What is a material control layer?

A material control layer is a system that sits between procurement, field operations, and financial systems to provide real-time visibility into material state across the full lifecycle — from purchase order to installation to reconciliation. Unlike ERPs or inventory apps, it tracks the physical material itself, not just the transaction.

How is RunBlu different from an ERP or inventory management system?

ERPs track dollars and transactions. Inventory apps track what's on a shelf. RunBlu tracks the material itself through six enforced states: Ordered, Received, Stored, Allocated, Installed, and Reconciled. Every state change is an immutable event. When RunBlu says you have 200 feet of conduit in Bay 4, it means someone put it there, nobody has moved it, and it's not allocated to another job.

What trades does RunBlu work for?

RunBlu is built for specialty trade contractors including electrical, mechanical/HVAC, plumbing, fire protection, and civil contractors, as well as general contractors who need visibility across all subcontractor material flows. It's designed for contractors in the $5M to $50M revenue range.

How long does it take to implement RunBlu?

RunBlu is implemented in four sprints over 17 to 24 weeks: Foundation, Receiving, Allocation, and Readiness. The system is configured around your workflows, your team is trained, and you go live together.

How much can RunBlu save my company?

Contractors typically recover $400K to $700K in working capital in year one through reduced over-purchasing, waste elimination, and improved reconciliation. The average contractor over-purchases 10-20% of material due to unreliable inventory data. Eliminating that alone often delivers 13x+ ROI.

Does RunBlu integrate with Procore?

Yes. RunBlu is the material control layer and Procore is the project management layer. They are complementary systems. RunBlu integrates with Procore as well as accounting systems like QuickBooks and Sage.

What Your Yard Is Really Costing You (It's Not What You Think)

Last updated: June 8, 2026

Key Facts

Carrying costs on construction material run 18–25% of inventory value annually
A $30M contractor with $1.2M in yard inventory pays $216K–$300K/year just to hold it
The four components: capital cost, depreciation, handling labor, and physical space
Most contractors only track one of these (if any)
Reducing average inventory by 20% saves more than cutting a full-time position

The number your books don't show

Your P&L shows material purchases. Your balance sheet shows inventory value. Neither shows you what it costs to hold that inventory.

This is carrying cost — the annual expense of owning material that sits in your yard waiting to be used. For most specialty trade contractors, carrying cost runs 18–25% of total inventory value. Every year. Whether you use the material or not.

A $30M electrical contractor with $1.2M in average yard inventory is paying $216K–$300K annually in carrying costs alone. That's separate from the material cost itself. It's the cost of having it.

And almost nobody tracks it.

The four components

1. Cost of capital (8–12%)

Money tied up in inventory is money you can't use elsewhere. If you're financing material purchases — and at today's rates, most contractors are — you're paying interest on material that might sit in your yard for months.

Even if you're buying with cash, that capital has an opportunity cost. A dollar sitting in conduit fittings in Bay 4 is a dollar that's not earning you anything. At a conservative 8% cost of capital, $1.2M in inventory costs you $96K per year in money you can't deploy.

2. Depreciation and obsolescence (5–8%)

Material depreciates. Not on your books — most contractors carry material at cost — but in reality. Lighting fixtures get superseded. Fittings go out of spec. Wire insulation degrades. Standards change, codes update, manufacturers discontinue SKUs.

The longer material sits, the more likely it becomes unusable for its original purpose. At 5–8% annually, that's $60K–$96K in value erosion on $1.2M of inventory. You won't see it until you try to use the material and discover it's been sitting there for three years and the spec has changed.

3. Handling and labor (3–4%)

Material doesn't manage itself. Someone receives it, moves it, stacks it, counts it, moves it again. Every time a foreman walks the yard looking for something, that's labor cost. Every time a crew restacks material to get to something buried behind it, that's labor cost.

The less organized your yard, the higher this number goes. Contractors with no tracking system spend disproportionate labor time on "finding things" — time that doesn't show up as inventory cost but absolutely is.

4. Physical space (2–3%)

Yards aren't free. Whether you own or lease, the space your inventory occupies has a cost — property tax, insurance, fencing, lighting, maintenance. The more material you carry, the more space you need.

Contractors who reduce their average inventory by 20–30% often discover they don't need that second yard, or they can defer the expansion they'd been planning. That's not a small number.

Why this matters more than you think

Carrying cost is invisible until you calculate it, and then it's impossible to ignore.

Consider: a $30M contractor who reduces average inventory by 25% — from $1.2M to $900K — saves $54K–$75K in carrying costs annually. That's pure margin improvement with zero impact on revenue. No new customers needed. No change in pricing. Just less material sitting idle.

But here's the real insight: you can't reduce inventory without knowing what you have. And you can't know what you have without tracking it.

The contractors who carry the most inventory are almost always the ones with the worst visibility. They over-order because they don't trust their counts. They hoard because they can't see what other yards have. They don't return surplus because nobody tracks what's left over. Each of these behaviors inflates inventory, which inflates carrying cost, which eats margin.

How to calculate your number

Simple version:

Average inventory value: Take your beginning and ending inventory for the last 12 months and average them. If you don't do physical counts, estimate conservatively — it's probably higher than you think.
Multiply by 20%: This is a conservative carrying cost rate for construction material. If you're financing inventory or your yard is poorly organized, use 25%.
That's your annual carrying cost. Compare it to what you pay a mid-level employee. For most mid-market contractors, carrying cost exceeds the fully-loaded cost of at least one FTE.

If that number makes you uncomfortable, you're paying attention.

What to do about it

You can't eliminate carrying cost — you need material to do work. But you can reduce it by carrying less inventory without affecting your ability to execute jobs.

That requires three things:

Knowing what you have — real-time, not quarterly counts
Knowing where it is — across yards, trucks, and job sites
Knowing who it's for — allocated vs. available vs. surplus

When purchasing can see actual stock levels before writing a PO, they buy less. When PMs can see material allocated to their job, they don't request buffers. When surplus is visible and recoverable, it gets reused instead of re-purchased.

The math is simple: less unnecessary inventory = lower carrying cost = more margin.

Run a free Bleed Audit to see what your inventory is really costing you.