Measure, Measure, Measure!

Words: Damian LangTough competition, tight bids, fewer jobs…and the mason contractors we are competing against are idiots. Did I miss anything?

With the competition bidding work so cheap right now, if you do get some work, there is most likely at a thin margin, so you can’t afford to miss a thing. Therefore, measuring jobsite production cannot be put off until the job ends, the month ends or even the week ends. It needs to be done daily! With the information gained by measuring daily, you know immediately if the project is losing or making money, and you can make changes accordingly.

If you are one of my competitors reading this article, please don’t take it personally when I called contractors “idiots.” Let me tell you a true story about an idiot contractor doing steel erection. This company started five years ago when the economy was good, and in its second and third years, earned around 10 percent net profit on nearly $3 million in sales. The owner knew nothing about setting steel, but did know that he needed measurement systems that required his people to measure daily production.

However, how do you argue with performance resulting in 10 percent net profit? So, he did not enforce that his people measure daily on a perpiece basis and only looked at profits or losses at the end of each job. Last year, this company lost several-hundred-thousand dollars, and I am convinced it was due to an improper measurement system. To use a phrase from my financial advisor, “When the tide goes down (the economy dropped), we find out who is swimming without their clothes on.”

Can you guess who the owner of this company is? It’s me, the guy who wrote the book on incentives. Well, I didn’t shut the company down, but I did make drastic changes, including moving their management back to my headquarters where we meet every morning. And, I get daily progress reports on all projects like we get in our masonry company. By having people measure daily, we know each day if we are making money and on what projects. With this information, I know if a job is in trouble early, and I can address problems immediately.

Measuring is easily done, once the estimate is finished, by breaking down the parts of the job and figuring the costs to install each piece. Our masonry company knows, by watching the cost per piece and the number of pieces installed each day, whether the P&L at month’s end will be in the black. On work that can’t be measured per piece, such as concrete or restoration work, we measure per lineal foot, square foot or even pounds when it comes to laying stone. In the steel business, we now measure per joist or beam set, square foot of decking installed, and etc. I sincerely believe this will turn the steel company back to profits again.

Let’s say you are building a building that will take six months to build. If you know your cost daily, and your people aren’t doing enough production to cover it, you can go to the jobsite and lay off one or two workers each week until the numbers get right. This may sound tough, but may be the only way of surviving. Knowing daily gives you the ability to make changes now. If you set up a system that tells you daily how each of your jobs are going, I can assure you that you will sleep better at night.
About: Featured
 0
Embracing Software: A Game-Changer for Masonry Companies

With challenges such as labor shortages, rising costs, and increasing competition, masonry businesses must find ways to work smarter, not just harder. Fortunately, construction technology and software solutions tailored to field management and operations

By: Erin Laird
About: Featured
Read More
Bring Depth and Character to Any Space with Stone Accents

Transforming spaces with warmth, character and a touch of rustic charm doesn’t always require a complete overhaul, but can be quickly and efficiently achieved with manufactured stone veneer (MSV). Whether your customers are looking to elevate the look of

By: Sarah Lograsso
About: MAP Partner
Read More
2024 Gear of the Year

2024 was a year of innovation and advancement in the masonry industry. From tools, to materials, to technology, companies all across the trade are putting their foot forward to change masonry for the future. This year, we reached out to our MAP partners

About: Featured
Read More
Building More: Accuracy or Efficiency

I am sure by now you have heard the saying that you can have it good, cheap, and fast. The problem is you can only choose two of the three. Good and cheap won’t be fast, cheap and fast won’t be good, and good and fast won’t be cheap. It is a phenomenal an

By: Corey Adams
Read More