In construction environments, labor costs remain one of the most significant challenges for project managers, business owners, and operations leaders. Skilled labor is in high demand, overtime expenses can skyrocket, and delays caused by inefficiencies often cut into already slim margins. While many companies focus on improving schedules or negotiating labor rates, one of the most effective (and often overlooked) strategies for lowering labor costs is through better materials management.
How Materials Management Impacts Labor
Labor and materials are very tightly connected. On most job sites or in warehouses, workers spend valuable hours locating tools, waiting on shipments, or double-handling supplies. These inefficiencies drive up labor expenses without adding any real value to the project. Some common problems include:
Lost time searching for materials: Without a reliable materials tracking system, employees can waste minutes (or even hours) looking for the right item. Even 10 minutes a day wasted per worker adds up to significant costs over weeks and months.
Excess handling: Materials that aren’t stored properly or efficiently may need to be moved multiple times. Each unnecessary touchpoint increases labor expenses.
Delays from shortages or errors: Running out of supplies or using the wrong items can stop work entirely, leaving crews idle while waiting for corrections.
Overstaffing and Overstocking as a “safety net”: Without clear visibility, managers may schedule extra workers “just in case,” which is another big drain on the budget. Also, without real time tracking of materials and effective analysis of usage trends managers typically order more than then need, on average 8% more.”
By improving construction materials management, companies free up workers to focus on productive, revenue-driving activities.
The Link Between Efficiency and Cost Savings
Let’s consider a simple example. Imagine a crew of 20 workers on a job site. If each one wastes just 15 minutes a day waiting for the right materials, that’s five total hours of lost labor per day. Multiply that across weeks or months, and the cost of inefficiency quickly rivals the price of hiring an additional employee.
With an effective materials management solution, those 15 minutes can be reduced or possibly eliminated altogether. Over the course of a year, that translates into thousands of dollars in labor cost savings.
Strategies for Lowering Labor Costs Through Materials Management
Centralized Inventory Tracking
Modern inventory management software allows companies to track supplies in real time. With barcoding systems and integrated data, employees always know what’s available, where it’s located, and when it needs to be replenished.
Ordering Automation
Stockouts lead to downtime, while overstocking ties up capital and requires more labor to manage. Smart companies maximize efficiency with systems that can create and organize Purchase Orders and other purchasing processes.
Barcode Solutions
Scannable labels and tags simplify check-in and check-out processes for tools and materials. Workers spend less time on manual paperwork and more time on productive tasks. These solutions also reduce costly errors, such as duplicate orders or missing items.
- Job Site Kitting and Pre-assembly
Organizing materials into ready-to-use kits before they reach the site ensures crews can begin work immediately. Pre-assembly reduces downtime, minimizes handling, and allows teams to complete tasks faster with fewer errors. - Integration With Project Management Systems
When materials tracking software integrates with platforms like Viewpoint Vista, project managers gain complete visibility into costs, timelines, and labor needs. This insight allows for smarter staffing decisions and prevents over-allocation of resources.
Real Results From Smarter Materials Management
Companies that prioritize construction efficiency through smarter materials management often report:
- 20–30% reduction in labor hours spent locating or handling materials.
- Lower overtime expenses due to fewer delays and predictable workflows.
- Improved employee morale since workers aren’t stuck waiting around for supplies.
- More accurate project forecasting, allowing leaders to bid competitively without sacrificing profitability.
These improvements create a big ripple effect that includes better margins, stronger client satisfaction, and the ability to take on more projects with the same workforce.
Lowering Labor Costs With Smart Software
Labor costs can make or break a project. That’s why we design and implement materials management solutions that streamline processes from end to end. Whether it’s barcoding systems, automated inventory tracking, or integration with your existing platforms, our software gives you the visibility and control you need to lower labor expenses and operate more efficiently.
Lowering labor costs doesn’t always require cutting staff or negotiating rates. Sometimes, the most effective strategy is to eliminate the inefficiencies that drain time and productivity. Materials management is at the heart of this transformation. With the right inventory management software and processes in place, businesses can keep projects moving, crews productive, and budgets under control. If you’re ready to explore how smarter materials management systems can reduce labor costs for your organization, Nobious can help.
