The Contractor’s Best Friend /11-06-2013/ Driving “Non-Value-Added” Efforts Out of Your Company

To access the remainder of this piece of premium content, you must be registered with For Construction Pros.Already have an account? Login

Register in seconds by connecting with your preferred Social Network:

Required
Required
Required
Required
Required
Required
Required
Required
Required
Required

Have you ever noticed how hard it is to get rid of things around your house?  Most of us have that one drawer that seems to have all sorts of “trinkets” of the past including coupons, unused gift certificates, letters or cards we forgot to send or open three years ago, our favorite pen we thought we had lost, a check from a customer we thought never arrived etc.

In my home our drawer with “lost treasures” is in the kitchen.  I recently found coupons for cat food…and we don’t own any cats.  But, never throw away a saving, right?

Similar to doing some “spring cleaning” in our personal residence, we might also look to clean out those efforts that we often keep around our companies but that provide little to no value.  Let’s consider a few examples below and see how many you may have around your company.

Non-Value-Added Efforts

  • Maintaining old software when new has been implemented
  • Taking extra tools or material “just in case”
  • Keeping higher inventory of bits, blades, handles, belts etc. because you always want to have enough
  • Requiring crews to measure time, quantities, or hours to the very small “nth” second, ounce, or minute
  •  If checking quality of work twice is good then checking the work four or five times is better
  • Adding cost to a project by taking a seven-person crew to complete job that could effectively be completed with a crew of five
  • Using larger equipment for a project that doesn’t require it

Contractors really need to be consciously aware of how they are executing work.  Is the work being completed being done in a profitable manner?  Is the work being completed absolutely necessary to meet the needs of the customer and provide the profitability we desire to achieve?

Why is considering whether or not something we do, internally or externally, adds value to performance important?  Because it often reflects how much wasted money we may be spending, or not making, due to decisions that are foolish at worst or naïve at best.  Consider a few things to assess whether your actions are adding value to the way you are doing business or not.

  1. Does the action taken make the customer want to do more business with us as a contractor?
  2. Does the action taken cost me more time, materials or money?
  3. Do I get paid, or reimbursed, for the action taken?
  4. Does the action taken duplicate action already taken?
  5. Does the action taken save anyone any time?
  6. Is the action taken a “cost of doing business” sort of thing?

Trust me, I’m all in favor of decisions and action that empowers our people to meet the customers’ needs, but we need to be very careful that everything we do really does meet their needs.  An office worker or crew member who does not want to make any mistakes might have a tendency to overwork a process or check a result more often than necessary to insure that it is perfect.

We can also have the opposite of the previous statement. For example, we might have employees who feel like as long as what they do is “close enough,” then that’s OK too.  Certainly we don’t want to be cheap about every decision or action either.

So, how should we look at driving Non-Value-Added efforts out of our company?  Here are a few techniques that can help you address this challenging issue:

  • Don’t assume more is better. This old mind trick is still common for many workers, especially those who spend little time planning and even less time thinking out the most effective way to complete tasks.  Therefore, require all your workers to be more consistent on lining-out their daily and weekly work and you will immediately realize less money being spent.
  • Separate Customer Needs from Wants. Admittedly, even customers cannot always distinguish between what they want from what they really need.  A simple rule of thumb is that “wants” normally cost more than “needs.” Now, if the customer wants your crew’s extra attention to safety yet expects you to provide such an effort for the cost of a “need,” then you must educate the customer on the effectiveness of providing the “need.”  Meeting customer wants, when they are not paying for it, can drain a contractor of time and profits!
  • Identify Any Work Process that Requires Duplication & Delete! Any work process that requires any duplication of effort should be seriously reviewed with the likely result of deleting one of the efforts.  For example, I’ve observed contractors who have multiple “inspectors” on proposals before they go to customers.  Now, if you fear that an estimator is going to make mistakes, and install as many as three or four individuals to review the bid, then you might have the wrong person doing the estimating.  Having another pair of experienced eyes review the bid can be very helpful -- but adding a third, fourth, even fifth “inspector” to the process slows it down and never addresses the trust we have in those who estimate.  Don’t be foolish; certainly larger or complicated jobs might require more observers but just be aware of any process that you are duplicating and stop the practice!
  • “Map Out” Work Processes and Eliminate Any Wasted Step. Here’s a huge step in the right direction.  Look at each of your important work processes such as:
  • bidding
  • calling on customers
  • loading trucks and trailers
  • setting up the job site
  • completing actual work
  • cleaning up a job site
  • maintaining equipment and vehicles
  • sending a correct bill to the correct address
  • processing checks correctly the first time
  • getting payroll completed and accurately

To “map out” a work process is to line-out the actual steps performed to execute the task and in the exact order needed.  As you map out a work process you will then want to look for extra or duplicated steps and eliminate them.  Extra steps or duplicated efforts cost money, slow the process down, and essentially sabotage belief in the work process by the worker involved.

  • When Purchasing New…Get Rid of “Old” Practices. Another reality for many contractors is failing to eliminate an older practice when a new practice has been installed.  I’ve watched owners, superintendents, crew foremen, and office managers maintain their own little paperwork effort on the side while also completing a new software execution.  This continues to be true for many workers when new software has been bought and installed with the intention of replacing the older version.  As the saying goes, “old habits are hard to break,” but this is one case where driving any and all Non-Value-Added efforts from the company is wise.

While you never want to “throw the baby out with the bath water” you also can ill afford keeping any effort that is not required.  With most contractors facing tough competition and tight estimates, any unnecessary effort that doesn’t go directly to making our customers satisfied or that adds unneeded cost to our operation should be driven out of our thinking and execution!

So periodically clean out your old “kitchen drawer” and rid yourself of any old cat food coupons!  (Unless you own a cat, of course!)

Drive those Non-Value-Added efforts far from your business and bring in cost-effective thinking and execution!

Brad Humphrey  

© 2013 Brad Humphrey, Pinnacle Development Group/The Contractor’s Best Friend™

 

Loading