The true cost of tools: 6 factors affecting construction and maintenance industries

For capital projects; steady-state maintenance; or plant shutdown, turnaround, or outage projects, power and hand tools at first appear to be a small expense when compared with the overall cost.

However, project managers and planners would be keen to factor in tool availability, repair and replacement, and other variables when planning for any project. As the post-COVID supply chain disruptions have shown, supply and availability are a critical component of any project. When considering the cost of tools and consumables, the actual cost is miniscule compared to the impact their availability could have on the overall schedule.

Overlooking the supply and availability of tools and consumables because of their relatively low cost has proven to severely impact the total cost and schedule as the crews become idle at site without necessary supplies.

When budgeting for small tools and consumables there are six key areas to consider to ensure the job site has the right solution in place that can maintain efficiency and save money.

1. Tool repair and replacement

The first thing to consider is whether to own the tools or rent for the duration of the effort. When making this decision it is vital 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 it is decided, the site must consider how repairs and replacements will be handled. Unfortunately, laborers often do not give hand tools the care one might hope. 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 you decide to own the tools instead of renting, be sure to reserve funds in the budget for purchasing additional tools to offset the loss and replacement rate. It’s wise to not be overly optimistic when estimating these repair and replacement costs. If you opt to rent the tools, it’s a good idea to include repair and replacement as part of the rental agreement. If repair and replacement are not included in the agreement, make sure this estimated additional cost is included in your budget instead.

2. Tracking

An all-inclusive inventory of tools is a luxury for any effort, but you reap the benefits of an all-inclusive tool package only if that inventory is properly tracked. If the tools needed to get the job done cannot be located when they’re needed, then despite an impressive inventory of tools, you’ve pushed the schedule, and this directly impacts the budget.

Depending on the volume of tools, maintaining a tool inventory onsite could require a full-time person to track the tools being issued and their location. If you own the tools, you will need to determine if managing a large inventory warrants assigning a full-time employee to manage the tools. To get the most out of renting, a rental program should include a tool tracking system as part of the agreement.

Another option for onsite tool management is to engage AMECO’s StrikeForce program for Tools & Supplies. StrikeForce project-based Site Services management is the best way to get all of the tools your crew needs on site delivered, stocked, managed, and serviced.

3. Storage

Storage and tracking go hand-in-hand. The more storage space you have onsite 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 will be needed. While it seems obvious, the amount of space that will be needed onsite for tool storage is commonly overlooked.

Another thing to consider is how large your site is. If it’s spread out, the need for multiple warehouse locations or tool cribs is 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 become that much more important.

4. Maintenance

As mentioned earlier, although the tool cost is small in scheme of total installed cost, without them you can’t get the job done. Effective maintenance of the 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; therefore, a maintenance program for the tools should be considered and allocated when budgeting.

5. Capital Preservation

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. These costs compound and take away from the capital that is available for investment in other areas of the business.

6. Theft

Unfortunately, the phrase “tools growing legs” is common and usually met with a laugh. 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 is relatable. Without proper tracking of tools, 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 discussed and considered when weighing which option to go with when deciding to rent or buy tools for an effort.

Every project or planned maintenance effort is unique. Therefore, 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 job site. Comparing and considering all of the costs, benefits, and risks associated with renting or buying tools will reveal which is the best path and ensure proper budgeting of tool costs. AMECO has more than 75 years of experience supporting capital construction, shutdown, turnaround, and maintenance operations of all sizes across North America.

Learn more about AMECO’s flexible tool and supply programs. Or contact AMECO for a tool program consultation.