor tools, but with the systems available today, they can be tracked accurately and efficiently.”
Don Kafka, president of ToolWatch, cites three primary benefits of tool management programs:
• Tracking systems immediately and significantly reduce tool loss; many companies who use computerized tracking systems report tool retention above 90 percent;
• The programs reduce stress of personnel responsible for tools and for the field personnel who use tools on a daily basis;
• Data provides information to effectively measure areas of performance such as utilization of assets, performance of personnel and project profitability.
A basic tool management system includes a Windows-based software program designed to run on computers the company already owns, a handheld data scanner and docking station that plugs into the computer serial port, and barcode labels that are placed on each tool or machine to be tracked. Larger organizations usually have multiple scanners that can be used in the field.
About 10 years ago, Osborne Electric went from a wall pegboard with washers representing tools to computerized tool management. Information in the system includes a description of each item, date of purchase, repair log, repair schedule and where the tool is located.
“The system is very straightforward,” said Osborne President Rob Cherry. “Tools are identified by barcodes and when one leaves the office, it is scanned with a handheld wand. When it comes back or moves to another job, that information is entered into the system.”
Because barcode stickers can come off, tools also are engraved with the barcode number and company name.
Osborne marks everything from trucks to gas cans.
“Every item is important,” said Cherry.
As other contractors report, keeping track of tools moving from job to job is a continuing problem because information often isn’t entered into the system. Cherry believes this a symptom of a larger issue.
“The biggest problem has been getting employees to buy into the program,” he said. “It is a great system, but it has to be used correctly. Warehouse staff, project managers, foremen, journeymen and apprentices—all are involved. Management must define expectations and the consequences for not complying. We have a written tool policy and conduct quarterly meetings to discuss it. We prosecute theft, but what will be done when someone forgets to check in a tool or takes it to another job without entering it into the system? There must be consequences for not following procedures, and management must define what they are.”
In addition to tracking, Cherry said the system helps monitor condition of tools and equipment, the number of repairs that have been made and status of warranties.
“It helps identify problems and lets us know when it is time to replace an item,” said Cherry.
Taft Electric, Ventura, Calif., began implementing its current tool management program about 18 months ago. Historically, the company used a handwritten log to keep track of tools.
“Before I joined the business, a computer-based system was tried, but it was not successful,” said Jim Marsh, executive vice president. “We then went back to the handwritten log.”
The system in use today is from another supplier, and Marsh said the program is working well.
“The software is pretty straightforward, but it took a lot of time to enter data,” he said. “Our old handwritten records were not 100 percent accurate, so it was a big undertaking. Although there are still some minor problems, we are up and running and are continually improving implementation of the system, which has proven to be much better than the log.”
Moving tools from site to site can be a continuing problem when field personnel do not report the transfer so that it can be entered in the system. But most of the staff has accepted the program and understand its benefits, Marsh added.
Taft Electric classifies tools by categories: small tools (excluding non-powered hand tools), large tools, testers and locators. Each is identified by a barcode and a separate identification number is etched into each tool. That ID designation is consistent with the numbers used in the old log and is separate from the barcode number. Information in the system includes type of tool, brand, serial number, date of purchase and cost, condition and repair status.
Marsh’s advice to those considering a tool management program: “Be clear why a tool management system is being put into place. Understand the benefits of increased foreman accountability and better-quality tools on job sites, which improves productivity. Assign someone full responsibility for implementing the program, and leave them in control until it is in place.”
Coghlin Electric, Worcester, Mass., is a veteran in computer-assisted tool management. Specialized software wasn’t even available 25 years ago when the company initiated its first program, and Coghlin now is using its third generation of tool management software.
“We’ve been at it a long time, and our employees accept the system and the importance of properly utilizing it,” said Ted Coghlin, president. “The biggest issue is getting tools checked back in the system. We know where a tool went and who had it, but if it is not checked back in, we lose track of it.”
Tools moved from one job to another also can be a problem.
“In the rush of business, recording tool transfers from job to job is not a priority,” said Coghlin. “Electricians and foremen need the tool immediately and put off paperwork until later. However, laptop computers and interactive PDAs are helping solve this problem.”
Also difficult, Coghlin continued, are large jobs with several groups of electricians from different areas who may not be familiar with tool tracking programs or who don’t recognize the importance of using one.
Coghlin enters tools costing $150 or more into the tracking system. Each tool is identified by barcode and a two-alpha, seven-number designation. Barcodes are on metal stick-on labels; the ID is engraved on hand tools and painted on larger items. Information inputted includes tool description, date out, date in, billing cost per day, days billed and total amount billed. In addition, the system identifies tools that need repairs.
Before implementing its first computerized system, Coghlin had a large board with a tag for every tool. When a tool went to a job, the tag was moved to a rack. Punch cards were used for the first computer system.
A tracking system takes time to set up, field staff must be educated in its use, and the whole company team needs to buy into the decision to implement a tool management program. Once all coding and marking is in place, the system is easy to manage, although regular reviews of information are needed.
Coghlin Electric has also devised an innovative way to use its Web site in its tool management program.
A tool “catalog” for employees is included on the site. Foremen can access the site for information on tools and order tools directly from the site. Orders are filled by the warehouse staff and entered into the system.
ToolWatch and QuickPen say that electrical contractors, along with mechanical contractors, are the largest users of their tracking systems. Kafka said more than 3,000 ToolWatch systems are in use and estimates about one third are operated by electrical contractors.
Considering the benefits, why don’t more companies utilize tool management programs?
“Perhaps the biggest obstacle is the reluctance to take the time to locate their tools and put them into a system,” said Holton. “I talk to a lot of organizations about the need to track tools and reasons for not doing so center on the belief that it is too difficult. Many think tracking methods are cumbersome, time consuming and require massive data manipulation. They think systems required specialized user abilities or training and are concerned about the learning curve; and because most assets are mobile, they are concerned that tracking will require extensive communication between tool management personnel and tool users.”
Regarding data entry, ToolWatch’s Kafka said his staff recommends starting with the items that are causing the most problems.
“If you are losing portable drills, start there,” he advised. “Then work your way down the priority list. As new items are purchased and projects are completed, tools are entered into the system and tracked. As soon as a company begins tracking tools, they immediately start to see gains in productivity and reduction in tool loss.”
However, Kafka thinks resistance to change is the major reason for not adopting a tool tracking program.
“We find many customers did not understand what failing to manage tools and equipment was really costing their company in terms of tool loss, lost productivity, aggravation, etc. Once management understands the value proposition and they see what the return will be on their investment, they are more likely to be supportive. When management is solidly behind a program, everything starts falling into place.” EC
GRIFFIN, a construction and tools writer from Oklahoma City, can be reached at 405.748.5256 or firstname.lastname@example.org.