Year-End Profits - Want More In '04?
Most of us were told as children that if we were good all year, Santa would bring us a present. That may or may not have been true during our childhood, but it certainly applies to your business today.
2003 is almost over and Christmas is coming. You and your employees are hoping for some nice financial tidings which will bring on “how good” your company was all year.
Naturally you can use hindsight and look back at all of the waste, as well as what you “could have” or “should have” done. This won't help with this year's presents, but you might prevent similar waste in 2004. All of that is important, but you need to look at being really good in 2004 to fill up all of those stockings with big dollar bills.
The most effective profit-producing options for the mechanical trades are prefab and pre-assemble. You can begin by looking back at what you installed in 2003 and analyzing how much time and labor cost you could have saved with those options. It's too late now to do anything about it, but it is the perfect time to prepare for a very merry Christmas in 2004.
Prefab AdvantagesWith skilled jobsite labor becoming more and more difficult to find and keep, you would think that every mechanical contractor would prefab and pre-assemble as much as possible on every project. Consider these advantages:
1. Depending on specific jobsite location and conditions, my clients are saving 50 to 70 percent over jobsite fabrication installation labor costs.
2. You can maintain a larger workforce by having available billable work in your shop or prefabbing on site.
3. You can bid and perform much larger projects with the ability to beat critical path schedules.
4. Your on-time reputation enhances your image for negotiated projects in your market area.
5. Assembly-line production provides effective training opportunities for new hires and seasoned employees.
6. Flextime options are unlimited.
7. You can utilize moonlighters to meet schedules.
8. Errors and omissions arise with ample lead time for RFI's and feasible solutions.
9. More of your experienced workforce can get involved with value engineering for short cuts and that “better way.”
10. Quality control is much easier and more effective under assembly-line conditions.
Prefab is not a new innovation in the mechanical industry. Fire sprinkler contractors were prefabbing their installations when I started in this business more than fifty years ago. Naturally the HVAC contractors prefab all of their duct work at the shop, yet for some unknown reason, most of the piping for HVAC is still being done at the jobsite.
In the late '60s and early '70s we started seeing a small percentage of the plumbing contractors prefabbing. This was especially effective on multihousing, motel and hotel projects. Some of the more aggressive contractors prefabbed their installations on large industrial and commercial projects.
The dollar savings are phenomenal and those critical-path deadlines become routine. It is so feasible and economical, you must wonder why every contractor doesn't pursue it!
During all my years as a jobsite superintendent I encouraged on-site prefab for every possible installation. Each job has different conditions that can be analyzed and resolved with unlimited feasible options. In addition to major dollar savings on labor, you can also utilize all of those short pieces that traditionally would have ended up in the dumpster.
No one could argue with the prefab concept. All of the resistance we encountered came from those “measure-and-cut-each-piece-to-fit-in-a-specific-space” mechanics who had been doing it that way for years. Each and every one of them had been on a job where the company shipped the material to them precut, prefabbed or pre-assembled.
“We spent more time and money cutting it apart and redoing it than it would have cost to put it in our old-fashioned way,” they said. How many times have you heard that worn out excuse?
You can easily resolve that resistance by sending one of your jobsite employees into your shop to supervise or assist with the prefabbing, or by sending one of your shop employees out to assist with the installation. We have always known how easy it is to prove something won't work when we are against it. Likewise with proving it will work when you want it to work.
Prefab Made EasyYou need an experienced craftsman with a conceptual mind who can visualize those jobsite conditions from the information given on the blueprints. In addition to the structural components, they must also be able to visualize where all of the other mechanical and electrical installations will occur.
We now have access to CAD isometrics that will draw these schematics on paper and clarify the location of your work, as well as locating all of the other trade installations. You can even buy software that will give you the actual cutting length for each piece of pipe.
My recommendation to all of my clients is to make as much profit on each project as possible along with producing quality workmanship, being on schedule, pleasing your customer and paying bragging wages to your employees. That is not a dream and it is also not impossible. You must value-engineer each job at bid time and before starting actual work. Look at every feasible prefab possibility and involve your conceptual-minded employees in looking for that better way.
With all this in mind, you have many options:
Your question should not be whether you prefab or not, but how much of this project can you prefab? This is a win-win-win situation with no negatives! Do not wait until December of next year to start thinking about 2004's Merry Christmas.
Unfortunately, I can only wish you a Merry Christmas in 2003. But I can guarantee you a happy and profitable New Year with a very, very, Merry Christmas in 2004.