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Don’t Forget! You Saw it in the
April 2022 #14273 Page #78
Adverti$$er
From the Road... Building Transformative Supply Chain Management Relationships By Thomas McAnally
am, or was, an off-site construction manufacturing turnaround guy. I believe in Lean and 6-Sigma in concept, but I also know that implementing them within a company is hard. Not allowing people to slip back into their old ways is even harder. Many programs go by the wayside once management gets distracted by other priorities.
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To anyone who has grappled with this issue, I have to recommend a really great read: “How Much is the Milk.” It grabbed my attention and I couldn’t put it down, especially because it spoke to my heart as a builder. “How Much is the Milk,” or “The Milk” as author Ken Pinto calls it, gives you the tools you need to implement and maintain bottom-line-changing programs that not only address the builder’s bottom line but can also help you build bridges with your suppliers and subcontractors that provide real advantages to everyone involved. Telling his story as a Supply Chain Manager for several large Production Builders, Ken shares his transformative secrets to pile on profits while building a supply chain team from builder, to contractor, to sub-contractor, and even with distributors and manufacturers. I found myself cheering him on as I read about how he “found” new ideas to lower costs across the board, thereby lowering the cost of homes to help more people participate in the home buying process. In his role as the Change Maker, he unearths causes that cost everyone more money, waste that most people had accepted as standard, and how to turn adversarial relationships that cost everyone money into collaborative efforts, transforming individual strengths into one team effort. One of the first topics he explored was how relying on three all-inclusive or “lump sum” bids, the standard for construction for many years, was a flawed process. His take was completely different and he clearly and concisely demonstrated why the three bid and picking the lowest bidder was at best a win-lose, and toss a coin to know which side of the equation you were on. Many times, the low-bid subcontractor missed items, accidentally or on purpose, only to add them back in a change order that was priced at a much higher margin. Ken explained how that by changing the bidding structure to a unit-priced format, separating labor and materials, he was able to look at costs, volumes, and labor rates. His goal was not to beat down prices as much as find waste and errors that cost both parties money. His goal was to help each segment of the “Team” identify waste and errors to improve everyone’s understanding about cost. I have actually counted the number of fasteners to install a typical window in our stock classrooms or office trailers, so reading how Ken physically measured all of the drywall in a model to compare against unit price bids was a deja vu moment for me. In his case, he discussed (note I didn’t say confronted) PHONE: 800-289-5627
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