Reduce Cycle Time, Increase Profits With Simple Tech Solutions
Simple technology solutions that streamline the building process, such as e-mailing information to subcontractors and suppliers, are cost-effective, easy-to-manage and can improve efficiency and increase profits ― if everyone is on board.
Companies do not have to deploy massive new programs to improve the quality of their bids, simplify their billing process, reduce cycle time and otherwise improve business processes, say experts in home building, management and information technology (IT). Rather, they can start simple when automating and streamlining their communications with vendors, and build from there.
Simple Ways to Automate
“The key to where to start is to really look inward,” says Bill Allen, president of William A. Allen Consulting. “Look at things that waste people’s time and cause duplication. Look at the areas that you want to make faster and better.”
E-mailing or faxing information to subs frees vendors up to spend more time bidding projects or working on the job site, rather than wasting time in the office, Allen points out.
“Several of my builder clients have actually purchased fax machines for their vendors,” Allen says.
A Web-based purchase order pickup and delivery system may be de rigueur for those who insist upon keeping up with state-of-the-art technology, but Rick Corry, CEO of BuildLinks, Inc., says simply having purchase orders automatically faxed to assigned subcontractors upon job release is an efficient and, perhaps, more manageable solution for small-volume builders.
Brad Ervans, the chief operating officer at Cypress Homes in Southwest Florida, set up e-mail accounts for his company’s trade contractors. It was a manageable investment for his company, which closed on 42 homes in 2005, that helped increase gross profits and decrease stress — many times over, he says.
Cyprus Homes eventually invested $320,000 in new technology — including hardware, software, consulting fees, installation and implementation — over a two-year period to automate processes and improve operations, Ervans says.
“A $320,000 IT investment scares people when they hear it,” but the more important point is that “you need to decide on where you want your company to be in five years and then build an IT foundation that can support those efforts,” Ervans says.
“You can’t automate all at once,” he adds. “You have to do it one step at a time.”
Prep Vendors Before Taking the Plunge
Don’t be surprised that some subcontractors may balk at automation, says Ervans. “You will get resistance, not only from your subs, but from your superintendents and field managers. They will view it as more work.”
However, once they see how much faster they get paid, subs will respond positively to the “new” technology, he adds. Cypress is able to pays its vendors within four to five days after job completion.
To prepare subs and vendors for the new processes, Corry and Allen advise builders to follow these four steps:
- Notify subcontractors that automation is happening.
- Test technology solutions in-house first.
- Conduct a pilot with specific subcontractors.
- Plan for exceptions.
Ervans says that, in addition to paying vendors quickly, Cypress has cut overall cycle time by more than half now that the company’s automated systems are in place.
“Time of construction is what we’re trying to reduce. You need to know what your time of construction is and set a goal for where you want it to be,” Ervans says. “Some builders have sold themselves out of business because they couldn’t keep up.”
Cypress Homes, he says, offers customers a guarantee that they will close on their home six months after a contract is signed.
Attend Interactive Technology Forums at the Builders’ Show
To learn more about how information technology solutions can improve business processes, sign up for the following interactive builder technology forums at the 2007 International Builders’ Show in Orlando, Fla. in February.
- Using the Internet in a Changing Market will offer an overview of Web-based software that can improve profitability in today’s market — from marketing to selections.
- Future Technology Today: Learning from Other Industries will explore real-world examples of technology that can be adapted from other types of businesses to the building industry.
- Paperless Solutions That Meet the Needs of Builders will feature a panel of builders whose thinking about business processes was changed with a document management solution.
- Wireless Communications: Keep Up and Benefit from the Changes will explain how wireless tools can integrate back office and field.
To add these sessions to My Show Planner, go online to www.buildersshow.com.
NAHB Kit Gives Builders Back-to-Basics Tips in Cooling Market
With the current cooling of the nation’s housing market expected to persist into the middle of next year, NAHB has developed a comprehensive online toolkit geared to providing association members with information that will help them prosper in today’s changing business environment.
To access the “Back to Basics” toolkit, you must be an NAHB member and have a login to www.nahb.org. To create a login, go to www.nahb.org/login or click on the log-in button on the main menu bar.
For assistance, call the NAHB Member Service Center at 800-368-5242.
NAHB Has Nearly 300 Resources to Help You Run Your Business More Profitably
Go to NAHB's Business Management Tools Web pages (available to members only) for instant access to nearly 300 timesaving, moneymaking and cost-cutting business resources to help you run your business more profitably. Get guidance on accounting and financial management, business strategy, computers and information technology, customer service, human resources and more.
Resources are added weekly, so bookmark www.nahb.org/biztools to go directly to these vital business management resources.
Local and state home builders associations can link directly to www.nahb.org/biztools from their Web site and give their members instant access to these resources. It will make your HBA's Web site the place to go for the information and guidance that members need to succeed.
Subscribe to NAHB’s Business of Building e/Source
NAHB’s Business of Building e/Source is your monthly electronic guide to the hot issues and emerging trends in home building business management. You’ll find practical advice, tricks of the trade and sound business guidance — all delivered monthly, straight to your desktop, in a quick and easy-to-read format. Business of Building e/Source is available free to NAHB members and their employees.
To subscribe, click here on the Members Only side of the NAHB Web site.
‘Scheduling for Home Builders with Microsoft® Project’ Available at BuilderBooks.com
“Scheduling for Home Builders with Microsoft® Project,” available through BuilderBooks.com, helps builders navigate the scheduling process.
Written as an easy step-by-step guide, this book demonstrates the methods for keeping projects on schedule and budget while coordinating resources, staff and materials.
To view or purchase this publication online, click here, or call 800-223-2665.