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How To Keep Track of Tools and Equipment

If your business uses a lot of tools and equipment, keeping track of inventory will be no easy task. From small tools like hammers to saws and big equipment like rollers/cement mixers, individual equipment tracking becomes a huge concern for the organization. 

Deviations from the record can cause a delay in project completion. Tool data irregularity can cause Shutdowns, Turnarounds, and Outages (STO’s) where the cost of project completion becomes 3-4 times the actual cost. 

This may lead to inaccurate decision making, inefficient planning, and an inability to stick to the contract. To complete the project on time,  most stakeholders just reorder the equipment rather than locating it, which further increases project costs. 

But the main question is, why do tools go missing?

The main reasons you cannot find your tools are:

  1. Tools are not there and/or they have arrived in the wrong quantity: if the tools that are supposed to be shipped haven’t reached the designated location or they are shipped to another, you will have a missing tool report. 

  2. Tools have been moved: maybe the tool is still in the warehouse. But someone moved elsewhere without anyone knowing or they have placed it in the wrong location after using it, so it will classify as missing.

  3. Theft/Misplacement: one of the most common reasons for missing tools is theft. Someone took the tool to work and didn’t return it. Or after using it, they misplaced it. 

  4. Log is not recorded correctly: if the log sheet says that someone has issued the tool while it’s actually still on the premises, it won’t be used if there is a requirement. Conversely, if someone is using the tool but the log sheet says that the tool is available, people will look for it. That will cause confusion, halt work, and waste precious time. 

However, there are some tips and tricks you can implement to make sure you keep a good track of your tools and equipment.

Track All Inventory

Tracking your inventory is the best thing that you can do. A good inventory tracking system means it is accurate and up to date. You can do cycle checks instead of daily tracking to reduce the time and effort required for inventory checking. 

You may also have a central database where you list everything you own. That will reduce theft, as everyone will know if something’s missing.

Inventory checks also make sure you allocate an appropriate budget for the inventory. Most of the time, businesses have much more inventory than they need. 

Even if that’s not your case, when tracking your inventory, you will be on top of work requirements and order equipment correctly the next time you need it. 

Categorize Tools And Equipment

Categorizing tools and equipment can help you identify where similar tools are kept and which ones can be used interchangeably. While you can categorize your inventory granularly in a program, you can place interchangeable tools in the same location for easier access.

You can divide tools into various categories, in a way that suits your business model best.

For example, you can organize tools by site and divide small and large tools. Other categories can be:

  • Type of tool (hand tool, power tool)

  • Tool brand

  • Use for that tool (indoor, outdoor)

Organize tools as you see fit, but it would be wise to include information on equipment’s status, purchase date, and warranty expiration date. 

Tag Individual Items 

Tagging items in your inventory will enable you to track, identify and locate each tool you have. You can tag equipment in many ways, barcodes and RFID chips being the most common. 

We will explain the benefits of each option later.

Track Tool Usage

You should know which tool is being used more, how much is it being used, who is using it, and how much does it cost to ship it. 

These insights will help you prioritize tools by requirement and transport price so you don’t spend an extra dime on tools than you absolutely have to. 

If a tool is collecting dust in a warehouse while it’s needed somewhere—the business suffers.

Most importantly, if a tool gets stolen, you’ll have the record of who was the last person handling it, when they used it, and the last location they used the tool. This is important as over time, the cost of lost tools adds up. 

Checking in and checking out tools will help make a strategy for further equipment management.

Track Repairs And Warranties

If you’re using one tool daily and another one once a month, the tool you use every day requires more maintenance, and it’s more likely to break. 

Also, when you have information about the equipment usage, you can plan maintenance for idle tools or machines due for checkups. Being well organized will not affect business processes, and will keep your equipment up and running. 

Monitor which tools are under the warranty as you could maintain/fix them free of cost. This will make sure you spend money and time only on those tools/equipment that really need it.

What Happens If The Tool Breaks?

Track which tools are regularly out of commission. If something breaks, try to understand the reason behind it, especially if it happens more often than it should. You can do that by collecting data and conducting trend analysis. 

Answer the following questions and you’ll have a better understanding of why something breaks: 

  • Is the equipment not being used properly (handling error)? 

  • Are they not being used according to correct voltage specifications? 

  • Does it require a resting period before reuse? 

Not only does a broken tool costs time and money to fix it, but your workers would also be idle while it’s getting fixed if there’s no replacement available.

To save money in the long run, try to buy quality equipment from a trustworthy brand. 

Determine Optimum Utilization

When categorizing tools, you can gather more data for each one. For instance, you can find out which tools employees like better and which ones are the most effective in getting the job done. 

Compare that with the cost and find information on how many companies are making it. Then, try to research which brand has the most durable equipment. Do a cost analysis to figure out which tools drain you most financially, either by physical issue (breaking too early) or logistical issue (too much requirement). 

With that intelligence, you’ll be able to make smarter decisions.

Equipment Usage Accountability

Making individual workers accountable for the equipment they use is a sure-fire way to reduce thefts and counting errors. 

Here’s what you can do.

  • Use technology: use a tool management system instead of a manual record and make sure your employees know how to use it. That way they can self-check-in or check-out the required tools. 

  • Bring your employees up to speed about the tool tracking system you chose and explain how everything functions. You can also put a tool handling and usage chart in the workplace for a better understanding.

  • Create a tool handling agreement to make sure your workers understand accountability associated with issuing that tool. Tell them about established laws related to the theft of tools and remind them of the consequences. 

  • Establish rewards and fines: for an exceptional tool handling, you can also issue rewards. This will motivate people to handle the tools better. Fines can be given to those who don’t follow the rules. Workers who “lose” tools frequently can pay for the equipment out of their paycheck, if this will be your p.  

Asset Management System

Pen and paper tracking can work for small organizations, however, an asset management system/inventory management system should be used to manage tools in a large organization. It reduces inventory errors and increases safety for tools. 

Along with the tagging system, you can formulate a real-time asset tracker for more precise information.

You might think, “I can manage my tools with a logbook and RFID tags. Why should I pay for software to do that?” 

Well, there are huge advantages to using a dedicated software solution for tool tracking. Pen and paper solutions or spreadsheets are nowhere near good enough then the software method.

Here are some advantages of professional tool and asset management software over paper tracking/spreadsheets: 


Pen And Paper Tracking / Spreadsheet

Asset Management Software

This method is inherently unreliable and prone to errors.

The software solution is reliable, smarter and faster.

Manually collecting data and updating the system/ record index wastes a lot of time.

Software solutions provide real-time data collection and frequent updates.

Data is out of sync if more than one person has access to the spreadsheet.

Data is in sync throughout the whole system through regular and comprehensive audit trails.

It’s device-dependent. If something happens to the ledger or the hard-drive where the spreadsheet is stored, it becomes difficult to retrieve the data. In most cases, that data is lost and you have to start from scratch.

Through cloud connectivity and flexibility of software solutions, this is an accessible and device-independent solution.

Usually, only one person can edit the file/record at once. Otherwise, it becomes chaotic and difficult.

Data is available for all the staff. Any member can update the central database anytime they want. This helps in efficient project planning.

Paper solutions cannot be edited by smartphone.

Full smartphone connectivity and easy record updates as possible.

Spreadsheets/ manual records have no accountability, especially in large organizations that use an abundance of tools. Someone might issue a tool and forget to report it, or they may return it late.

Along with the issuer’s name, the software also records time, location and other factors. This decreases downtime for the tool and increases accountability as the software also has a historical trail.

Too much data can cause sluggish processes. You cannot use manual records to understand usage trends, or predict future requirements. You also don’t have the ability to plan a future project based on tools available today. This causes complexity for users.

Through data science and supplementary data collection, trend analysis and prediction can be made for a particular tool.

This system is outdated by default and has no new technical features. Causes an unnecessary waste of time, money and lowers productivity.

Geo-location, automatic notifications and efficient management make software an ultimate tool and equipment tracking solution.

So now that you know the benefits of a professional tracking solution how should you choose a tracking solution? 

There are many available on the market. Most of them cater to different needs. We’ll explore the features you need to be on the lookout for.

There are a few things you should consider before choosing a tool tracking solution

Cloud Connectivity

Storing your data on a single disk is a big security risk. Cloud-based solutions allow users to access data from anywhere (flexibility). Also, cloud-native architecture has firewalls and encryption settings that add another layer of security. 

Scanning Device

You can use either a smartphone scanner or a dedicated hand-held scanner for equipment scanning. A handheld scanner is an extra piece of hardware that you have to buy which is why most companies implement smartphone scanners that offer more flexibility for check-in and check out. 

barcode scanner

Instead of worrying about scanners breaking and causing a delay in the daily processes, users can use a software though their own phone and do a self-check-in and check out. It saves both time and money.

Unique Identifying Information

Labels, barcodes, and QR codes are a few examples of how you can tag and differentiate tools from one another. All these options use different ways of storing product/tool information. 

For example, If you need basic tool identification and an entry into the smaller database, barcodes are a cost-effective choice that could work for you. 

However, their unique identifiers have some limitations, so organizations with large amounts of tools where that need to make sure all secondary data is available for everyone will find QR codes more suitable. 

Here at GoCodes, we patented our QR codes. They have unique identifying characters, making sure no product has the same code/identifier, so even when two departments merge, the data is always unique to one individual asset. 

Tool Reservation

Is the tool reservation required or not? 

Organizations that have multiple ongoing projects find tool reservation as an important criterion, especially when expensive tools are in short supply. 

For optimum usage of the tools, software can use data science and machine learning algorithms for decision making in case of redundant requirements. 

Machine learning algorithms can predict ideal repair and maintenance times for vital tools to keep service disruption at a minimum. 

Automation Requirements

With the software you usually get automatic database alerts and automatic checking status alerts. Next, decide what level of automation you require. The software can be configured in many ways, and you can look for the program that suits your automation needs best. 

For instance, the asset tracking software can send alerts if a particular tool is not returned on time. It can create a roster for issued tools with information on who issued them. 

If there is a constant requirement of a particular tool, you can set the software to send alerts or automatically add that tool to your purchasing list.

You can also integrate IoT with tool tracking software. With this option, you can link motion detectors and surveillance cameras to the software so if there is a movement in your warehouse without an ID check-in, you’ll get an alert. 

If someone is entering the tool section without first logging into the system, you’ll get an alert and the camera will start recording.  

Different Tools Require Different Approach

Keep in mind that different assets require specific software/hardware equipment for tracking and handling. Using different systems creates vague categories that can be further subdivided into data points for tools.

Small Tools (Hammers/Saws)

Use a barcode system with a smartphone scanner. This way you’ll have a cheap and effective hardware solution that works with your software. 

Mid-sized Tools (Polisher/Concrete Mixer)

For sparse tools that are frequently in use, use QR codes along with cloud connectivity. 

With real-time updates being sent to an online ledger, everyone will have up-to-date information about the tool availability. You can even attach a Bluetooth transmitter for tracking and real-time location information.

Big Sized Tools/Equipment (Rollers/Rigs)

Massive equipment requires a more precise approach as it’s more expensive than other equipment. These assets need GPS tracking over huge networks, usually 3G or 4G. 

The software you choose should measure exact location and usage for these as they are costly to get and operate. 

For these big sized tools, here are some other data points you should track, along with location and usage:

  • mileage
  • last maintenance date
  • servicing cost
  • engine data

More data will help predict if there is a need to service or replace parts and what measures you should take to reduce device degradation.    


Leveraging technology to manage tools is a great way to minimize your downtime and work smarter. 

A modern equipment inventory system solves your business’s tool and equipment management needs. It will increase accountability among employees, reduce petty thefts and add years to your equipment’s life.

Automating background processes, incorporating IoT with tool management software and using data from tracking software for prediction analysis is the new future. 

Time is money and downtime doubles the cost. As a business owner, always make decisions that benefit your company most. 

With a systematic approach to your assets, not only you’ll have data to drive those decisions, but you will be able to empower your workers, boost productivity and increase your profit margins. 

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