Plumbing Inventory Management: Actionable Tips for Contractors

What is Inventory Management?

Inventory management involves tracking stock and materials, monitoring their availability and pricing, and ensuring you have enough to meet work orders without overstocking. This requires careful planning, accurate forecasting, and tracking of inventory levels. 

Proper inventory management allows contractors to better manage their resources, increase efficiency, maximize profits, and provide better customer service.

Why is Inventory Management Important for Plumbing Companies?

Inventory management is an essential part of running a plumbing company, as it helps companies ensure they have the supplies necessary to complete jobs without wasting time or money on excess stock.

For customer-centric businesses like plumbing companies, providing outstanding customer experiences is imperative. Effective inventory management can help plumbers to better anticipate customer needs and order the right parts in advance, reducing wait times and improving customer satisfaction. 

Also, businesses with complex supply chains can find it challenging to handle overstock and shortages. Inventory management allows companies to track inventory, identify ordering trends, and better manage their supply chain. This helps avoid costly back orders and ensures that customers have the parts they need when needed.

How Much Inventory Do I Need?

The amount of inventory you need will depend on various factors, including the size and scope of your business, the number and type of jobs you handle, and the frequency with which customers order parts. Generally, plumbing companies should strive to maintain sufficient inventory to meet customer needs without overstocking.

You should track your sales and ordering trends over time to determine how much inventory you need. This will give you a better understanding of your customer needs and what parts are typically ordered in what quantities.

Minimum quantities and replenishment levels can help you determine how much inventory you need. 

By looking at the last six months of customer invoices, you can easily notice which parts you use more often and figure out the right minimum quantities. 

After that, you should determine how much it takes for each part to be replenished by suppliers to be able to carefully plan your orders. 

Since every business has unique inventory requirements, you must adjust these strategies to meet your needs.

Inventory Management Tips for Plumbing Contractors

We know that plumbing inventory management can often be challenging. 

That is why, in the following paragraphs, we provide some key inventory plumbing management tips that will help you avoid late restocks and avoid missing another sale opportunity.

Tip #1: Create an inventory system

As a plumbing contractor, having an inventory management system can help you have structure and clarity. Tracking stock levels and identifying ordering trends through an inventory system will allow you to better manage your inventory and ensure that you always have the right parts on hand when customers need them.

Follow these two steps:

1. Determine where you will store your inventory: Whether you store your stocks in a warehouse or storage van, determine this detail from the beginning.

2. Determine how to label parts and materials: This can involve labeling your storage bins with barcodes that techs scan when the product is used for an order.

By following these steps, you will maintain inventory in a much more organized and professional manner. 

Tip #2: Plan inventory reviews

Making inventory reviews part of your routine will help you better manage your inventory. For regular stock reviews, you want to check the items and quantities you're holding on to and the period for which you do so. Determine items you use sparingly and consider buying them on a need basis to avoid overstocking. 

By planning inventory reviews, you can also identify items running low and need to be restocked so that you always have the materials your customers need.

Tip #3: Monitor restocking needs

After reviewing your stock and determining which items you use most frequently, it's time to find ways to easily purchase and restock them. You can create lists or templates for each item to help you easily track and purchase items as needed.

In addition, you can use technology to monitor restocking needs and ensure that you have the necessary parts and materials on hand when customers request them.

ServiceTitan's Purchasing & Inventory modules make it easy to view and track item availability, create purchase orders, and restock quickly.

Companies that use ServiceTitan's inventory capabilities can:

• Cut operating costs with a centralized purchasing system where they can easily manage POs, returns, and bills.

• Gain more visibility over their inventory management and have control over their stock level at all times.

• Improve their plumbing inventory management in real time by using a mobile device for receiving POs, transfers, and inventory counts. 

“What happens with Purchasing & Inventory is that, as you’re buying things, it’s creating a PO and it’s basically going in and updating ServiceTitan right away to your gross margins,” says Tom Howard, vice president of customer success & experience at ServiceTitan. “You can see what your gross margins are going to be as you go throughout the month.”

Tip #4: Manage your suppliers

Creating reliable relationships with timely suppliers means plumbing contractors can better serve their customers. By managing your suppliers, you can reduce lead times and get the parts you need when you need them. This will also help prevent costly back orders and keep your business running efficiently.

When managing suppliers, a good understanding of costs helps plumbing contractors better evaluate vendors' prices, but they shouldn't assume the cheapest supplier is also the best. Also, creating service-level contracts with frequently used suppliers is a good supplier-management strategy, as it will help you streamline ordering and restocking workflows.

Contractors who know their way around inventory and supply management always plan for emergencies and have a backup strategy for unforeseen events that may disrupt their supply chain.

These are the most common challenges and strategies in plumbing inventory and supply management. Although it may seem overwhelming sometimes, the right solution can make it hassle-free. 

How Can Plumbing Inventory Management Software Help?

Apps designed for managing plumbing inventory offer numerous benefits to contractors, yet they also present several inefficiencies. These include manual data entry, limited purchasing, and inventory level visibility, and the absence of real-time tracking capabilities.

To help address these issues, ServiceTitan's holistic plumbing software has a built-in inventory-management feature that enables efficient inventory tracking and seamlessly connects with other essential areas of plumbing business management. 

ServiceTitan's plumbing inventory app features have been developed to gain inventory control at a detailed level. This includes requisitions, replenishments, item quantity by storage location, purchase orders, adjustments, transfers, and other related tasks. Enabling a pricebook item as an inventory item for plumbing contractors results in automatic and instantaneous tracking within our software.

ServiceTitan users commonly use the Update Price Book switch to transfer any notifications of inventory item price changes encountered during a job to their price book. They ensure accuracy in their records by updating their price book to account for pricing fluctuations during a job.

The Item Overview section of ServiceTitan's Inventory tab provides a detailed and comprehensive view of the equipment and materials. This can be seen in the screenshot above.

This view presents the name, code, description, available quantities, on-hold quantities, on-order quantities, and on-hand quantities for each inventory item, in addition to the average cost per unit and total stock value.

The Item Overview section includes comprehensive data, including total inventory valuation and item count.

Plumbing service contractors can access detailed information on any current inventory item, including usage frequency, available quantity and location, deployment history, and other relevant data. This allows them to save time when searching for an inventory item.

Regarding supply management, ServiceTitan's inventory replenishment allows ServiceTitan users to set up their replenishment source as a vendor or as their own warehouse. 

The inventory replenishment updates automatically when field technicians add items to invoices via ServiceTitan's mobile app. This helps ensure the technicians have the parts they need when they need them, minimizing back orders and other delays.

These are just a few of ServiceTitan's plumbing software capabilities that help thousands of service businesses overcome the challenges of inventory and supply management.

Manage Your Plumbing Inventory Hassle-free with the Right Tool

In the complex inventory and supply management landscape, contractors relying on holistic tools that integrate and connect all their business operations will be far ahead of the competition.

ServiceTitan can be your trusted partner in this journey of choosing the right tools for managing and growing your plumbing business. 

ServiceTitan is the industry's leading plumbing business software, offering a comprehensive suite of features for managing your entire business—including inventory and supply management through the power of automation. Our award-winning, cloud-based solution is trusted by thousands of service companies across the country.