The new 2021 build season is upon us, and everyone seems to be excited about the 2021 opportunities that seem apparent with the robust build economy. Many companies had their most profitable year in 2020, yet others struggled, stating that commodity pricing and covid were their major negative factors. Here are four critical areas that your company should review to make 2021 the best year possible.
1. Lumber pricing volatility is not looking any better this year. To say many were caught flat-footed with the skyrocketing lumber market pricing last year is an understatement. Many allowed themselves to be locked into long-term quote pricing that gave them no room for sudden pricing increases. Well, that lesson about lumber volatility was a hard lesson for many that had severe negative consequences for their net profits. At the same time, others had the most profitable year in their company’s history. One of the apparent differences between those who excelled and those who did not: the quoted pricing’s long-term liability was not a huge part of the more profitable companies’ pending orders. Another difference: the profitable companies had someone who could see the upward trends, give warnings, and help them prepare. That type of service can save most companies hundreds of thousands of dollars. If your company was surprised and did not see what was happening, one would think most companies would be willing to seek such expert advisement outside their company if needed. Every company should have a well-thought-out strategic plan to properly manage their lumber purchasing to mitigate this pricing volatility as much as possible. We can help you.
2. A company cannot grow and thrive without good leaders. Leadership affects every aspect of a company’s productivity, quality, and culture. But if we are honest with ourselves, leadership development has been traditionally deplorable within our industry. Regardless of any particular area of the construction industry, it is primarily up to the individual to find the needed leadership skills outside their current employer. Typical within a company, an employee’s development and career path is a laborer in a department, lead person of a small group, then supervisor of the larger group, and finally a possible overall leadership role. Throughout the career path, the employee is thrown into each role without any genuine preparation or formal training. At each stage, they are evaluated as being, “we think he/she will be able to do this job.” Some of the multi-location companies tout their leadership programs, but often it’s more about corporate policies and conformity, not about actual coaching and leadership excellence. Many falsely believe leadership excellence is innate. Most supervisors and managers can be taught to be outstanding supervisors, and some can be taught to be excellent leaders. There are excellent resources to help companies develop a healthy training program to grow their average managers into extraordinary leaders. But as mentioned before, one needs to look outside the company for help with these very specialized and highly developed educational programs that align with its culture and needs. We can help you.
3. Too many human resource departments (or the lack of one) are being overwhelmed by the high demands. In most aspects of the building industry, there are more open positions for good managers than well-qualified candidates who are a good fit for each company’s unique culture. Companies often find themselves desperately looking for anyone to fill an open position because their workload is almost overwhelming. It is not enough to find a warm body with the given department’s technical skills, which often leads to more significant harm. If a company is going to grow, it must find truly excellent individuals to manage and lead their given area of responsibility while also thriving within the company’s culture. Excellent management skills and culture fit is not something easily accomplished when hiring outside the company. Frank discussions about the company’s needs, culture fit, and expectations are not so easily done within most HR departments. If your company is growing and has open upper and mid-level positions, perhaps it is time to look outside your company for these specialized, trusted services. We can help you.
4. The board foot per roof truss assembly man-hour formula decision-making is costing some companies millions. Labor markets are tight, and many companies are desperate to reduce the labor in the roof truss manufacturing any way they can. A company’s labor practices, manufacturing processes, and the demand for their product may lead many to make some truly poor decision-making based on misleading BF/Man-Hour numbers. There are three problems with this decision-making using BF/Man-Hour for roof truss assembly. For one, it can needlessly cost millions in investment in the wrong equipment, which increases debt loads and financial risks. Two is that the labor savings is a red-herring promise; when looking at the big picture, the accounting numbers will show no real labor savings. And finally, overall revenue will decrease along with net profits because their manufacturing division is being measured using the wrong numbers for productivity. There is a better way to measure roof truss assembly, get real promised gains for both labor savings and output, and also make a better-informed investment for the right equipment. However, it may take listening to other people’s ideas rather than the opinions of those they currently rely on. Perhaps if someone is so vocal in raising this red flag about this issue and staking his reputation on such statements, one may feel it is worth investigating before making such a costly mistake. We can help you.
Change that usually takes months and years can be accomplished in weeks and months with TDC’s assistance. The team of TDC is your best source for learning about proven and practical lean manufacturing best practices combined with industrial engineering principles to keep your company at the leading edge of competitiveness. All areas are addressed, not just the manufacturing. Please don’t take my word about TDC’s services, though. Read the public testimonials many current and past clients with decades of expertise and experience have been willing to give: https://todd-drummond.com/testimonials/.
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