Last month in this space, I reviewed a series of market projections for 2014 from Harvard University as well as the industry’s leading associations.
The Production Machine
Tim Lassiter, owner of 8-year-old design/build firm Houston Remodeling, runs a low-overhead, low-headcount business that employs just himself, a salesperson and an office manager. Yet the company typically has seven or eight projects, usually large additions, in progress simultaneously. With few in-house bodies to throw at an emergency, advance planning and elimination of predictable emergencie...
Tim Lassiter, owner of 8-year-old design/build firm Houston Remodeling, runs a low-overhead, low-headcount business that employs just himself, a salesperson and an office manager. Yet the company typically has seven or eight projects, usually large additions, in progress simultaneously. With few in-house bodies to throw at an emergency, advance planning and elimination of predictable emergencies become essential.
He includes a completion date (though not a penalty clause) in his contracts. Upon homeowner request, Lassiter even provides a Gantt chart of the complete schedule, down to individual tasks.
The timeline is more than a pledge to the customer; it's a promise to Houston Remodeling to achieve profit goals. With labor, materials and insurance costs rising steadily, increased production efficiency is a key tactic for maintaining or growing profits.
"If the project goes beyond what we have scheduled, then we can expect to be spending more money on labor which in turn cuts heavy into our overhead and profits," Lassiter explains. "It's a win-win situation for everyone when the project meets our in-house schedule."
Yet every day, for every remodeler, challenges arise to staying on schedule. What follows are proven practices for addressing some of the most common problems.
"You have to have all selections done up front," Lassiter insists. He spends a day shopping with his clients, taking them to visit his suppliers for cabinetry, tile, carpet, appliances, lighting and plumbing. He even has them choose paint colors in advance.
"We then prepare a material selection chart and have the client sign off," he explains. "By taking one day to complete this we have knocked off two working weeks of what would have turned into many meetings and valuable time needed elsewhere."
Bob Clements, owner of Bath & Kitchen Creations in Dulles, Va., takes a similar approach. His design/build process ensures most selections are made during the design phase, before going to construction contract.
"I'd rather take an extra week to go to contract so we can get in and get out," Clements says. In addition to preventing delays down the road as clients dawdle over decisions, early selections allow for prompt purchasing of products with long delivery times.
Some delivery times you guess, and some you just know are going to be long. Experienced remodelers make ordering cabinets and windows a priority.
"We handle four different cabinetry lines, two custom and two semi-custom," says Clements. "Lead time sometimes is critical. The semi-custom I can get in three to four weeks, versus eight to 10 weeks for custom." If customers want quick turnaround, their choices are limited to the semi-custom offerings.
Next to selections, Clements says, supplier delivery times cause the most delays, and are the reason why he tries to have most materials in hand before starting production. "Everybody's busy, even the suppliers," he says. "We're having some problems right now with faucets that were ordered eight weeks ago and haven't arrived yet. We're leaning toward not using them in the future. I've already changed one client's faucets."
For Clements, waiting to have all products in hand before starting isn't practical, as his warehouse space only holds what's needed for the immediate future. Whenever possible, Clements has product delivered to the job site.
With a large space for storage and staging however, it's possible to wait to begin construction until all the products have been delivered. In fact, that's an important part of the production model for One Week Bath, a remodeling firm launched by Matt Plaskoff in late 2004. His other company, 18-year-old Plaskoff Construction in Tarzana, Calif., does large remodels and custom homes. The new firm does complete bathroom remodels — not fully custom, but not liners, either — in just one week.
All materials for One Week Bath are delivered to a large warehouse, where crews doublecheck that all the parts are included and that finishes and colors are correct. Workers preassemble as many items as possible and compile a notebook of installation instructions and special notes for each job. The entire package gets loaded on a company truck and sent to the site at once.
The One Week Bath model raises the question: What is possible? Take a look at the way you've been scheduling your projects. New material options or other market changes may have added delays you haven't noticed, or offered opportunities for efficiency you didn't realize.
Bob Clements used to order countertops right away. Now he waits until after the cabinets are set so he can take precise measurements. "Years ago, when everything was laminate tops, we could preorder and trim or sand in the field," he says. Now that customers want granite and solid surface with elaborate edge treatments, he explains, counters are too expensive to just order a little bigger.
To keep his jobs moving, Clements moved up setting the cabinets so that he could measure and order countertops earlier. "That can save a week to ten days," he says. "That's one of those things that's a critical deadline."
Ernie Hofmann, president of Hofmann Design/Build in Summit, N.J., took a different approach last year, when his firm fast-tracked a large kitchen remodel and addition for repeat clients who wanted a five-month schedule compressed into three.
"We looked at our schedule and determined which of the tasks could be done simultaneously rather than be dependent, and we stacked them as much as we could," he explains. "There are many times when we normally might have the HVAC guy come in first, and then the plumber and then the electrician so that they're not working on top of each other or their components are not interfering with one another."
Hofmann says the schedule stacking just took a little more coordination than usual, but he also made sure he had buy-in from all of his subcontractors first.
The business owner or salesperson may have a handle on materials, scope of work and overall schedule, but he or she needs to put all that information on paper for the field.
"The pre-construction package is essential for a fast-track project," says Hofmann. His company's package includes the schedule, subcontractor quotes, materials selections, finish schedule and more. "All that stuff has to be completely documented so they know exactly what they're getting and what they're ordering before the job starts."
Lassiter considers purchase orders, which he didn't always use, essential to timeliness. "Without purchase orders, many items get shoved to the side," he says. "You have the addition framed up and ready to install the exterior covering, but somebody forgot to order the windows. All of a sudden the project is 10 to 40 days behind schedule depending on who the windows are coming from."
Now, Lassiter and his office manager create purchase orders from the materials selection list, review the items, then place all orders in one day.
Just as important as creating a paper trail is organizing it. Bob Clements saw that too many people were involved in the process, so that some tasks were done twice and others forgotten. Now, although he and the other two project managers each write up their own purchase orders, the paperwork has to go through project manager Nicholas Clements for orders to be placed.
Companies that have computerized their construction documents could take a lesson from Plaskoff. He stores all the files in a centralized server so that all employees can access the information they need. However, the files are saved as read-only documents, with only key personnel having the ability to make changes.
Some programs take more time to learn and to use than they save. Systems that match your business needs, however, can save office and field time and money.
Houston Remodeling uses a combination of relatively inexpensive software programs that work together: UDA Construction Office, QuickBooks Contractor, PowerTools ContractWriter, PowerTools SpecWriter, Microsoft Word and Microsoft Excel.
"UDA saves a tremendous amount of time by automatically creating a project schedule from an estimate," Lassiter explains.
The PowerTools programs, he says, provide extremely detailed specifications and task lists for himself and his subcontractors. "Before I started using them, I was forgetting all kinds of stuff," he explains. "Since I started using PowerTools, change orders have gone down almost to nil."
The bigger and more complex the remodel, the longer it takes and the more people, steps and products involved. That's why Plaskoff Construction uses Microsoft Project for scheduling. The software, he says, makes changes easy.
Any program with critical path capability allows the user to establish dependencies between tasks — countertops can't be set until cabinets have been set, for example. Once those are created, changing the date for one task automatically updates all the tasks dependent on it.
No matter what you'd like to think, you can't be the best at everything. Neither can your employees. Take permitting, for example. In large metro areas with overlapping requirements, historic restrictions and lots of bureaucracy, it's not uncommon for contractors to hire plan runners or expeditors to obtain plan approvals and remodeling permits. These individuals typically work for multiple builders and remodelers and may charge by the project or by the hour.
"The plan reviewers meet with these people daily," Lassiter says. "I don't know the reviewers, they don't know me; they don't want to work with me; they'll just send me home to fix it at the office and go back. We pay $150 to get a set of plans run. If I go down there, that's six hours, and I'm billable at $500 a day."
— Additional reporting by Alicia Garceau