Installation Productivity: The Fine Line Between Profit and Loss
There are three key components to becoming a successful hardwood flooring dealer/contractor. Creating a satisfactory bottom line requires shrewd purchasing, a realistic margin or "markup," and a level of installation productivity that exerts minimal, if any, impact on the net profit. Poor productivity that continues to go unchecked during the fiscal year of operation can darken what would otherwise be a bright year of sales growth.
In our industry, some dealers prefer to subcontract the installation labor portion of the their business. Obviously, a fixed cost has merit, but there are also tradeoffs for those who opt for this type of operation. For instance, will the dealer lose control of installation quality? Is the subcontractor working for multiple dealers and will he only work for the highest bidder? Can schedules be made and kept for your customers?
A strong working relationship between the dealer and a reliable subcontractor can overcome the vast majority of these obstacles. However, an independent subcontractor won't eliminate problems associated with efficient installation production.
Productivity is a potential problem for both the dealer/contractor and the consumer. When promises are made and a date of completion is contractually documented, consumers rightfully expect that those terms will be honored. They don't care whether the salesperson miscalculated the production or that a particular installer has an unacceptable rate of productivity. You're the dealer, so you're responsible.
And if you think productivity can affect a retail replacement installation, imagine the repercussions of a competitive bid to a builder who has a tight deadline. New home construction requires the scheduling of multiple trade-related subcontractors. I suppose all the trades can be thought of as spokes in one giant wheel. With proper scheduling and productivity, the wheel will continue to roll for jobs to come. When any spoke becomes loose or wavers in harmony with the other trades, the wheel begins to wobble and momentum is lost. Sadly, the account will probably be lost as well.
Builder cooperation and preparation can expedite the hardwood installation process. Precise scheduling by the construction superintendent can eliminate confrontations between specialty tradesman at the job site. A hardwood flooring installer must not let these scheduling efforts go in vain. The installer must arrive at the job site with a positive attitude toward the task at hand, and deliver a quality installation in a suitable and reasonable time frame.
There are two ways to describe the arrival of the installer at the job site. They are commonly known as "comes" and "goes." Honest, hard working individuals "come" to work. They deliver a full day's work for a full day's pay. The installer who merely "goes" to work is habitually late, departs early and complains about what's wrong and why the job won't be completed on schedule, and is never shy about blaming someone else in the organization. When exposed to the installer who "goes" to work, all of your installers on the job are likely to develop morale problems. Appropriate action must be taken.
Boosted installation productivity requires everyone's participation. A successful salesperson will need to be competitive on product pricing and in his estimate of the labor hours required to install the floor. The salesperson must have a keen eye for details. Job site conditions that need adjustment, floor removal and/or subfloor preparation, and furniture removal and resetting can be very time consuming. Measurements scaled on a print need to be copied and delivered to the job site along with the hardwood flooring and appropriate transitional trims. A kitchen, for instance, can be very confining and require multiple cuts in the product to properly install. Tight areas -- such as hallways, closets and landings -- also slow the installation production rate.
The person in charge of scheduling should always assign enough installers to complete the work in an expeditious fashion. For instance, a large home with multiple rooms that require installation likely needs more than one installer on the job. The areas are separated and non-adjoining which allows a second installer to be productive throughout the entire day.
If the scheduler monitors the job as it progresses, he may find it more productive to withdraw the additional installer and send him out to start work on another job. That said, moving installers on and off the job site ultimately is non-productive and costly. Introducing new installers once the installation commences can be damaging as well. Everyone has a tendency to reinvent the wheel when they arrive on a job that's already in progress. Job site visits by the salesperson or a field superintendent can keep the job moving as well.
The positive approach to increasing productivity calls for motivating both the sales and service components of the equation. The following six-point outline just might help you produce desirable results and simultaneously save your originally estimated bottom line. Try to see that each of the following are part of your installation effort.
1. Competitive, and yet competent, estimates from the salesperson with inclusive details provided for the installation.
2. Pre-installation deliveries to eliminate the waiting (downtime) of the installer. Develop a comprehensive checklist for the delivery to avoid costly shortages and return trips. Deliveries should be double checked, specifically by the driver and the installer.
3. Provide a complete set of installation tools designed to increase productivity. Although not required, pneumatic tools should increase productivity by decreasing installer fatigue and preventing chronic ailments associated with manual nailing machines. An aging installer is a perfect candidate for air tools.
4. Operate with a receptive attitude toward new products that have been developed to increase productivity.
5. Provide the installer with your estimate of how many labor hours the installation requires. In conjunction with management monitoring the installation, the installer will have the opportunity to take control of his own destiny.
6. Provide incentives for both sales and installation after a designated period of time. Congratulate your people and show your appreciation for a job well done.
The dealer/contractor is probably the most viable segment of our industry. Wood or Wood Knot acknowledges your efforts. You truly are the hardcore members at large and, with just a little help, you will get to stay there.