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June 2023 #15287 Page #27
Four Examples of Process Improvement Considerations
R
ight now, many CMs are waking up to the increased pressures of a slowing home-building market, and all the capital investments they have made are just not going to be enough because all their competition has done the same. Now that the new build season is ramping up to full swing, the ones who will Todd Drummond weather the coming storms know that process improvement will be the key determining factor to remain profitable and is not something that should or can wait until they have time. Regardless of how busy your management team feels, here are four examples of process improvement that your company should carefully consider. Example #1: The endless push of continuously adding more designers, which includes overseas design groups, will have serious negative consequences on market wages and job security for many designers over the coming market storms. Of all the groups within a CM operation, the design group can be the most stubborn regarding process change, even when it benefits them. Instead of adopting new methods for their design process, they would instead add more hours and people, which includes low-wage overseas component designers. One area in most design groups that could make a real positive change to help them reduce the seemly endless hours is the quoting process. Using the design program is not the best use of their time in all cases. Ask yourself these critical questions. 1. What is the quote-to-order ratio within your company? Most average about 30%. 2. Must all of the projects be quoted using the design program? Or, could a high percentage of potential projects be processed using another method? One excellent way to improve the productivity of the design group is to have them not use the design program for every project for job estimation. For instance, in most cases using an estimation program by Advanced Component Solutions is 10x faster than using the design program. Better yet, someone other than the design group could easily use this estimation program. In minutes, an accurate quote that includes the board footage, lumber cost, plate cost, labor cost, gross margins, and many other helpful project details needed for estimation is included. To the managers and Continued next page
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