New Construction Management:

David Hunt

January 2008

Whether it’s dealing with a slowdown in work or getting up to speed with new technology, managers are faced with a range of challenges, and they are finding a new set of solutions to navigate these waters.

Scott Wilson, president of SW Drywall, Vista, Calif., said technology has been one of his biggest recent challenges—and greatest rewards. Wilson said it took some effort to adjust to downloading plans and submitting bids by e-mail.

But Wilson said he’s now more productive than ever because he’s not constantly driving to pick up plans. These days, he quickly downloads plans via the Internet. If disputes arise over the original scope of work, it is convenient to save an original copy of the plans on a compact disk.

Wilson said he wants to continue to advance in the area of technology by attending training seminars, and by learning about new innovations in hardware and software.

The Software Challenge
Mike Herring, regional vice president for F.L. Crane & Sons, Fulton, Miss., said no single vendor makes a full suite of software with the best estimating, accounting and project management software. Therefore, F.L. Crane has selected "best of breed” software packages from individual vendors. But Crane would also like to integrate data, especially between project management and accounting software. Crane is now using Constructware project management software and a StarBuilders accounting package.

Dan Huff, information technology manager for the Raymond Group, Orange, Calif., said he sympathizes with Herring’s problem, because he is facing the same issue. Huff said it helps to keep an ear to the ground about how other firms are integrating their best of breed software packages.

"I feel for him,” Huff said. "Some software vendors ‘lock down’ their databases, which can make it difficult to share information between applications.”

Huff said fortunately, the estimating software used by his firm, QuickBid, has a usable export capability that allows the company to send estimating data to their accounting package through Microsoft Access or Excel. That saves time because no duplicate entries have to be keyed into their accounting package.

But Huff said the firm must soon decide on the selection of project management software, and that integration will play a role in that decision. The Raymond Group would like to be able to export data from their project management software to their accounting software, but Huff said the functionality of the accounting package will also play a role in the decision. He said integration would allow the firm to better handle change orders, which now have to be keyed once in project management software, and again in the accounting package.

Huff said that as change orders grow, processing them quickly in both pieces of software becomes critical. For his firm, the business processes are in place to enter those change orders quickly.

As firms grow, the chance for error—either in data entry or in forgetting to enter a change order altogether—grows, too. That, Huff said, could significantly impact the profit margin on a job.

"The bigger a firm gets, the more built-in integration they need,” Huff said.

Don Smith, director of technical services for the Association of the Wall and Ceiling Industry, said the association is working on a new effort to consider the issue of technology management for wall and ceiling contractors. AWCI’s new Construction Management Technology Committee will host a session on the issue at the upcoming AWCI Annual Convention in Las Vegas, Nev., this March.

The Economic Challenge
Yvonne Steedley, secretary and treasurer of The Drywall Company of Gwinnett County, Lawrenceville, Ga., said her firm’s biggest concern is finding enough work to keep its employees busy in the current residential construction market.

"We aren’t able to concern ourselves with a lot of other issues,” she said. "We’re so concerned about where the housing industry is going, we don’t have a lot of time for anything else.”

Steedley said her firm hires employees for permanent work, while subcontractors are used on an as-needed basis. It helps that The Drywall Company has no debt, which helps, but getting enough work to keep all of their employees busy has been difficult. Steedley said this year the company has experienced layoffs for the first time since it began in 1983. Steedley said the company has been forced to layoff two workers so far, and that more layoffs may follow.

Steedley said The Drywall Company is extremely selective about whom they work with, and that new business is generated by referrals from trusted general contractors. However, the general contractors the company works for have begun to take on smaller, less profitable projects, and Steedley said her firm has followed suit.

Steedley’s company has adjusted to the residential construction downturn by starting to haul construction scrap, a service they are also providing for general contractors.

"We were paying thousands of dollars each week to have construction scrap hauled away. We are now doing that ourselves,” Steedley said.

Steedley said employees were not pleased, initially, about the scrapping work. "The men weren’t happy about getting into scrapping, but they realized we needed to make an adjustment, and they like their paychecks,” Steedley said.

Steedley also weighed in on the immigration debate, saying she believes employers are faced with a no-win situation. Many firms hire employees with the understanding that they are U.S. citizens, only to find out years later that they were not legal from the beginning. At that point, she said, the firm has invested a great deal of time and money in training the employee.

"The system may be getting more strict, but many businesses don’t have a lot of recourse on this issue. The construction industry has been flooded with Hispanic workers because there aren’t a lot of American workers available.”

The answer, as Steedley sees it, is to create a verifiable system of who may legally work in the United States, and who may not. That, she said, would keep many employers out of this no-win situation.

The Succession Challenge
Ken Navratil, executive vice president of J&B Acoustical, Mansfield, Ohio, said he and Michael Chambers, president of the firm, have been thinking about succession planning for years.

Navratil and Chambers make up the second generation at J&B Acoustical, a family-run business.

The current management team wants to make sure there are no wedges between family members when the succession process is complete by the middle of this year, Navratil said. He also talked about the importance of getting the right people into the right positions.

"We want to make sure that when the process is complete, we have the right people in the right place,” Navratil said.

Navratil said in recent years, the current and incoming generations of managers have talked a lot about responsibilities. He said the three incoming managers have been allowed to take on assignments individually, and as a group.

Navratil and Chambers have spent more and more time away from the office, allowing the next generation to grow.

Navratil said J&B Acoustical has hired two consultants to help the firm with succession planning. He said one consultant tested the personalities of the three incoming managers. The other consultant will verify the personality test by distributing an anonymous questionnaire to the firm’s employees, probing whether the incoming managers are properly suited to a variety of roles. This second consultant will also meet face-to-face with groups of three or four employees to verify the results of the anonymous questionnaire.

"We want to make sure that the right people are in the right spot, and also that the staff recognizes that the right people are in the right spot,” Navratil said. "By the time this is all said and done, we should all know where they belong,” Navratil said.

Meanwhile, Navratil’s son, Adam, now vice president of operations, was leading an effort to implement a more efficient computer information system.

"We looked to the leaders in the industry,” Navratil said, "and have followed what others have done.”

Navratil said the company’s new software and hardware take into account the needs of upper management as well as the needs of other staff members.

J&B needed a more modern computer information system that would allow the firm to back up its accounting data. Navratil said the firm’s new accounting package is Windows-based, and will allow the data to be pulled into Microsoft Excel.

Saving the firm’s estimating data was also a high priority, but only 30 percent of the J&B estimators were previously using a computer to complete the estimating function, so a lot of information had to be rewritten. The new estimating software will allow the estimator, or other staff member, to pull up this usable information.

Navratil said the company selected a software vendor for their reputation in customer service, as well as the firm’s location near their office.

The Change Order Challenge
Harvey Anikstein, secretary of Cord Contracting, Roslyn Heights, N.Y., said his firm believes change orders are the most critical management challenge facing the firm right now.

He estimated that 20 to 30 percent of a contract’s full value involves change orders. Therefore, he said, getting paid in a timely way by the general contractor is crucial.

"You really have to sit on the general contractor in order to get the money,” Anikstein said.

He also said the original schedule from the general contractor needs to be realistic so that a job will run smoothly. When the job runs smoothly, subcontractors won’t have to return several times to complete their work, and the job becomes a lot more profitable, Anikstein said.

However, Anikstein said realistic solutions need to be worked out—proactively—as problems arise with the schedule. "It’s too late when you’re at the end of the job and everyone is trying to finish their work,” he said.

Satisfaction Guaranteed
Antilles Construction, of Kennesaw, Ga., operates as a residential stucco repair and restoration firm in the Atlanta area. An unnamed manager said the firm’s biggest management concern is making doubly sure their homeowner-customers are satisfied with the company’s repair and restoration work. The manager said much of the firm’s business is generated through satisfied homeowners and word-of-mouth referrals.

"We want to find the root of the moisture problem, and go from there,” the manager said.

"A lot of our residential repair business is generated through referrals, so our biggest concern is always making sure we are meeting the demands of our homeowners.”

Antilles Construction administers a moisture warranty program that guarantees the company’s work. The manager said the annual warranty program makes a home more marketable to potential buyers. Beyond referrals, the manager said Antilles markets its stucco repair and restoration services through high end publications in the metropolitan Atlanta area, and through a Web site located on the Internet at www.antillesconstruction.com.

No matter how you define "new construction management,” you will almost always find "old construction problems.” Today, hopefully there are new ways to view and fix those old problems.

About the Author
David Hunt writes for the business community from Hershey, Pa.
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