Recently I read an article by David Brown of D.Brown management on how much money a contractor can save on the back end of projects by spending time pre-planning on the front end. His conclusion is that "36% of craft labor hours {are} spent on non installation activities." He further breaks down a 5,000 hour project and assigns time and percentage values spent in the field on such activities as studying plans, purchasing material, site movement, receiving and storage, clean up and other non-installation activities. His numbers conclude that a small company with 15 field employees can add $75,000 to the bottom line by just decreasing non-installation activities by a few minutes a day.

“If I had two hours to chop down a tree I'd spend the first hour sharpening the ax" - Abraham Lincoln

Mr. Brown makes a lot of sense. When I was involved in distribution it never ceased to amaze me that some contractors obsessed over pennies on the material we sold them, yet never grasped the greater sums they could / should be saving by utilizing technology such as estimating software. While getting favorable pricing IS important, material only accounts for about one third of a contractor's cost. His operation makes up the rest.  Mr. Brown asks the question, "How much would the bottom-line on your projects change if you could improve labor by 5%"?

Problems and construction are synonymous. But Mr. Brown states that fixing them BEFORE the fact adds about 10% to the cost of the job. Doing so during the job adds 30% and afterwards 80% - Ouch! Its all about Pre-Planning.

Here's more from David Brown: 1) "Pre-planning is about moving as many of the field layout, coordination and planning issues to the front of the project as possible." 2) "Pre-planning is about taking activity out of the field and into a controlled environment that is specifically designed for efficient planning." 3) "Pre-planning is about taking advantage of tools that allow more accurate layout and communications of ideas." 4) "Pre-planning is about finding and resolving problems before you start working to minimize disruptions to progress and re-work." And finally, 5) "Pre-planning is about locating value-engineering and pre-fabrication opportunities well before construction starts."

Talk to you local distributor. Often he can lend you logistical help that will focus on reducing your COST, not just your price. You may have more control of gaining profit from your current work than you think. And, you don't have to beat up the local supplier to do it. Instead, look inward. That's where the bulk of your true cost resides. 

To Reply to this article BFloyd@ElectricSmarts.com