The quest for efficiency from our supply chains is important to any business.  In an industry like ours, where our supply chain consists not only of raw materials but of finished goods and labor, our suppliers and subs present as much of a public face of our organizations as our own employees do.  “Squeezing” them for every last dime just doesn’t cut it.  Threatening to fire them unless they reduce their fees isn’t a magic solution, either.  Instead of fighting a losing battle with our suppliers, lets partner with them and get their feedback on where they think efficiencies may be found.  It may sound like an irrational statement, but oftentimes, getting more efficiency out of our supply chain has nothing to do with the suppliers and subs themselves, but how we and our staff manage these relationships and our projects.

Many of us have been there before.  The client dawdles in making selections on unspecified items (Terrible inefficiencies – thus wasted dollars – exist in allowances.  Eliminate them whenever and wherever possible).  They choose an ornate Italian stone that must be steamed over on the next ship, which may take six weeks.   In the interim, the quarry union went on strike.  Another two week delay occurs.  We can’t finish our custom bath tile.  Without tile, we can’t trim out the plumbing.  Without trimmed out plumbing, we can’t complete the project and final bill.  The plumber wants his payment, the tile setter is getting out of whack with his schedule.  The client wants the crew out of their home.  Anger ensues and a great project can easily turn to mush.  Sure, we will ultimately get the project done and the final bill will be sent and paid, but we are floating the project with our company’s money until we get it wrapped up and bills in and accounted for.  I don’t know about you, but I would much rather use client funds to float the project, not my company’s.  Cash flow is paramount.

While it is easy to blame the client and the supplier for this mess, we aren’t paid to lay the blame at someone else’s feet.  Clients don’t pay us to be finger pointers. Believe it or not, construction is not a production business.  It is a customer service business with a production component.  Our suppliers and subs, like it or not, are part and parcel of the public face of our organizations.  Choose them wisely, and not based solely on price.  Look at them as a critical component of your business, not the enemy.  While the example above is not the fault of any supplier, but the choice and delay in selections, it does not matter one bit to a client.  Let’s work with our suppliers and subs at the onset of a project.  Work hard up front to find areas that will cause problems down the road.  Selections are always a project delayer and game changer.  Your subs should be able to compile a list of items that are often found on punchlists or tend to be longer lead items, like the example above.

In this environment we are all trying to do the same or more with less.  This includes your subs.  Browbeating them now will not produce the intended result.  It will only drive a good sub away the moment they have enough backlog.  The only way this efficiency equation works is if we get more efficient in managing our projects, staff and supply chain.  Don’t expect everyone else to have all the answers, but, rather, work with them and gain their particular knowledge.  Small efficiencies can add up to big dollars.  We can’t manage a successful company unless we manage our supply chain as efficiently as possible.

We belong to an era that has automated nearly every process available to some extent.  Hanging door blanks in a jamb is a lost art in the field and will solicit confused looks from many of our carpenters.  Much of what we do gets pushed off to specialists that do one thing very well.  The jack of all trades is often seen as antiquated or too expensive. This axiom is often also true for our field leadership.  Those that fully understand the technical aspects of the trades are often not taught the intricacies of management and vice versa. In a tough market we normally can’t pad our estimates to include missed items.  We have to get more efficient, and reducing or eliminating end of project completion items is a great place to start.

I think part of our training program should include fundamental skill tasks as well as management tasks.  I don’t think it is necessary to teach a superintendent exactly how to cope/miter crown moulding, but it is important that he/she understands what it should look like at the end of the project.  If we can eliminate or, at the very least, take a big chunk out of the punchlist at the end of the project through improved quality control, we have earned much more than the cost of training in time and production costs.

I have often suggested that a list of Quality control items that often find their ways onto punchlists get put together.  At a monthly meeting, take one or two of the items and explain how this issue made it to the end of the project before being corrected and when/how could it have spotted earlier.  Some punchlist items are difficult to spot until final trades are completed.  Others can and should be caught at the time the subcontractor is on site performing their portion of the project when it can be most efficiently corrected.

We are all getting pushed for tighter margins and tighter times to completion.  Right now, the client holds the upper hand.  Eliminating time and expense from completion items is a great way to increase profit without increasing bids and/or proposed profit margins.  If we think of each item on the punchlist as costing a minimum of $500-$1000 to correct, it easily adds up to a significant dent in our budgets.