The Drive to Gain More Control
Efficiency and accuracy can often mean the difference between winning a bid or losing a bid. It also means the difference between losing money or making money. In this economy, efficiency and accuracy are no longer an option but a necessity. Scott Contracting, Inc., a leading infrastructure contractor in Colorado, happens to be a company ahead of the curve, an innovator in using technology. By understanding that in order to get ahead, automation was key, the executives at Scott turned to the right integrated technology solutions to meet its needs and scale to the future.
Like most construction contractors, Scott Contracting handles several multi-phase projects in multiple locations simultaneously. With hundreds of projects, pieces of construction equipment and employees, the company needed to better manage the processes around these many moving parts. Lloyd Kuehn, CFO at Scott Contracting explains, "We wanted to be able to review and monitor costs by project, cost code and location on a daily basis so that we could manage more proactively."
To achieve this better control over labor and material costs, equipment usage and job cost tracking, they sought a means to accurately and efficiently collect data in the ?eld so that they could, in near real-time, gain visibility into their projects' status and costs. Scott Contracting also knew they wanted a mobile technology solution that would integrate with their ERP (Enterprise Planning Resource) system. The end goal was to optimize productivity and profitability.
Improving Labor and Construction Equipment Accuracy Leads to Cost Control and Savings
"At Scott, there was a realization internally that processes for payroll were cumbersome and inaccurate at times, both which can lead to time, resources and money spent unnecessarily," states Kuehn. Often, there was "phantom payroll" or paying employees additional time that was not actually worked due to inaccurate start and/or stop times. By multiplying this simple inaccuracy by the amount of workers and minutes, it can lead to overpaying employees by thousands of dollars. Ironically, entering time was time consuming in itself.
Project Superintendents were required to enter employees' start and stop times, equipment usage, job, and cost code on paper time sheets every day for each employee on their crew. These paper time sheets were then submitted to project managers (PMs) on Monday mornings for approval. The time sheets were then submitted to payroll clerks who would reenter the same information into the payroll system. The process was inaccurate, inefficient and costly for both administration and operations. In order to meet these challenges, the contracting company turned to a mobile solution, goLabor by Equential. GoLabor offers the flexibility, customization and integration they desired.
With goLabor in place, the Project Superintendents utilize laptop computers to scan barcoded ID badges from each worker in order to document actual start and stop times, then attribute the calculated hours to jobs and cost codes. They also allocate construction equipment usage and production to each job and cost code, producing actual unit costs accurately, and in real time. The Project Superintendents then validate the batch and send it into the Equential system via air cards allowing immediate review by PMs and eliminating the double entry of data entirely.
The result has been more timely information for project managers on job performance, reduced overhead costs for payroll processing and a more efficient process overall. Beyond solving the payroll issues, Equential also helps Scott track construction equipment location, schedule preventative maintenance on their equipment, and track FOG (fuel/oil/grease) usage.
For example, a low boy driver who mobilizes construction equipment from one site to the next now uses a mobile device to document when and where each piece of equipment in the fleet was moved. A fuel driver is equipped with a mobile device and can scan the equipment and record how much fuel goes into each piece of that equipment.
The system also tracks meter readings on heavy equipment which is used to generate work orders in the ERP automatically to ensure timely maintenance intervals. By knowing actual production rates, fuel usage rates and maintenance costs, more accurate estimates can be prepared on projects.
The Results are In: Integrated Technology Delivers ROI
Scott Contracting had the foresight to integrate its mobile computing technology with its ERP system and estimating software. As a result, just in labor savings alone, the Equential system paid for itself in the first six months. The company now saves 6% - 10% of labor costs by using real-time scanning to track actual clock-in/out times. Adds Kuehn, "Not only have we eliminated redundant manual processes, we now know exactly what it costs to install 4" , 8" or 12" pipe or what our production rate is for main-line concrete paving. That's a tremendous competitive advantage for us." Other significant results they have realized include:
- Real-time data on how they are performing against estimate and cost.
- The ability to provide supervisors with daily feedback as to their production and profitability.
- The information to make decisions on active ?eld projects to improve efficiency and pro?t performance.
Technology has enabled Scott Contracting to better align management goals with crew goals through immediate information and feedback. The executive team at Scott Contracting views it as a great advantage to be able to track production as it occurs and know early in the project if they will meet their production and pro?t objectives. More timely repairs, more accurate detail on equipment and fuel usage means lower risk for the company and more accurate estimates on new projects/for new projects. Concludes Kuehn, "Having better estimates are absolutely critical, especially in this hyper-competitive environment. Equential has provided us with this crucial advantage."