High Velocity Contracting
According to Mike Anderson of J.F. Ahern Inc. (Fond du Lac, Wis.), some of their jobs are being awarded even without the design finalized. “The response time continues to shrink while the supply side is not keeping up,” he scolded. “Distributors must understand the velocity of our business. We might not have a bill of materials, just square footage to go by. I realize you can't have everything we need on the shelf, but you must find a way to execute faster.”
Malcolm Sweet, president of St. Louis-based Condaire Inc., said, “The trend is toward more negotiated work on the fly. Everything we do seems to be last-minute. The process is not driven by contractors, but by our customers. We contractors cannot control the actions of owners and consulting engineers.”
The third panelist, Joe Whitney (North Shore Mechanical Contractors, Topfield, Mass.), described his specialty as servicing semiconductor and pharmaceutical clients. “The reality of our business is that everything revolves around avoiding shutdowns, and you have to help us do that. You have to be in the ballpark, but the high purity work we chase is not about price. Most important is you have to be able to ship on a timely basis.”
Another major complaint of the panelists was recurring mistakes. “Not a day goes by when I don't have to spend time working on paperwork issues related to distributor invoices, back orders, material tracking reports and so on,” said Anderson.
Sweet took note of deliveries increasingly coming from more than one warehouse location, and said better documentation is needed on packing slips to account for this.
All three of the contractors expressed dissatisfaction with wholesalers' outside salespeople. “I don't need a salesman calling on me to take me to a ballgame,” said Whitney. “Usually, [I get better results from] someone on the inside who knows what we need and can support us technically.”
Anderson reiterated the same theme. “We haven't found outside salespeople to be very helpful,” he said. “The inside sales staff and branch managers are key for us.”
Tit-For-TatI'm sure many of you reading this echo those sentiments. Yet, there are two sides to every story, and contractors aren't completely helpless -- or blameless -- when it comes to assuring timely and accurate delivery of materials on fast-track projects.
One thorny issue that came up for discussion concerned the practice of large companies putting jobs out for bid but not awarding them until many months later, yet expecting the prices to be the same. “Big corporations budget for capital expenditures one or two years out, and when a budget gets resurrected they won't change,” explained Sweet.
Wholesalers in the audience winced, and drew attention to 2004's skyrocketing PVF prices. Whitney responded, “I understand that you distributors can't eat that, but then what we need is help in value engineering to use less material on the job.”
That's a creative suggestion, but not a cure-all. Some wholesalers have people on their staffs able to come up with value engineering solutions, but it's a stretch to expect distributors or anyone else to carry this ball all the time. Although engineering design talent is highly desired in distributors who cater to industrial markets, the business of distribution is mainly about logistics, not engineering. Most mechanical contractors are in a better position to take charge of this task.
Many of the other issues addressed by the contractors had a tit-for-tat component as well. For instance, some of the panelists addressed the age-old bone of contention about inconvenient return goods policies. The wholesaler's side of the story, voiced by one in the audience, expressed aggravation at contractors who let unused materials lay around the shop for months before getting around to return them.
It so happens that I penned a similar article reviewing the Network '05 panel discussion for last month's edition of Supply House Times magazine, the PHC distribution industry's leading publication, which I also serve as editor. In it, I urged wholesalers to take those contractors' complaints seriously and “figure out a way to solve their problems.”
My message to this audience is, everything isn't the wholesaler's fault. Today's construction industry is hampered by an excess of risk avoidance and finger-pointing. Everyone wants to lay off the most onerous tasks on someone else. Contractors are on the receiving end of far too much of this b.s., and over the years I have spoken up plenty on your behalf about it.
Now, in this season of cheer and fellowship, it's a good time for contractors to break the vicious cycle and ask themselves, “What can I do to make my projects run smoother for myself and everyone else?”