2008 outlook is rosy,
but how much will you capture?

by Clair D. Urbain

As reported in our annual outlook story, it appears that 2008 should shape up to be a pretty good year.

Our readers and leading construction economists concur that commercial construction will continue to perk along at a good pace, while residential construction will take all of next year to regain its footing for a more solid 2009.

However, price increases in key supplies, such as stainless steel, PVC construction supplies, and copper and brass plumbing supplies, face worldwide demand and continue in tight supply. That means higher prices which could squeeze profit from your projects.

More than ever, the pace of construction and the constraints of supply mean that construction firms must tighten up processes to keep crews busy and the money machine running. Increasing efficiencies at all levels will be the key to making and keeping money.

Where can contractors look to reduce costs? Literally everywhere. There is a huge amount of activity on any construction project. Where there is activity, there is waste which costs money and time, two precious commodities.

On the front end, better collaboration between the owner, designer, engineer and construction contractor can reduce wasted effort with last minute expensive change orders.

During the building process, look for ways to reduce waiting times. With some materials in short supply, that means planning ahead and sticking to schedules.

Are there ways you can reduce in-field assembly steps? Set up deliveries on a just-in-time basis? Develop kanban systems that provide a signal to another part of the organization that it’s time to reorder or restock tools or materials, or signal another crew that the job is ready for their portion of the work?

You can also set up work and storage areas so work, tools and supplies are orderly and easy to understand and execute. Enforcing pick-up rules for a clean work area will also pay in higher productivity.

When it comes to your acquisition processes, look at ways you may be able to streamline your supply chain. Can you standardize on a particular supply? Choose a certain model or brand of tool? Establish a stocking program so a distributor handles replenishment in return for all your business instead of having an employee handle it?

Is there any way to reduce the amount of paper and (mis-) communication it takes to accomplish a task?

It all comes down to wringing the most value out of every activity in your operation. Do that and you can avoid the thorns that come with busy times.

Published in the September/October 2007 issue of Contractor Tools and Supplies magazine.

back to top