We've entered into a rare economic climate where operational inefficiency can no longer be over-come by superior marketing and selling.
In order to get your fair share of available work (survive?), your company must be extremely efficient in the field. The current construction market:
- Nearly everything is going to bid.
- Prices are rock bottom (often below apparent direct costs).
Margins are too slim and cash flow is too tight to be losing time in the field. There is no room for error.
We've been hesitant to focus our Best Practices Newsletters on production management as quite frankly, contractors are normally far too focused on field operations. However, these are not normal times.
NOW is the time to be OBSESSED with field performance.
Today, we are going to share with you the techniques we teach our clients to minimize their field costs. We teach them how to eliminate everything that slows down their crews, eliminates re-work, and manage their clients.
Before we introduce you to our FRC Multi-Tool for production management, we'd like to share a bit of history drawn from the manufacturing world. It is a much studied case about cost reduction and demonstrated the competitive advantage of continuous improvement - something foreign to contractors.
The TI Story
You probably are familiar with Texas Instruments (TI). It created and dominated the hand-held calculator market. TI set out to own the market. To do that, it needed to hit a relatively low price point that would discourage new competition. That price target was well below their initial manufacturing costs.
TI took a huge leap of faith that it would slice its manufacturing costs by over 90% simply by producing tens of thousands of calculators and applying the mass production lessons they learned along the way. It was playing the continuous improvement game and it worked like a dream.
The continuous improvement game is where most contractors fail. Instead of lowering production costs as they grow, they tend to see them rise as they add crews and take on larger projects. Contractors rarely adopt systematic improvement methods for improving field performance. Hopefully, you're both different and better.
Contractors fall prey to the never-ending headaches created by designers and owners. They get brainwashed into believing they are powerless to change the way projects get built and thus powerless to get their crews working more productively. That conclusion can lead to a disastrous outcome.
You CAN greatly influence the way jobs go in and deploy processes that will keep your crews highly efficient. We're about to give you the tools that do just that.
Let's address the first issue by putting a nearly taboo subject on the table. Some generals are much better than others at keeping projects flowing smoothly. It is a fact of life in the construction industry.
Client-centric general contractors keep their subs sequenced and organized. They force decisions from owners and design teams before they hold up field progress. They listen to subcontractors, treat them with respect, and make sure everything they are owed is provided on time. Client-centric general contractors worry as much about completing the project quickly and professionally as they worry about saving a buck. Client-centric general contractors act more like a partner than a dictator.
How does that apply to you?
Sooner or later, you will find yourself working for one of the many (most?) generals who is not client-centric. Use the tools to help you force the general contractor, design team, or owner to make timely decisions and provide timely information.
Before you go off thinking that all of your problems are caused by outsiders, realize that most of the field inefficiencies we've witnessed were self-inflicted.