10 Inventory Management Tips for Building Material Suppliers

Summary: Managing inventory isn’t just about keeping shelves stocked—it’s about striking a balance between having what customers need and not overspending on what they don’t. With the right tools and strategies, building material suppliers can cut costs, improve efficiency, and boost profits.

Understanding inventory management

Types of inventory methods

Here are the most common strategies suppliers use:

• Economic Order Quantity (EOQ): The sweet spot for order sizes to minimize costs.
• ABC Analysis: Categorizes products into high-value (A), mid-value (B), and low-value (C) groups.
• Inventory Production Quantity: Defines how many units to order in a single batch.
• Just-in-Time (JIT): Keeps inventory lean by syncing deliveries directly to customer orders.

Think of these as different “recipes” for keeping your warehouse efficient—each has its place depending on your business model.

The importance of effective inventory management

Building material suppliers must walk a careful path between always having products in stock that their customers want to buy and tying up too much money in raw materials or products that are not in demand.

Striking the right balance can only be achieved with effective inventory management, which means having the optimum level of products and materials for current and predicted sales. Previously, understanding these parameters came down to gut instinct and experience.

For example, a seasoned store manager would know which products to have in stock in greater or lesser quantities at different times of the year in their particular region and order accordingly.

In today’s more complex world, with much broader catalogs of products and materials, unpredictable supply chains, and fluctuating prices, making manual calculations based on guesswork is no longer possible.

The good news is that building material suppliers can now implement industry-specific software that links together inventory, purchasing, deliveries, accounting, and business analytics in one easy-to-use system.

These systems are built for the building material business to update when orders are taken and purchases are made automatically. There’s no need to keep entering data into different record-keeping systems, which can introduce inaccuracies and errors.

To remain competitive, you need to meet customers’ requirements with excellent service while continuing to generate profits. Inventory management is key to achieving those two goals concurrently and building a successful business.

Understanding inventory management

Types of Inventory
 

Different technical methods are involved in inventory management, mainly concerning control and timing. The most popular are economic order quantity (EOQ), ABC analysis, inventory production quantity, and just-in-time inventory.

• EOQ (Economic order quantity) refers to the ideal order quantity that should be purchased to minimize inventory costs and optimize the number of units ordered.
• ABC analysis is an inventory categorization methodology that puts products into three buckets, from A for the most important products that require the tightest controls and most accurate records to C with the simplest controls.
• Inventory production quantity tells you the number of products that should be ordered in a single batch to optimize holding costs.
• JIT (Just-in-time) inventory relies on a strategy that aligns deliveries with customer orders and reduces inventory levels.

10 inventory management tips

1. Categorize your inventory – Build your foundation by sorting items into groups and establishing base counts.
2. Track product information – Use SKUs and UPCs to follow products from supplier to customer.
3. Organize your warehouse – Place fast-moving products near the door to speed up shipping.
4. Introduce a regular audit – Cycle counts, spot checks, and audits keep your numbers accurate.
5. Follow the 80/20 rule – Focus on the top 20% of products that drive 80% of your profits.
6. Communicate with suppliers – Monitor supplier reliability; don’t hesitate to adjust relationships.
7. Update your software – Move beyond spreadsheets to modern, cloud-based inventory systems.
8. Analyze your sales – Use historical data to set smarter order quantities.
9. Account for changing demands – Demand forecasting helps avoid overstock and shortages.
10. Reduce costs – Smarter processes mean fewer errors, less waste, and higher margins.

Master your inventory

An end-to-end software like Spruce is tailored to meet your unique needs. Created by lumber and building material supply experts, it manages everything from purchasing and inventory through delivery, accounting, and business analytics.

Built around core document management functionality, it enables you to quickly access your customers’ quotes, orders, and POs and receive documents and sales invoices in one centralized, easy-to-use system, saving time and money by emailing customers their statements and invoices.

Different branch locations are fully supported, not separate installations but one software and database. This makes it very easy to move inventory, check stock availability across branches, and change branches within the software. It’s also possible to designate different supply and sale branches for orders and consolidate purchasing with or without warehouse location(s).

Inventory management is one of the most critical aspects of supply chain management for building material suppliers. As all aspects of a business's smooth running are affected by it, improving its effectiveness and efficiency through technology can have a marked effect on the bottom line.
 

Why this matters (What it means in practice)

Inventory management is the backbone of your entire supply chain. Without it, you risk:

• Empty shelves when customers need materials most.
• Overstocked warehouses that tie up cash.
• Inefficient operations that slow down service.

With strong inventory practices, you’re not just saving money—you’re building a more resilient, competitive business.

Master your inventory with Spruce

Spruce is built for lumber and building material suppliers. It connects purchasing, inventory, delivery, accounting, and analytics into one system—no more juggling spreadsheets or manual processes.

With Spruce, you can:

• Access quotes, orders, and invoices in one place.
• Easily transfer stock between branches.
• Support multiple locations with a single database.
• Forecast demand with confidence.

Summary: Inventory management isn’t just a back-office task—it’s the heartbeat of your supply chain. With the right strategies and tools like Spruce, you’ll cut costs, meet customer needs, and stay competitive in a rapidly changing market.

Want to take the first step towards efficient and cost-effective inventory control. Let's Talk