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Improving Production Efficiency. David Ellings David Rosebrook Business Mentors 2006 DKC Conference, Toronto. What’s On Tap. Industry standards Efficiency myths and facts Study profile A case study The results The hidden effect The bottom line Simple steps to improve your position

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Improving production efficiency l.jpg

Improving Production Efficiency

David Ellings

David Rosebrook

Business Mentors

2006 DKC Conference, Toronto


What s on tap l.jpg
What’s On Tap

  • Industry standards

  • Efficiency myths and facts

  • Study profile

  • A case study

  • The results

  • The hidden effect

  • The bottom line

  • Simple steps to improve your position

  • Building the team


Measuring success l.jpg
Measuring Success?

Employees

Equipment

Building Size

Volume


Slide4 l.jpg

SALES:

$5,000,000

EXPENSE:

$4,850,000

PROFIT:

$150,000 or 3%

SALES:

$750,000

EXPENSES:

$600,000

PROFIT:

$150,000 or 20%


Slide5 l.jpg

Risk

Reward


Naics code l.jpg
NAICS Code

Industry Segment

Profit

8%


Slide7 l.jpg

0 – 22%

15 – 30%

50 – 80%


Slide8 l.jpg

Direct Costs

20 – 50% Material/Equipment

50 – 90% Labor

50 – 80%

DIRECT COSTS


Slide9 l.jpg

50 – 90% Labor

Focus For Efficiency


Top five inefficiencies l.jpg
Top Five Inefficiencies

  • Materials

    • Buying smarter and using wiser

  • Speed of work

    • Get your employees to move faster through the assigned tasks

  • Amount of management

    • Train your staff to function in the field with less management oversight

  • Pricing

    • Estimating program pricing problems

  • Project size

    • Advance to larger projects…they are more substantially more profitable

  • Myths


    Ratio difference efficiency l.jpg
    Ratio Difference Efficiency

    1% increase in efficiency

    results in a 5% increase in profits


    True inefficiencies l.jpg
    True Inefficiencies

    • Scheduling

      • Time management and efficient use of resources

    • Material procurement

      • Multiple trips, retaining stock, price shopping

    • Accuracy

      • Time card slippage, accountability, management

    • Drive time

      • Most significant indicator, liability, waste, waste, waste


    Study profile l.jpg
    Study Profile

    Executive Summary

    • Productivity trends carry a large impact on profitability

    • Utilize detailed data gathered over three years to analyze efficiency

    • Productivity focused on production employees and management processes

    • Clear conclusions were able to be drawn by the results


    Introduction l.jpg
    Introduction

    • Background

      • Productivity is the key factor of economic health

      • Industry productivity is not well defined

      • Rely on productivity figures from sources of questionable credibility

        • Exactware, Means etc.

      • Ineffective management results

      • Need to offset the tightening of profits by the insurance industry


    Introduction15 l.jpg
    Introduction

    • Objectives

      • Study efficiency trends over an extended period

      • Create an awareness

      • Counter insurance industry pressure on margins

      • Increase management tools

      • Nothing matters unless we increase….

        $ NET PROFITS $


    Introduction16 l.jpg
    Introduction

    • Scope

      • Defined:

        The American Association of Cost Engineers

        “Productivity is a relative measure of labor efficiency, either good or bad, when compared to an established base or norm”

      • Its nature creates difficulties in tracking it as an absolute value over time.

      • Information is gathered against movements of an established base, or benchmark value


    Introduction17 l.jpg
    Introduction

    • Methodology

      • Study detailed movement of 82 production employees

      • Focus on inefficient time and not on production cycles

      • Created buy-in through incentives and self-improvement

      • Used sampling and statistical analysis techniques to establish and confirm results

      • Sampled across all company production areas

      • Gathered data very quietly


    Affecting factors l.jpg
    Affecting Factors

    • Project Uniqueness

      • Each job is different and unique

        • Environmental factors

          • Landscape, weather, and physical location

        • Aesthetic factors

          • Level of quality required, material selection, existing conditions

        • Human factors

          • Expectations of adjusters, owners, managers etc.

      • Uniqueness requires modification of the process…creating an inefficient learning curve at the beginning stages of each project activity


    Affecting factors19 l.jpg
    Affecting Factors

    • Technology

      • Hugh effect on overall productivity

      • Modify skill requirements

        • Create difficulties in separating contributions of technology, management and labor to the efficiency

    • Less motivation to add technological changes when the associated labor is not expensive

    • Sometimes expensive and only a temporary strategic advantage


    Affecting factors20 l.jpg
    Affecting Factors

    • Personnel

      • Management

        • Level of training, accountability, and knowledge

        • Documented studies – poor management activities account for over 50% of the inefficiencies

      • Production

        • Cross training, flexible contract increase efficiency

        • The fall of “real wages” within the industry

          • Old skills retire...young talent goes else ware

          • Industry tends to retire or fall off at an earlier age

        • Lack of formal training

          • Lowest of any formal sector of the economy

          • Workforce tends to be transient, causing a reluctance to invest capital to train


    Case study assumptions l.jpg
    Case Study Assumptions

    Employee

    • Carpenter

      • Generalist to handle multiple tasks

    • Wage: $25/hour

    • Burden: 50%

    • Total cost to employee: $37.50/hour

    • Work year available: 1960 hours/year

      • 2080 hours minus 3 weeks for holidays, vacation and sick time.

    • Expected production: $100/hour


    Scenario one l.jpg
    Scenario One

    7:00 AM arrive at your facility to get assignment and supplies

    7:00 – 7:30 drive to work site

    7:30 – 9:30 install trim (productive work)

    9:30 – 9:45 break (paid)

    9:45 – 11:30 finish trim and paint (productive work)

    11:30 – 12:00 lunch (unpaid)

    12:00 – 1:45 install interior doors (productive work)

    1:45 – 2:00 break ( paid)

    2:00 – 3:00 install door hardware (productive work)

    3:00 – 3:30 drive back and unload items and paperwork


    Scenario one23 l.jpg
    Scenario One

    Results

    • 8 hours worked and paid

    • $200 wages + $100 burden = $300 cost

    • 6.5 hours productive revenue generation

    • 1.5 hours unproductive time paid

      19% of paid time unproductive


    Scenario two l.jpg
    Scenario Two

    7:00 AM arrive at your facility to get assignment and supplies

    7:00 – 7:30 drive to work site

    7:30 – 7:45 get coffee then discuss project, activities last evening and other personal items with the rest of the production crew

    7:45 – 8:00 unload supplies and tools from truck and set-up to work

    8:00 – 9:00 install trim (productive work)

    9:00 – 9:15 break (paid)

    9:15 – 9:20 put away coffee, doughnuts and items from break


    Scenario two25 l.jpg
    Scenario Two

    9:20 – 10:00 install trim but a scope clarification problem arises (productive work)

    10:00 – 10:15 discuss project with home owner and/or call project manager for clarification

    10:15 – 10:30 install trim (productive work)

    10:30 – 10:40 at 10:20 the carpenter realized that there wasn’t enough trim to complete the work, so a discussion about this issue occurs with the crew and the carpenter winds down his activities to get ready to leave for a store

    10:40 – 11:00 drive to Home Depot (even though there was another lumber yard 5 min away but was unknown to the carpenter)


    Scenario two26 l.jpg
    Scenario Two

    11:00 – 11:30 locate trim in store, pick-up a couple of other supplies on your account, look at a the new compound miter saw, look at bath fixtures for a home remodel or side job, go to pro-desk to check out, converse with pro-desk manager about the weather or sports, load items into truck and leave

    11:30 – 11:40 stop for gas and snacks

    11:40 – 12-00 drive back to project

    12:00 – 12:30 lunch (unpaid)

    12:30 – 12:40 conclude lunch and put away lunch supplies, clean-up and use restroom


    Scenario two27 l.jpg
    Scenario Two

    12:40 – 1:00 install last piece of trim ( project completed for the day, other supplies to arrive tomorrow)

    1:00 – 1:15 wind down from activities and load vehicle

    1:15 – 1:30 drive to a different work site

    1:30 – 1:45 set-up tools and work at new site, also greet and discuss things with crew/homeowner

    1:45 – 2:15 install windows (productive work)

    2:15 – 2:30 break (paid)

    2:30 – 2:35 put away coffee, doughnuts and items from break


    Scenario two28 l.jpg
    Scenario Two

    2:35 – 2:50 install insulation (productive work)

    2:50 – 3:00 wind down for day, load truck and leave

    3:00 – 3:30 return to facility, drop of time sheet/paperwork and unload supplies and debris


    Scenario two29 l.jpg
    Scenario Two

    Results

    • 8 hours worked and paid

    • $200 wages + $100 burden = $300 cost

    • 3.0 hours productive revenue generation

    • 5.0 hours unproductive time paid

      63% of paid time unproductive


    The cost of inefficiency l.jpg
    The Cost of Inefficiency

    Scenario One

    Scenario Two

    Industry Average

    1.5 hrs =

    $56.25/person/day =

    $13, 781/year

    5.0 hrs =

    $187.50/person/day =

    $45,937/year

    2.6 hrs =

    $99.00/person/day =

    $24,255/year





    Lost revenue l.jpg
    Lost Revenue the inefficient time spend….

    • 2080 hrs in a work year = $208,000

      • 3 weeks removed for vacation, holidays, etc.

    • 1960 possible productive hours in a year

    • At $100/hr = $196,000/person/year of revenue generation


    Lost revenue35 l.jpg
    Lost Revenue the inefficient time spend….

    Scenarios

    • $36,750/yr of lost revenue per person

      • 367.5 hrs unproductive = 1592.5 hrs productive

    • $122,500/yr of lost revenue per person

      • 1225 hrs unproductive = 735 hrs productive

        Avg. $64,680/yr of lost revenue per person

      • 646.8 hrs unproductive = 1313.2 hrs productive


    What does all of this mean l.jpg
    What Does All of This Mean? the inefficient time spend….

    Company Assumption

    • 1,000,000 revenue for year

      • 60% direct costs = $600,000

        • 25% materials/equipment = $150,000

        • 75% direct labor = $450,000

      • 25% overhead = $250,000

      • 15% profit = $150,000


    What does all of this mean37 l.jpg
    What Does All of This Mean? the inefficient time spend….

    Company Assumption

    • We will use the average efficiency to test

      1/3 of production day is inefficient

      2 hours 38 minutes non-productive

      5 hours 22 minutes productive time


    Slide38 l.jpg

    1% increase in efficiency the inefficient time spend….

    results in a 5% increase in profits


    Small increase big gain l.jpg
    Small Increase, Big Gain the inefficient time spend….

    5% increase = 25% more profit

    • Productive time

      • 5hr 22min to 5hr 37min…..or only 15 min/day

      • 12,000 hrs of labor in our example

      • 1,500 personnel days per year

      • 1,500/days X .25hrs X $100 =

        $37,500increase inPROFITS


    Results l.jpg
    Results the inefficient time spend….

    5% increase = 25% more profit

    • 1,000,000 revenue increased to 1,037,500

      • 60% direct costs = $600,000

        • 25% materials/equipment = $150,000

        • 75% direct labor = $450,000

      • 25% overhead = $250,000

      • 18% profit = $187,500


    Results41 l.jpg
    Results the inefficient time spend….

    5% increase = 25% more profit

    Therefore with the exact same costs the company was able to produce an increase of $37,500 of additional revenue which increased the profit by the expected 25% from $150,000 to $187,500 with only 15 min of increased production per person each day.


    Results42 l.jpg
    Results the inefficient time spend….

    5% increase = 25% more profit

    In addition, in order to capture the same profit of $187,500 without increasing the efficiency would require a 25% increase in the revenue or an additional $250,000 of sales….

    Which is the easier improvement?


    Actual results l.jpg
    Actual Results the inefficient time spend….

    History

    • 62% increase in employee retention

    • With incentives wages increased 6½ X greater then rate of inflation

    • 18% increase in margins

    • 76% decrease in paid none revenue travel time

    • 36% decrease in management related inefficiencies

    • 54% reduction in production inefficiencies


    Actual results44 l.jpg
    Actual Results the inefficient time spend….

    NET PROFITS

    42.4%


    Slide45 l.jpg

    Break Time the inefficient time spend….

    10 Minutes


    Recap l.jpg
    Recap the inefficient time spend….

    • Direct costs represent 50% to 80% of the companies total expenditures

    • Labor represents 50% to 90% of the total job costs on a project


    Recap47 l.jpg
    Recap the inefficient time spend….

    • Direct costs represent 50% to 80% of the companies total expenditures

    • Labor represents 50% to 90% of the total job costs on a project


    True inefficiencies according to dave l.jpg
    True Inefficiencies According to Dave the inefficient time spend….

    • Scheduling

    • Materials procurement

    • Accountability of employees

    • Travel time


    A solution l.jpg
    A Solution the inefficient time spend….

    • Build a construction team that is accountable for the outcome of the project from the time the first call is received until the final check is cashed

    • Proactively plan the project and then execute the plan

    • Measure your progress and outcome


    Contents l.jpg
    Contents the inefficient time spend….

    • Building the construction team

    • Planning the project

      • Estimating

      • Budgeting

      • Scheduling

      • Materials

    • Measuring our progress


    Building the construction team l.jpg
    Building the construction team the inefficient time spend….

    Two different models for production

    • Production manager

    • Construction team


    Production manager l.jpg

    PROS the inefficient time spend….

    Specialized sales team

    Specialized construction team

    CONS

    Poor communication

    Lack of accountability

    Us against them mentality

    Production Manager


    Construction team l.jpg

    PROS the inefficient time spend….

    Team environment

    Improved communication

    One person accountable for the entire project from start to finish

    Easy to duplicate

    CONS

    Potentially uneven sales from month to month

    Potential for poor or slow production

    Construction Team


    Progression of a construction team l.jpg
    Progression of a Construction Team the inefficient time spend….

    • Project manager – sell, write, run

    • Project manager and coordinator or superintendent

    • Project manager, coordinator and superintendent


    Project manager l.jpg
    Project Manager the inefficient time spend….

    • Responsible for everything

      • Sales

      • Marketing

      • Estimating

      • Production

      • Collections

    • Limited by time and energy

    • Typically will produce from $500,000 to $1,000,000 per year


    Project manager and coordinator or superintendent l.jpg
    Project Manager and Coordinator or Superintendent the inefficient time spend….

    • Project manager is responsible for everything

    • Hires to compliment his/her strengths

    • Delegates responsibilities to the coordinator or superintendent

    • Needs to produce from $1,250,000 to $1,750,000 per year


    Project manager coordinator and superintendent l.jpg
    Project Manager, Coordinator and Superintendent the inefficient time spend….

    • Project manager is responsible for everything

    • Delegates responsibilities to the coordinator and superintendent

    • Needs to produce $1,750,000 or more each year

    • Top dollar amount depends on project size and location


    Building the construction team58 l.jpg
    Building the Construction Team the inefficient time spend….

    • The players

    • Their responsibilities


    The players l.jpg
    The Players the inefficient time spend….

    • Project manager

    • Coordinator

    • Superintendent

    • Lead carpenters or lead technicians

    • Field staff

    • Temporary employees

    • Subcontractors


    Project manager responsibilities l.jpg
    Project Manager Responsibilities the inefficient time spend….

    • Sales, Sales, Sales

    • Marketing

    • Managing the construction team

    • Accountable for the teams outcomes


    Coordinator responsibilities l.jpg
    Coordinator Responsibilities the inefficient time spend….

    • Administrative assistant for the team

    • Budgeting

    • Communications with adjuster and homeowners

    • Assemble project books

    • Keeping computer software up to date

    • Helping with collections

    • Make the project manager look good!

    • 95% of this persons time is spent in the office

    • Compensation is around $38,000 per year plus bonus


    Superintendent responsibilities l.jpg
    Superintendent Responsibilities the inefficient time spend….

    • Scheduling

    • Quality control

    • Training

    • Keeping projects on budget and on schedule

    • Manage subcontractors

    • Customer selections

    • Order materials

    • Manage the homeowners expectations

    • Safety

    • 95% of this persons time is spent in the field

    • Compensation is around $45,000 per year plus bonus


    Lead carpenter l.jpg
    Lead Carpenter the inefficient time spend….

    • Works on the project

    • Manages the project

    • Quality control

    • Safety

    • Manages the homeowners expectations

    • Manages subcontractors

    • Keeps site documentation up to date

    • Works on 1 to 3 small projects at a time or one large project (over $15,000)

    • Compensation is in the $18 to $28 per hour range


    Field staff l.jpg
    Field Staff the inefficient time spend….

    • Carpenters, helpers, painters, drywallers, etc…

    • Keep the number of field staff small

    • Travel, meetings and other non-productive times are magnified

    • When work is slow they are on “shop time”

    • When work is slow painters are framing!

    • Tendency to overstaff jobsites


    Temporary employees l.jpg
    Temporary Employees the inefficient time spend….

    • Labor

      • Good source of labor

      • There are pros and cons

      • They only work when we have jobs

    • Skilled labor

      • Acceptable source of skilled labor

      • You have to be organized

    • Some insurance programs are trying to limit the use of temporary employees


    Subcontractors l.jpg
    Subcontractors the inefficient time spend….

    • Fixed price for work

    • They need to be managed

    • You do not pay for inefficiencies

    • Small subcontractors are better suited for our margins


    A system for improving efficiency l.jpg
    A System for Improving Efficiency the inefficient time spend….

    • By design

      • Keep the system simple and easy to use in the office or in the field

      • Easy to duplicate with different levels of employee proficiency

      • Inexpensive

      • Expandable

      • Does not break down when project volume increases

    • Could be the most difficult thing you do!


    Start with the end in mind l.jpg
    Start With the End in Mind the inefficient time spend….

    • What does the lead carpenter need to successfully complete the project?

      • Scope of work

      • Budget

      • Schedule

      • Customer selections

      • Materials


    The estimate l.jpg
    The Estimate the inefficient time spend….

    • Scoping the loss

    • Sketch

    • Estimate detail

    • Estimate timelines

    • Negotiations

    • Open items


    Scoping the loss l.jpg
    Scoping the Loss the inefficient time spend….

    • Consistent

    • Accurate

    • Fair

    • Detailed

    • Notes

      • For the adjuster and his boss

      • For the superintendent and lead carpenter

    • Sketch


    Estimate timelines l.jpg
    Estimate Timelines the inefficient time spend….

    • Timelines

      • 24 hours – under $10,000

      • 48 hours – under $50,000

      • 72 hours – over $50,000

    • Exceptions

      • Specialty items

      • Subcontractors

      • Open items


    Open items l.jpg
    Open Items the inefficient time spend….

    • Line items in the estimate that do not have firm dollar amounts

    • Allow the estimate to be completed and uploaded on time

    • Allow for future supplements

    • Strong potential that supporting invoices and other documentation will be required


    Negotiations l.jpg
    Negotiations the inefficient time spend….

    • Meet the adjuster at the loss site to scope the project

    • Understand the estimating software better than the adjuster

    • Argue scope not price


    The budget l.jpg
    The Budget the inefficient time spend….

    • Markup vs. Margin

    • Calculating the sales price

    • Calculating the budget amount

    • Different budgeting tools

      • Xactimate

      • Excel


    Definitions l.jpg
    Definitions the inefficient time spend….

    • Direct costs are the actual expenses – labor, materials, subcontractors and permits that go into each project.

    • Markup is the amount added to the direct job costs to get the selling price – expressed as a percentage of direct costs.

    • Gross profit is the amount of money remaining after the direct costs have been deducted.

    • Gross margin is the difference between direct job costs and the selling price – it is expressed as a percentage of the selling price.


    Slide76 l.jpg

    Gross Margin the inefficient time spend….

    50

    45

    40

    35

    33

    30

    25

    20

    16.66

    Markup

    100

    82

    67

    54

    50

    43

    34

    25

    20 O&P

    }

    Target


    Using markup to find the sale price l.jpg
    Using Markup to Find the Sale Price the inefficient time spend….

    • Target is a gross profit of 40% no O&P

      • Markup direct costs by 67%

      • Gross profit equals 40.1%

    • Target is a gross profit of 40% with O&P

      • Markup direct cost by 40%

      • Add overhead and profit 20%

      • Gross profit equals 40.5%

    • Gross profit = (contract amount – direct costs) -1

      contract amount


    Calculating the budget amount l.jpg
    Calculating the Budget Amount the inefficient time spend….

    • With overhead and profit

      • Budget = contract * (1-(gross profit))

      • Budget = $167 * (1-(40%))

        = $167 * (.6)

        = $100.20


    Other ways to calculate the budget amount l.jpg
    Other Ways to Calculate the Budget Amount the inefficient time spend….

    • Budgeting the line item before O&P using factors

      • 1.3 = 36%

      • 1.4 = 40%

      • 1.5 = 45%

      • 1.6 = 48%

    • Budget = contract /1.2/1.4 or line item /1.4

      = $167 / 1.2

      = $139.2 / 1.4 = $139.2 / 1.4

      = $99.50 = $99.50


    Budgeting tools l.jpg
    Budgeting Tools the inefficient time spend….

    • Xactimate

      • Factoring

      • Work orders

    • Excel spreadsheet


    Xactimate factoring l.jpg
    Xactimate Factoring the inefficient time spend….

    • Xactimate version 2002

      • Create a duplicate estimate

      • Grouping screen

      • Highlight all rooms

      • Pull down the EDIT menu

      • Go to FACTORING

      • Highlight activity and change factor

      • Do this separately for each activity

      • When complete press OK


    Factoring table for xactimate l.jpg

    Factor the inefficient time spend….

    75

    70

    50

    25

    Gross profit

    37.5%

    42%

    58.5%

    79%

    Factoring Table for Xactimate


    Xactimate work order l.jpg
    Xactimate Work Order the inefficient time spend….

    • Xactimate Version 2002

      • Go to work order

      • Set up vendor as “ Budget”

      • Select all categories

      • Highlight categories and set factor using factoring table for desired gross profit

      • Follow instructions until finshed


    Excel spreadsheet l.jpg
    Excel Spreadsheet the inefficient time spend….

    • Easy to manipulate and change data

    • Able to track costs and changes throughout project

    • Can be tailored to your company

    • Uses your companies labor and burden rates

    • Separates labor, materials, equipment, subcontractors

    • Example of a budgeting spreadsheet


    The schedule l.jpg
    The Schedule the inefficient time spend….

    • A schedule is simply a plan for carrying out a project, indicating when each operation should begin and when it should end.


    Types of schedules l.jpg
    Types of Schedules the inefficient time spend….

    • Manual

      • Calendar

      • Scheduling board

      • Work orders

      • Spreadsheet (Gant)

    • Computer program

      • JPP

      • Microsoft Project

      • Plethora of others options


    Rules for a successful schedule l.jpg
    Rules for a Successful Schedule the inefficient time spend….

    “Under promise and over deliver”

    • List the work trades (from your estimate)

    • Put the trades in the proper sequence

    • Find the time allotted for each trade (from your budget)

    • Schedule each trade in its proper sequence showing start and stop dates

    • Allow plenty of time during the schedule for unplanned events


    Scheduling l.jpg
    Scheduling the inefficient time spend….

    • Simple, easy to revise, and take as little effort as possible

    • Tracks what work is complete

    • Tracks the start date of upcoming trades

    • Sets the completion date for trades, inspections, materials, selections

    • Sets expectations and accountability

    • Has solid must hit dates


    Materials and selections l.jpg
    Materials and Selections the inefficient time spend….

    • Making the materials list

    • Getting materials to the job site

      • At project start up

      • While the job is in progress

      • When the job is done

    • Customer selection process


    Making the materials list l.jpg
    Making the Materials List the inefficient time spend….

    • Print components list from Xactimate

    • Site visit

      • Good time for project manager to hand-off project to the superintendent

      • List of all homeowner selections prepared in advance by coordinator

      • Confirm lengths, styles, colors of all materials

      • Compare actual materials to components list

      • Leave site with detailed list of materials to complete the project

      • Use vendors for specialty items such as windows, cabinets, and doors


    Getting the materials to the job site l.jpg
    Getting the Materials to the Job Site the inefficient time spend….

    • Delivery by supplier

      • Job site

      • Warehouse

    • Delivery service

      • Good for small pick-ups

      • Cost around $25

      • Keeps your lead carpenters on the job site

    • In-house delivery person

      • Job costed

      • Needs to have a set schedule for deliveries

    • Will-call


    While the job is in progress l.jpg
    While the Job is in Progress the inefficient time spend….

    • Large projects

      • Order materials by phase and have them delivered

    • Small projects

      • Order all materials before the project starts and have them at the site, warehouse or will-call

    • Daily phone call by lead carpenter

      • Materials for tomorrow

      • Ask “ What materials do you need tomorrow, or to finish out the project”

    • Site visit by superintendent


    When the project is complete l.jpg
    When the Project is Complete the inefficient time spend….

    • Leave all project specific materials behind for the homeowner – paint, trim, scraps

    • Throw all scraps and project specific materials away

    • Lead carpenter and superintendent remove left over materials

      • Return to store – superintendent

      • Return to warehouse – superintendent

      • Take to next project – lead carpenter


    Homeowner selections l.jpg
    Homeowner Selections the inefficient time spend….

    • Must be in writing and signed by the homeowner

    • List of selections is generated by the coordinator using the estimate

    • Small project under $25,000 selections made before work begins

    • Large projects selections made by the time demolition and cleaning is complete


    Measurements l.jpg
    Measurements the inefficient time spend….

    • Job cost-outs

    • Accountability reports

    • Production meetings


    Job cost reports l.jpg
    Job cost reports the inefficient time spend….

    • Manual

      • Field report by superintendent or lead carpenter

      • Spreadsheet used by coordinator or project manager

    • Accounting software


    Accountability reports l.jpg
    Accountability Reports the inefficient time spend….

    • Production report

      • Budget vs. actual cost

    • Project manager efficiency

      • Length of time to complete estimate

      • Length of time to get contract signed

    • Production efficiency

      • Measures estimated completion time vs. actual completion time


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    Production Meetings the inefficient time spend….

    • Weekly production meeting

    • Daily team meeting


    Strategies for corrections l.jpg
    Strategies For Corrections the inefficient time spend….


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    Strategies For Corrections the inefficient time spend….

    • Put production on a pedestal

      • Plan and use your production staffs 2080 hours as your first priority


    Production l.jpg
    Production the inefficient time spend….

    • Create and post and organization chart

      • Make sure each production person know where they lay and who supervises them

    • Emphasis safety and safety training

      • Let them know you are interested in their well being

    • Create a detailed job description for each employee

      • Change them as the positions change

    • Create a review form holding them accountable for the items in the job description


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    Production the inefficient time spend….

    • Include them in meetings

    • Offer training incentives

    • Have a clear and concise path for career mobility

    • Remove cancers immediately

      • Hire tough…fire fast

    • Create and implement an incentive plan

      • Both personal and team based

      • Small perks and recognition go a long way


    Production103 l.jpg
    Production the inefficient time spend….

    • Remember:

      You can’t manage what you can’t measure

      -Jack Welch

      And

      Trust but verify

      -Ronald Regan (with special credit to Phil Rosebrook Sr.)


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    Strategies For Corrections the inefficient time spend….

    • Put production on a pedestal

      • Plan and use your production staffs 2080 hours as your first priority

    • Monitor and reduce drive time

      • Monitoring is the blood test of your businesses health check-up

      • Single most reducible and inefficient time spent


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    Drive Time the inefficient time spend….

    • Start/stop day at job site

      • Production staff should start and end day for all non-emergency work at the job site

      • Use technology to monitor the process

      • Review company vehicle policy

      • Pay mileage instead of allowance

        • This will allow a tracking mechanism for drive time

      • Add runner for material delivery

        • Better yet use your suppliers to deliver material

          • The numbers do not support staff material procurement


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    Strategies For Corrections the inefficient time spend….

    • Material Handling

      • Dispose of extras

      • Look critically at what you stock

      • Keep production from material procurement at all costs


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    Material Handling the inefficient time spend….

    • Don’t return unused commodity stock to your warehouse

      • Dispose on site

      • Give to property owner

    • Production personnel should produce and not purchase

    • Avoid the temptation to stock most supplies.

      • The savings on most bulk purchases are far offset by the cost of storage and delivery

      • Utilize suppliers that will deliver even for a fee


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    Strategies For Corrections the inefficient time spend….

    • Material Handling

      • Dispose of extras

      • Look critically at what you stock

      • Keep production from material procurement at all costs

    • Add technology

      • Computer, faxes, PDA’s

      • GPS, Sprint/Nextel systems


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    Technology the inefficient time spend….

    • Cost vs. benefit

      • Make sure it makes sense financially and logistically

    • Keep production staff out of office

      • Use faxes or computers to send daily time sheets

      • Enter time data in real time through PDA’s or phones

    • Use GPS to track assets, both organic and inorganic


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    Challenges of having a mobile workforce the inefficient time spend….

    • No visibility into your team

    • High overtime costs

    • Manual timecard processing

    • High mileage costs

    • Can’t allocate your resources effectively

    • Difficult to communicate with your team

    • Manual dispatching

    • Manual paperwork chaos


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    Mobile Vendors the inefficient time spend….

    Gearworks (gearworks.com)

    Etrace:Worksmart

    Aligo (aligo.com)

    WorkTrack

    Portable Internet (portableinternet.com)

    GPS Mobile Workforce Management

    Westlake Software (westlakesoftware.com)

    AIR Mobility

    Time Card (timecard.econz.com)

    Time Card (Verizon Wireless)


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    etrace Workzones the inefficient time spend….

    • All landmarks and jobs are geo-coded & labeled by stop name.

    • A configurable Workzone surrounds each stop to define its boundaries for GPS collection

    • When a vehicle enters the Workzone, etrace starts to monitor the duration to determine if it should record this as a stop

    • When a vehicle is in a Workzone for a specified duration, etrace marks this as a stop and records details, such as distance traveled and time of entry.

    • If a vehicle is stopped in a Workzone that does not correspond to a landmark or job, the stop is logged as an “unscheduled” stop..”

    Stop is Recorded

    Potential Stop

    Workzone


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    Worker Map Display of Exception Time the inefficient time spend….


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    Summary the inefficient time spend….

    • Ability to transform the mobile workforce for the field service industry.

    • Eliminate manual processes increasing accuracy and costs.

    • Increase customer response times

    • Decrease mileage and overtime costs

    • Leverage your IT and backend system investment

    • Fast return on investment


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    Thank You the inefficient time spend….

    Questions