The remodeling industry has a growing problem on its hands that must be addressed immediately.
Great Practices: Untangling the Supply Chain
Regardless of whether the 'supply' arrives on the back of a flatbed truck or behind the wheel of a panel van, remodelers look for reliability, quality and a professional attitude from their suppliers.
Remodeling is an odd hybrid: a service business that creates a product. As such, remodelers necessarily must rely on suppliers for the material to build that product. They also have to depend on other service providers — trade contractors — to help pull the project together.
Regardless of whether the "supply" arrives on the back of a flatbed truck or behind the wheel of a panel van, remodelers look for reliability, quality and a professional attitude from their suppliers.
Brothers Dan Stebnitz, Gary Stebnitz and Dave Stebnitz, co-owners of Stebnitz Builders, Delavan, Wis., deal directly with vendors who provide such materials as lumber, windows and lighting. However, they leave the acquisition of commodity materials used by trade contractors up to the trade contractors themselves.
"We try to set up relationships with subcontractors so that when we need them, they’re there," Dan says. "We use the same ones on almost every job that we do. We pay them quickly after their job is done. And we treat them the way we’d like them to treat us."
That includes letting the trade contractors know exactly what is expected from them. To take full advantage of the subs’ expertise and to keep them fully informed, Stebnitz pulls them into the project as soon as possible. "The salesman gets them involved in the bidding process so they know exactly what’s going into the job and about when the work will be ready for them," Dan says.
Stebnitz, the 2001 National Remodeling Quality Award Silver Award winner, has developed a subcontractor agreement that all trades must sign to get the job. The agreement covers just about every aspect of a sub’s relationship with Stebnitz, particularly as it affects the homeowner customer. It outlines general behavior on the job site, such as a ban on smoking inside the customer’s home, keeping the site as clean as possible and advance approval of any work on weekends.
The Stebnitzes based their agreement on one created by a fellow member of their Remodelers Executive Roundtable and then tweaked it to fit their company. "Obviously the agreement doesn’t solve all the problems," Dave says. "Our lead carpenters watch over things, but there are times when subcontractors are on the job site without a lead carpenter. The agreement helps them do what they’re supposed to."
Like Stebnitz, Lasley Construction (Rocky Hill, N.J.) takes a thoughtful approach to working with suppliers and trade contractors. Project estimator Randy Bannerman looks for suppliers of top-quality products that can provide quick turnaround. Bannerman has identified which of the three or four suppliers he uses in each category by each one’s strengths. He points out that while one lumberyard might excel at providing the framing for an entire project, another might be better at filling last-minute orders.
"We’ve created a database of all our suppliers over the years," Bannerman says. "So we know who does what best. Suppliers also provide a service to us; there is a lot of knowledge and questions that have to be answered as the product is being put into the project."
Lasley, winner of the NRQA Silver Award in 1999, uses contractors for every trade except finish carpentry, which is done by its crew of carpenters and — if necessary — lead carpenters, who also serve as project managers. Bannerman prefers to call trade contractors specialists and works to maintain contact with at least three specialists in each
"We can overwhelm any one subcontractor; we can give him so much work he can’t handle it all," Bannerman explains. "It also can be very cumbersome to ask a subcontractor to finish up job A and also be on job B at the same time.
"Rotating subcontractors around different projects helps us avoid having them on two jobs at once. If we can keep three or four subcontractors busy, they’ll be willing to jump for us." Using several subcontractors for each trade also ensures that Lasley always has access to a backup.
Lasley is also careful not to be the only customer of any one subcontractor. "By law, if they get more than 90% of their income from us, they have to be listed as employees," Bannerman says. "That’s not what any of us wants."
Bannerman emphasizes that communication between Lasley and its trade contractors is the most important element of a successful relationship. And he says that the project schedule, which covers every day from start to finish, is Lasley’s most important piece of communication with trade contractors.
"Every little detail is in that thing," Bannerman says. "It tells the plumber that he’s expected to be on this job on a specific day maybe four months from now. If any dates change because of a delay in material delivery, we notify everybody from that date on down the line."
If you have questions about how to get started with quality
management and improving customer satisfaction,
call the NAHB Research Center’s ToolBase Hotline at
800/898-2842 or e-mail email@example.com.