November 2005
  
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Costs Down, Margins Up

Al De Wachter, President, ICS
 (Independent Control Specialists Inc) 
www.ics-controls.com

Doing things once, and doing them right, is a necessary first step in eliminating waste.

In our role as provider of productivity software to contractors, we have been able to witness some interesting techniques that work well, and some that cause problems.

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The purpose of this article is to share with you a few of the field-tested techniques that help control your costs and maximize the efficiency of your labor force. It focuses on sales, design and submittal tasks that a high-tech contractor typically gets involved in.

One overriding aspect of these techniques is that they address time savings. It comes as no surprise to experienced contractors that time is one of the most valuable of commodities. Doing things once, and doing them right, is a necessary first step in eliminating waste.

Project Structure:

Does your company break down estimates and designs into manageable segments?

If so, then not only will the estimate or design be easier to evaluate for management, but employees will be able to perform fast and powerful “what if” scenarios for alternate bids and last minute customer requests. Also, properly segmented designs and estimates readily support the use of standards. A professional software tool can make a major difference in the practical breakouts of estimates that also jumpstart the design process.

Project managers will benefit from logically segmented project structures by working with information that they can import directly into project management software, saving additional project cost and time.

Designers can benefit by integrating this type of estimated project with their in-house design tools, further adding to savings and work quality. Data is entered just once, not multiple times.

Implement Standards:

Contractors are increasingly being tasked to do more in less time. Very often sales people are working on multiple bids in a pressure filled atmosphere where it can be very easy to overlook items or information in an estimate. To reduce costly estimating errors, your company should define pre-determined standards and templates that employees can use with confidence from project to project. In addition to saving a significant amount of time, factors such as labor rates, travel expenses, job difficulty, taxes and overhead will not be overlooked or misapplied again.

With company standards, your sales force will gain from the experience of past projects to optimize efficiencies going forward. Similarly, your designers can use the same standards to prepare their drawings and submittal packages, saving time as well as increasing professionalism.

Leverage your experience:

No project can afford the cost of re-inventing the company’s hard-earned knowledge. Also, nobody knows your business and your customers like you do. Your business systems should take advantage of your years of experience and inherit benefits from the successful projects you’ve already completed.

Establish a set of standards that both sales and operations can agree on, based on collective experience, and harness the lessons of the past. For instance, libraries of standard drawings and associated equipment lists leverage your experience and minimize re-invention.

Time is a precious commodity. Implementing a system to take advantage of work you’ve already completed eliminates redundancy and increases the accuracy and quality of future projects.

Control Solutions, Inc Be Consistent:

Look for ways to handle repeatable tasks in a proven and predictable way. Consistency implies and suggests professionalism and quality. It sends a signal to customers that you have your processes worked out, and that your work is a culmination of knowledge, not a worrisome experiment.

The Power of a Single Database:

Technology is constantly changing and improving the world that we live and work in, and much of the useful information is stored in database technology. Product- and knowledge databases form the basis of most of today’s productivity tools, however the adage “garbage in, garbage out” is very applicable.

For contractors, databases can be more than a simple list of product numbers. They should contain an abundance of information to help a contractor to run his business more efficiently. Some examples are pricing, technical attributes, labor factors, capacities and other features.

However, the creation, management and maintenance of databases can be a time-consuming, error-prone and therefore costly activity. Whenever possible, consolidating your company’s information into one common database is highly recommended to limit exposure to risk and redundancy. Also, getting pre-populated databases to ‘load’ your software tools is a good approach.

Checks and Balances:

By comparing the designed project to the estimated project before the money is spent, errors and omissions can be caught before committing material and labor. Your system should support the ability to quickly compare and analyze this information to divulge action items before they become liabilities.

Eliminate Repetition:

Look for opportunities within your business to eliminate unnecessary repetition. Some typical problem areas can be: project turnover meetings, change orders, material ordering and as-built adjustments. Perhaps these critical components can be streamlined and/or automated?

Benefit from the experience:

Keep track of which type of job you historically tend to win or lose. Which competitors appear stronger or weaker in certain types of work? Booking and marketing information can provide insight into the challenges and opportunities that exist in your marketplace. Inject this knowledge back into your business system, so your people learn from the past.


About the Author

Al De Wachter has been active in the Building Automation industry for over 36 years. He has held senior positions with leading companies in the field and is currently the President of Independent Control Specialists Inc. Al has directed the development of advanced productivity software for Building Automation Contractors since 1990. www.ics-controls.com

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