Instead of giving your estimators vague feedback like, “We
lost money on this cost code,” you can now say, “This is how
many 2x4s we actually put up in an hour and this is how
much it costs.”
DO THE MATH TO IMPROVE PRODUCTION
If you’ve created an accurate production tracking model and
automated the continual gathering and analysis of field production data, then congratulations! Your company’s field
teams now have a new scoreboard that tells them whether
they are winning or losing on a daily basis. The next step is
to help them refine their game to continually set new personal production bests.
For example, when a construction crew needs to perform work
on a busy street, the foreman might question whether it would
be more productive/cost effective to do the work on a weekday
vs. a Saturday. The response should be: Do the math.
The math will show if it’s cheaper to work straight time on a
weekday or premium time on a weekend. While a seasoned
superintendent might have a gut feeling about which option is
cheaper, the correct tool for making decisions isn’t your gut –
it’s the math.
Teach your company’s field staff to sketch out the costs for different scenarios so they can see which option is less expensive. When your field crews are consistently doing the math
and making minor adjustments that save a few hundred dollars here and there, the savings really add up.
PROFITABILITY THROUGH INNOVATION
Production tracking isn’t a set-it-and-forget-it process. It’s an
evolutionary tool that must be continually tweaked for accuracy. Although the physical work happens in the field, CFMs
play a vital role by providing continuous real-time feedback
and advocating for ongoing improvement.
Instead of letting your team shoot a basket and find out a week
(or month) later whether or not it went through the hoop, you
now have the ability to generate such immediate feedback as,
“You didn’t get it through the hoop because you were this high,
low, left, or right” or “Two points! Now, what do you need to
shoot accurately from the three-point line?”
When we ask field crews what they need to be more productive, we are continually amazed at how simple the requests
are that impact productivity (e.g., better port-a-potty locations, more ladders, and proper material quantities). Make
one of your company’s mantras, “What do you need to do your
job better?” And then, make it happen!
Finally, foster an environment where experimentation is
encouraged and failures are seen as stepping stones to success. Instead of focusing on the short-term impact of trying
new things that don’t work, focus on the rewards that are
achieved when your team develops and masters a new shooting technique for consistently making three-pointers.
For most construction companies, production tracking requires a fairly wholesale change in operations. But, when your
accounting, field, and estimating teams are finally speaking the
same production-centric language, “We worked really hard
today” becomes “We beat our production rate today by $2.15
per foot!” This is where the profit happens. BP
DAVID BROWN is the Founder and President of D. Brown
Management, a consulting and management firm in Lodi,
CA, that provides a comprehensive scope of general
management solutions to contractors nationwide, including
strategy, planning, operations, field productivity, workflow,
financial management, technology, and marketing.
Beginning his construction career in 1988 as an electrician, David worked as a foreman, superintendent, and
PM before moving to executive management.
A previous author for CFMA Building Profits, David is also
a frequent speaker on such topics as integrating accounting
and operations, production tracking, change order management, construction technology, and cash flow.
D. Brown Management regularly presents to industry groups
including CFMA, Electric West, the Engineering & Utility
Contractors Association (EUCA), and the Western Electrical
Contractors Association (WECA).
Don’t miss the summary of
Production Tracking Methods
on page 44.