Here at Remodelers Advantage we set aside the month of June to focus on an issue that plagues most service-based businesses, but can be a critical metric in looking at the success of a remodeling firm. Last year we named June “Slippage Awareness Month” and this year you will see content submissions from our consulting, sales and production experts here at R/A. Enjoy!
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“Slippage” is the percentage of gross profit on a remodeling project that is lost between how the job is budgeted and how the job is completed.
As an industry, we work to continually find ways to get jobs done on-time, on-budget and at the level of profitability we seek, and yet for many, despite this effort, this remains an elusive goal.
As Paul Simon had us all singing in the late 70s, “You know the nearer your destination, the more you’re slip slidin’ away!”
LEAN is a method for continuous improvement that reviews processes from end-to-end, identifies WASTE in the process and engages those who are actually doing the work to find ways to eliminate that WASTE. This is done by separating all steps in a process into value-added and non-value-added in the eyes of the customer.
The result is a process that is easier, better, faster and cheaper. Customer satisfaction goes up. Employee frustration goes down. And, the cost of the job goes down, which therefore means less slippage.
The WASTES in LEAN that are continuously sought for elimination can be remembered with the acronym D-O-W-N-T-I-M-E. This stands for:
- Defects
- Overproduction
- Waiting
- Not Using Human Talent
- Transportation
- Inventory
- Motion
- Extra-Processing
LEAN consists of principles, practices and tools designed to give any company the ability to continuously improve their processes with strategies for workplace organization, workflow and culture.
So, let’s look at the job-site. When we have challenges scheduling trade, inspections or the delivery of materials, we create WAITING. When we make several extra trips to the lumber yard we create TRANSPORTATION.
When we miscommunicate in the “sales-to-production” hand-off, we can easily create DEFECTS. And when don’t properly capture the paperwork and pricing on change orders, we can create EXTRA PROCESSING.
Summary
Now, imagine having a company culture, workplace organization and workflow to continually look at your processes and eliminate waste. Many small changes in a process can have great impact on the overall process and that’s how LEAN can help you make sure that it’s not your gross profit margin that’s “slip, slidin’ away”!
[notification style=”success” font_size=”12px” closeable=”false”] If you would like to learn more about how LEAN Process Improvement can help your remodeling business, visit https://leanremodeling.com and take a look at the LEAN Masterclass we have coming up on July 10-11, here in Baltimore. [/notification]