3 Tool Tracking Approaches to Stop Theft & Reduce Replacement Costs

Asset Tracking Software / November 2024

The collective estimated cost of tool theft in the UK totals £2.8 billion, prompting the need for a more sophisticated approach when it comes to improving tool tracking methods.

Tool theft is an issue that affects most operations, from self-employed services to large construction sites. The latter averages a loss of £800 million a year in lost tools, equipment, and consumables.

For smaller businesses, the loss of expensive tools can be devastating. No matter the scale of loss, however, keeping tools locked away in a safe location means fewer job delays and less time spent locating equipment.

In the UK alone, four in five tradespeople have experienced tool theft, which equates to an average loss of £4,470 per person in the self-employed sector.

An accurate system for tracking tools is especially critical among field service operations and self-employed tradespeople, who rely heavily on the availability and performance of their tools.

Essentially, three methods can be adopted to help reduce the risk of tools being stolen or misplaced;

1. Hands-on security
2. Manual inventory management
3. Automated asset tracking

This guide briefly explains the above methods, showing how automated asset tracking ends up being the most logical and foolproof solution for the vast majority of businesses.

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Tool Tracking Approach #1: Hands-On Security

A hands-on approach to tool tracking will affect those working in the field and travelling between jobs. This method requires a lot of attention to detail when it comes to identifying and locating tools. It also demands that those responsible for the tracking of tools be switched on at all times. A hands-on tool tracking approach is key when:

• Leaving tools at a job
• Storing tools in a van
• Keeping tools in a yard or warehouse facility

Leaving Tools at a Job

To save time ferrying tools back and forth between jobs, they can be left at a job overnight. This means tools need to be accounted for when out of sight. To achieve this, site managers can:

• Produce tool checklists that are monitored daily on arrival and departure
• Make employees accountable for what tools they’re using by signing them out
• Ask the site owner to store the tools in a safe place

Storing Tools In a Van

Tool theft is most prevalent in vans, with more than a third of van drivers having tools stolen in 2022 alone. The same report found that loss or theft of equipment and tools meant tradespeople were unable to work for an average of six days while these were being replaced.

There are several security measures to combat tool theft from vans:

• Make sure a loud and secure alarm is fitted
• Fit new locks and alarms on older vans
• Secure tool safes inside the van body
• Keep keyless van remotes in a tin box or RFID-blocking wallet
• Remove tools altogether when left overnight

Source: Tradespeople Against Tool Theft Report

Keeping Tools In a Yard or Warehouse Facility

Most of the time, tools will be left at the workplace. Whether that be a yard or a warehouse facility. If this is the case, be sure to install:

• A working alarm
• 24/7 CCTV with night vision
• Motion detector floodlights
• Large tool safes with deadlocks

Tool Tracking Approach #2: Manual Inventory Management

While security measures are important to reduce the risk of theft, tools still need to be accounted for. This can be achieved by manually tracking your inventory, which is a cheap and easy way to gain good visibility of what you have. This helps to:

• See the quantity of each tool available in stock
• Know where each tool is located (on-site or at a job)

Manual tool inventory is typically carried out by using notepads, whiteboards, or spreadsheets. Spreadsheets are the most popular due to ease of use, affordability, familiarity with staff, and features for easy access whether on-site or off-site.

Where Spreadsheets Fail

However, the use of asset tracking spreadsheets has its downsides. For starters, there is a considerable commitment needed to perform manual inventory management on a daily or weekly basis as it requires a lot of staff-hours.

There’s also a high possibility of working with incorrect information, as the wrong data can be easily input into spreadsheets without being flagged.

A 2013 Market Watch study found wrong formulas, misaligned rows, and duplicate cells were just a handful of inaccuracies accounting for the 88% of errors found in all spreadsheets. And, in 2024, it has gotten worse: 94% of business spreadsheets are found to contain critical errors, as reported by Phys.org.

Thankfully, there is a more reliable inventory management alternative; an automated asset tracking system.

Tool Tracking Approach #3: Automated Asset Tracking

Automated tool tracking is by far the most efficient approach for any business with several loose tools. Although it can initially cost more than the alternative of using spreadsheets, the long-term benefits are undeniable:

• Accurately track the real-time location of each tool
• Have a clear view of tool availability when booking jobs
• Spend fewer work hours on inventory and auditing tasks
• Create an accurate asset register with desired tool information (last known user, real-time location, purchase price, etc.)
• Access tool information from various locations on mobile devices (phones, tablets, laptops)
• Implement an equipment checkout system to make users accountable when tools are overdue or missing

A digitalised approach to tool tracking requires you to have a tracking system installed on a computer or a mobile device, such as Tool Tracking Software or Asset Tracking Software. This system is then paired with asset tags that allow for real-time data updates.

Essentially, it works like this:

1. Tools Are Affixed With Asset Tags

An asset tag is attached to each tool or set of tools, this is known as asset tagging. There are several options available when it comes to choosing the right asset tag to use; Barcode, QR Code, RFID, GPS, and NFC.

Each tag has its own benefits and uses. Some tags are more suited for smaller budgets (like Barcodes) and some are suited for larger budgets with a vast inventory of tools (RFID tags). Whereas other tags are more suited to track large equipment such as vehicles (GPS tags).

Ultimately, for tool tracking, the choice comes down to using either Barcodes and QR codes or RFID tags.

2. Each Tool Is Assigned a Unique ID

With the chosen asset tag attached to a tool, that tag – and subsequently that tool – is assigned a unique identification number and inputted into the asset tracking system. This is the basis of creating a detailed asset register that will display the individual information for each tool.

Source: gigatrak.com

3. A Profile Is Built for Each Tool

Once a tool and its unique ID have been created in the system, further information can be added. That includes:

• Serial numbers
• Manufacturer details
• Purchase date and price
• Last known location
• Current condition
• Insurance and compliance details
• Safety and risk documents
• Downloadable PDF tool manuals

There is now a profile for each tool that can be viewed and edited by all users with access to the system.

4. Tools Are Tracked and Accounted For In Real-Time

Each time a tool is checked out for a job or moved location, its tag will be scanned. This allows the relevant information to be updated and synced across the system, letting all users know where a tool is and who is using it.

Shared calendars between teams can also be built to know when a tool is available for a specific job, before committing to booking that job and risking a delay due to the tool being unavailable.

Case in point; there are multiple success stories of using an automated tool tracking system. Nene Valley Tree Services, a small tree surgeon company, implemented an asset tracking solution to prevent the theft of expensive equipment. This helped them recover a chipper that would have cost thousands of pounds to replace and caused severe job delays.

Large oil and gas technology company, Tracerco, also installed an automated tracking service, which enabled them to switch from a manual inventory approach and saved staff three hours a day on locating equipment.

Why It’s Time to Upgrade Your Tool Tracking Efforts

No matter what tool tracking approach appeals most or suits your budget, the undeniable fact is that the loss of tools is an ongoing problem that requires a practical and realistic solution. With automated tracking, what was once considered an inevitable cost of business in the trade industries (esp. with builders, handymen, technicians, yet not only) can now be greatly reduced without much hassle.

Businesses that fail to diligently track their tools are faced with:

• Expensive tool replacement costs
• Delayed or cancelled jobs, resulting in lower revenue
• Wasted work hours spent locating tools
• Delayed maintenance and a loss in production for in-house maintenance teams requiring maintenance, repairs & operations (MRO) inventory

At the end of the day, the most efficient solution is to incorporate an automated tool tracking solution into your day-to-day activities.

By affixing a network of barcodes, RFID tags, or GPS trackers to expensive tools, self-employed workers and tradespeople have a greater chance of combatting the £5.2 billion that UK businesses lose each year through delayed and cancelled jobs due to the sudden unavailability of tools.