lncreosed Profits Greoter Volume ond wirh CATAVERAS CETUIENIS

because lumber is billed at a contract price per house, instead of by individual pieces.

Dave Wight speaks for thousands of lumber dealers when he says: "Many builders are notoriously poor accountants. They are continually charging off costs to the wrong operation." As an example: rvhen a builder decides to set up his own precutting operation, he frequently is unable to determine just how much labor he will need in his yard, how much he u'ill have to invest in handling equipment, whether he needs an extra man to control inventory, what his trucking costs will run, u'hat he should pay for insurance, and even horv much time his field superintendent will have to allot for cutting-yard liaison.

Comments Wight: "Do builders add these costs to their lumber? Of course not! A11 of these costs originate with lumber, yet they are added to administration ancl overhead. Conversely, we are geared to accounting, as rvell as cutting."

Precutting Now One-th.ird of Total Volume

In the past three years that O'Neil1 Lumber Company has been actively precutting lumber, the yard has supplied nearly 3,000 precut units to jobs in Stockton, Antioch, Pittsburg, Elk Grove, Tara Hills (Pinole), Santa Clara, San Jose, the East Bay arrd all along tl.re San Francisco Penirreula. The precut division, lvhich now accounts for over one-third of O'Neill Lumber's total volurle, is now geared to cut from six to eight units of different design per day. A unit includes everything except siding, roof deck and sub floor.

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In addition, O'Neill carries a large stock of precut studs (cut at the mill) in lengths varying an eighth of an inch. This stud inventory insures a ready stock for any job specification.

It is also interesting to note that O'Neill uses no Economy Grade in its precut operation. "We discovered long ago that our waste loss and cost o{ extra lumber handling far offsets what lve save on the initial purchase of Economy," Wight states.

A good case of growing pains has resulted from the success of the O'Neill precut operation. In addition to the five-acre San Carlos yard, Wight opened another yard in Redwood City during July 1955. The Redrvood City yard occupies 2f acres and is also set up for precutting. In all, the O'Neill operation carries an average inventory of 3,000,000 {eet of lumber between the trvo locations, and Wight indicates that he may soon expand his San Carlos yard again.

Once more focusing his attention or.r the small builder, this time the one-business builder, Wight is currently working up cutting lists for several stock plans, each rvith alternate elevations. These cutting lists rvill enable him to supply precut materials for one unit at a time-thereby giving the one-house builder the full advantage of productionJine efficiency and placing him in a competitive position to big builders and even prefabricators.

"When you put a small builder in a competitive position to prefabricators, you give him a distinct edge," Wight notes, "because he can add individuality and extra service to the job, while the prefab operator can not.

"I would like to make this one point clear though,"