For residential GC’s like us, email is a wonderful tool that will only grow in use. One of the challenges has been finding time to reply to emails in the field using the tiny keyboard on a Blackberry, especially in the middle of winter when wearing gloves! Hopefully Jott (or something similar) will alleviate this particular issue.

So far, we’ve been impressed with Jott’s ability to accurately transcribe messages. We’ll continue testing and report our results in the next few weeks.

The Toyota Production System is far too comprehensive to have an in-depth discussion about it here. However, over the next few posts we’ll look at the four basic rules that form the backbone of TPS, and how they can be adopted for use in the residential construction industry, and how we’ve incorporated these concepts here at Ruvin Bros. Today’s post will look at Rule 1 of 4.

Rule 1. All work shall be highly specified as to content, sequence, timing, and outcome.

Let’s break this down a bit. First, we’ll define work as an assembly, like all of the kitchen cabinets for a home. For our purposes, content will mean the physical characteristics of the work, like the species of wood the cabinets will be made from or what kind of hinges will be used. Sequence can be compared to the phase of construction, like Finish Carpentry. Timing can be defined as duration – how long will it take to install the cabinets? Finally, outcome is very important: are the cabinets “complete” when they’re screwed to the wall? Stained? Countertops installed? As we’ll see, defining each element is crucial to the overall success of the work.

Frequently, home builders are pretty good at specifying the content of the work. Using our kitchen cabinet example, we might say that the cabinets are to be made of Cherry, have raised-panel doors with 110 deg. hinges, 5-piece drawer fronts with maple dovetailed boxes, etc. Remember: as the General Contractor we’re responsible to define and execute all details, all details have some impact on pricing, and all unknown details will eventually cause delays.

Test: Can you specifically define each component of a recent cabinet installation you’ve done?

Again, be specific: “standard” drawer tracks are seldom standard, and “paint-grade” could literally be anything that accepts paint. The more detailed we are, the less “unforeseens” we’ll have during construction, and we’ll also have a better handle on pricing.

Sequence is a concept that most builders and remodelors do an OK job on. We all know not to have the cabinets delivered minutes after the excavator is finished, and we sure don’t want to be installing cabinets after move-in. However, sequence also requires an understanding of predecessors (things that need to happen before the task), including non-site items like design approval, field measurement, etc. Have you ever spent hours in a design meeting, obtained a decision, and then had to re-visit that decision because of a pre-existing field condition? If so, it’s because we didn’t fully understand sequence.

Test: Does your project schedule include a method for identifying ALL predecessors for a task?

At Ruvin Bros., we developed a project schedule that has a “Verify Information Required” predecessor list for each major phase of construction. The trick is, we already tracked on-site predecessors – the difference is that these predecessors are almost all “off-site”: decisions that need to be made, drawings and approvals required, etc.

Timing is mostly self-explanatory, but cannot be overlooked. We need to verify that the cabinets will show up at the same time as our carpenter; any difference will result in either lost job time or an unhappy carpenter! Although this subject alone warrants lots of further discussion, spending additional time verifying that labor and materials will arrive simultaneously is crucial to maintaining a schedule.

Finally, outcome is often the most-overlooked aspect. When is the cabinet installation complete? While the definition may vary somewhat with each project, defining when a task is complete is an important psychological step.  Raise your hand if you’ve ever been part of a conversation like this:

Builder: So, did you finish up the kitchen cabinets? 

Carpenter: Yep, all done. I’ll send you an invoice tomorrow.

Builder: Great! So all of the moldings are installed?

Carpenter: Well, most of them.

Builder: And the knobs are all installed?

Carpenter: We might be missing one or two, but …

Builder: And you’ve checked to make sure the doors aren’t rubbing, and all the drawers operate smoothly?

Carpenter: I guess I’ll be seeing you tomorrow.

Looks like we had a little disagreement as to the outcome, huh? While there are many ways to specify the outcome, try adding a list of “close-out” tasks to your schedule and/or specifications, and be blunt: “Finish Carpentry shall be considered complete when …”

Test: How do you know when _____________ is complete? (pick one trade as an example)

Next up: now that our work is really specified, we’ll look at communication between the GC, subs, and customer.

Not surprisingly, the headline is “Property value growth slows in southeast Wisconsin”, so I guess we can’t miss an opportunity to take good news and make it less good. Of course value growth is going to slow! Did anyone around here seriously expect the gains of 12%+ in the last couple of years to keep on forever?

Right now, I’m sure a lot of investors would be quite pleased with 6% appreciation in their portfolios. Just goes to show that housing, in addition to being functional, is still a great long-term investment.

According to the Office of Federal Housing Enterprise Oversight (OFHEO), the U.S. has averaged about 7.18% appreciation in the last ten years.  Between 1990 – 2000, the average was only 3.32%.

In short? We’re doing just fine, thank you.

• Financial controls (bidding, estimating, invoice approvals)
• Scope-of-work control (assigning tasks to individual trades)
• Relationship management (for both the customer and subcontractors)
• Schedule management (need I explain more?)

Let’s focus on schedule management. While any of the above can be a “make-or-break” for a project, scheduling is one area where software can really help. After all, a construction schedule should be a (somewhat) linear process, sequential, and rule-based, which are all right up software’s alley. So why don’t more GC’s really utilize scheduling software?

A quick search of Google for “construction scheduling software” gives 2 million results, so it seems choice is not an issue. For custom builders, the big issue is commonly flexibility. On many custom projects, words like “linear” and ”sequential” are frequently replaced with “changed” and “unexpected”. I know of some builders who sometimes spend hours every week just updating their schedules. With 12-hour workdays, a constantly-ringing cell phone, and seemingly endless interruptions, who can spare the hours needed to keep an updated schedule? But who can afford not to?

A few tips that we’ve used at Ruvin Bros to help keep schedules manageable, whatever system you use:

1. Keep an appropriate level of task detail. I have seen some schedule templates that are downright funny, like breaking down Insulation into twelve sub-tasks. Unless you’ve got a project that has some really funky insulation details, two or three sub-tasks (like Insulate Walls, Blow-in Attic, and Spray Foam) will probably suffice. Many builders can probably just use Insulation on its own.
2. Be realistic about time detail. If you’re on a eight-month job, tracking tasks by the hour is definitely overkill. However, on a two-week project, each hour counts. Some of the projects we work on can span multiple years; for those jobs tracking time by week is just as effective as by day, and can be updated in as little as 15 minutes a week.
3. Focus on the critical path. A lot of times, good schedules get derailed by tasks that aren’t on the critical path (major tasks that cannot be done out-of-sequence). For example, exterior painting typically doesn’t hold up other trades, and if it gets done a little sooner or a little later the overall schedule usually isn’t impacted. Contrast that with pouring the foundation; if that happens later, then every other task gets pushed back. So, spend your time on those critical path items, and don’t sweat the stuff that’s not.
4. Think of the future. Maybe this one is the most important. All too often, schedules are updated retroactively (“let’s see what we got done last week!”). This defeats the purpose of a schedule, which is too look ahead to make sure the correct resources are notified and in place. Our guideline at Ruvin Bros is look ahead at least 20%: If you’re on a 10-month project, be looking out at least 2 months in advance.

Remember: the goal is to set-up trades to be successful, not to scramble to put out fires!

What are your tricks for a good schedule that’s easy to update? What software or system do you use? How do you communicate the schedule to a customer? Let us know your thoughts – this is an area that we’ll be sure to discuss again.

There’s no shortage of bad news about the U.S. housing industry in general. The good news for us is that metro Milwaukee is in pretty good shape. We never participated in the huge price increases that other regions saw, and now we’re not participating in the huge declines that some areas are seeing. And while price appreciation is not as high as it’s been in the past, prices are holding steady.

For builders and remodelors, this will likely mean that we’ll still be pretty busy throughout the year. While some areas will see a decline in new construction, that decline was almost inevitable given the remarkable run of the last few years.

For customers, this is still a great time to build or remodel. Lumber prices are down almost 10%, according to Random Lengths. Many subcontractors, while still busy, have some excess capacity that they’re willing to negotiate price on. And while oil costs will impact the cost of many building materials, the reduced nationwide demand for these materials should hold prices fairly steady.

Combine these factors with very attractive mortgage rates, and the metro Milwaukee area should have a decent year.

What are your thoughts?