Landis: Increasing Your Throughput From Sale to Construction

We recently realized that it was taking longer for our company to get through the “design-estimating” phase of work. We crunched some numbers and discovered a process that had previously taken three-to-four months in 2020 had now expanded to seven-to-eight months.

We also determined there was no correlation between time and job size. We came up with the following areas to work on to speed up throughput.

• More meetings. Over time we realized we had added meetings that were required for many stakeholders. And unless a given meeting was completed, a project could not move forward. We needed to review the number of meetings with an eye toward decreasing or merging meetings. There is was also a question of latency in the time it took between the time a meeting was booked, and the time a designer and project manager were assigned to a team. We needed to understand the reason for this latency.
• Delays in pricing. Pricing can slow the sales and design process down by weeks. Lawyers and doctors give no certainty when it comes to price, schedule and outcome. You need to build pricing flexibility into every stage of your process except for the final price. Always give clients a range that is subject to more detail and final decisions. Initial pricing may be based on a quick estimate by using a WAG (wild-ass guess) tool, historical cost per square foot, and other historical cost data from similar projects. These tools should be used at every stage with a generous overage allowance of 20 percent. Once drawings are done, and a complete handoff package has been assembled, a final detailed estimate should be put forth. This will save estimating many hours and hopefully bring the project in at the same cost as more detailed and lengthy preliminary estimates.
• Delays in permitting process. Depending on the states and towns you work in, it’s always advisable to have your permit in hand before your final estimate is completed, and the project is sold into construction. It can take months to secure a permit, and your local permit office will add scopes of work which will, in turn, cost more to build. Ideally this permitting information can make its way into the final estimate; otherwise, you are starting a job with a change order. Since permitting is usually estimated as part of the cost of construction, you will need your clients’ approval to start the permitting process early and make them aware that if they decide not to move forward with the project, they will still have incurred the permitting costs.
• Undefined design schedules. Do you start out with a design schedule that is shared with clients to get their buy-in? If you do, make sure it’s lean and as compressed as your team and the client will allow. Value-engineer your design process with agreed-on times from your team and/or vendors for as-builts after sale and an agreed-on time for drawings to be completed. Allow only a certain percentage of finishes to be allowances. Get you design team to agree to no more than two finish meetings. All finishes—exterior and interior—should be presented and discussed by the second meeting. Are both your salespeople and designers trained on how to manage indecisive clients?
• Delayed value-engineering. Over the last two years, with high inflation and supply chain issues, be sure you build in value-engineering at the beginning as opposed to at the end of the project. Try to always present a project as close to the last agreed-on budget. Serious value-engineering on large and complicated projects can add weeks if not months to a project. If you know you are coming in seriously overbudget, have the conversation with the clients as early as possible, so they can decide to spend more or send you back to the drawing board to excise agreed-on scopes of work. I’ve often seen anxious salespeople and designers spend countless hours in value-engineering when the client accepted the new price and wanted to keep all the agreed-on scopes of work.
• Workload imbalances. Ensure that your workload is balanced across all your design teams, given their individual abilities. Look for bottlenecks and overloaded designers. When hiring, are experienced designers faster than less experienced designers? How much time are experienced designers taking to help, onboard and/or check and correct the work product submitted by less experienced associates? Was throughput less of an issue before remote work and COVID-19? Is remote work slowing down your process? Given the delta in productivity, efficiency and competency between A and B players, let alone C players, do you have A players on your team, and are you getting B players to be A players?

Of course, with increased throughput comes lower overhead, increased job profitability and greater client satisfaction. If employees know that clients are motivated and decisive, they become more engaged and motivated as well. All clients want their job sooner. Explain to them the importance of schedule and making decisions. Make them part of the team. QR

Christopher K. Landis, AIA, owns Landis Construction in Washington, D.C. He brings 30 years of remodeling design, construction and management experience to this series of columns for the magazine. You can reach him at chris@landisconstruction.com.