Bruised by the downturn, builders turn to the fundamentals of the construction game.
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3 Think creatively. During the downturn this past year, builders pushed subs hard to keep their prices down. The Dragas Cos. in Virginia Beach, Va., found that one way to keep costs down without continuing to haggle with its suppliers and subs is to push some of the cleanup work back on the subs—they are now accountable for trash cleanup.
Dragas has also consolidated some of the jobs during the interior finish phase. In the past, the builder would have a separate dry-wall team, cleanup person, caulking applicator, and painter. Now, the builder requires its drywall people to do the cleanup work in the bathrooms and around the windows. This saves having to send in a separate cleaning person to prep those areas for caulking. The builder also has the painter caulk the bathroom and windows, which eliminates the need for a separate caulking person. Because the painter typically caulks the interior trim and doors, it just makes sense to add the extra caulking to his responsibilities. Dragas estimates that the new system saves about $70 per house.
4 Listen to your trades. Some of the best ideas for making your construction processes more efficient will come from your subcontractors. For example, for years, Venture Homes in the Atlanta area had been assessing subs based on when they arrived at the jobsite. The subs insisted that a better gauge of their performance would be to measure when the jobs were actually finished.
Venture finally recognized that the subs were right—just because subs showed up on time didn't mean that the jobs were getting completed on time. Management crunched some numbers and found that the company's completed on-time rate was not improving, so it decided to make the switch to measuring subs based on when the job was completed. For the first quarter of 2007, the completed on-time rates ran about 65 percent. By mid-May, the company was up around 96 percent.
While it's true that part of the reason Venture's completed on-time numbers are so high this year is that production is down to about 160 jobs from 240, the subtle shift in how it measures subs is a good example of how the builder used a sub's idea and was able to take advantage of the downturn to improve its processes. Better to tweak your company's processes now, so when business picks up the improvement will be in place and all the important players will have adjusted to the change.
5 Roll out a Web-based trade portal. Builders need to take advantage of the Web as a communications tool. This is as fundamental as good, clean blocking is to offensive linemen. The Web makes it easy to post information. It's no longer necessary to have a back-office person faxing documents or compiling them and sending them out via expensive couriers.
Gemcraft Homes posts the lion's share of its documents online, from production schedules, permits, site plans, and cabinet drawings to purchase orders, variance purchase orders, and payment information for its subcontractors.
Tell your subs that the company has made a decision to conduct as much business as possible online. If they balk, point out where they can find deals on computers, or if possible, offer to pay for a first computer. Many builders also offer half-day or full-day classes that teach the basics of how to use Microsoft Office applications, e-mail, and Web browsers. The trick is to be firm without putting the subs you want to keep on the defensive.
While there's always an old-fashioned sub who refuses to learn new systems, most of your subs will agree to learn computer skills and Web-based applications, especially if you make it clear that they have to modernize if they want to continue doing business with your company. - S. Zurier
