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Midwest HVAC News
Is your company dialed-in
to a market recovery?
Without Planning Expert Says You Are
Likely to Miss as Business Comes Back
Good, solid mid-tier mechanical contractors may actually get hurt
when the market improves.
“We’ve heard about the coming uptick in 2013 from economists. It
seems engineers are busy and contractors are telling me they’ve seen
a dramatic increase in jobs for bid recently,” John Koontz told
Mechanical Contractors Association Chicago (MCA Chicago) member
companies.
“I’m concerned however; contractors need to be mindful that capture
rates are likely to be much lower than in past market upturns. There
will be the temptation to take work cheap just to have work,” says
Koontz. He is the Mechanical Contractors Association of America
National Director for Project Management and Supervisory Education.
Will Your Profits Grow?
Planning is the key for a good, mid-tier size company to effectively
grow with a changing market. “This size company had better get
dialed-in now to become incredibly efficient before the market comes
back,” says Koontz. “You have got to have good control measures in
place and a team that manages well. Otherwise you may see increased
volume, but no significant percentage increase in profits.
“We’ve got some new conditions not present in the last market
upturn. Baby Boomers are retiring in unprecedented numbers, which is
affecting field supervision and estimating functions at almost every
company I have dealt with. Also, contractors are telling me that
they can’t hire experienced BIM and CAD modeling experts fast enough
to meet demands for off-site fabrication,” says Koontz. Making the
most of the team you have in place and assimilating new recruits is
a critical part of the secret sauce for operation efficiencies, he
says.
A Checklist for the Turning Market
“Great planners find their costs are much lower, they can build more
and be paid more quickly. If your percentage of completes are not
coming up quickly, you can’t bill as much and you will find your
profit margins are lower,” says Koontz. He offers these tips, which
he frequently shares in his teaching and consulting assignments:
Every project, every time, gets a turnover meeting. “This is
where the people who acquired the work transfer all of their
knowledge to the people most responsible for getting the work done,”
said Koontz. “Even the smallest projects benefit from a quick and
informal meeting. As simple as this advice may seem, probably 80
percent of mechanical contractors don’t use turnover meetings.”
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Involve foremen very early in
the process. “Great companies involve foremen at the bidding
stage on very large projects,” said Koontz. “An active foreman
brings a keen perspective to the process and often sees
something the office staff does not. And since he or she will
most likely be assigned to the project, why not take advantage
of their knowledge?”
Involve foremen in the project planning stage. “Good
companies involve foremen once the office staff has the plans in
place. Great companies take it a step further,” said Koontz. “It
seems like common sense doesn’t it? This is the role that has
the most impact on the profit or loss of a project. An
additional benefit is that the foreman will be better treated
onsite by workers, because he or she truly understands the
project from the start.”
The project manager and the foreman participate in servant
leadership. “You have to break down the ‘us and them’
barriers. To any project there are two leaders: office and
field. A great company understands these roles are
interdependent and puts people in place that can build a
partnership based on mutual respect, active communications, and
the ability to anticipate the other role’s needs,” said Koontz.
“Projects become problematic when these leaders don’t operate as
a single unit. You miss out on opportunities to find greater
efficiencies and often experience more surprises. Sure, sooner
or later the work gets done. The real question is what just
happened to your profitability?”
Together, the project manager and foreman tweak prior to
taking it to the field. “Great companies require the project
manager and the foreman to work together on the project
schedule. Then they work together on the cost control system.
It’s important the info is fine-tuned prior to moving to the
field,” said Koontz.
Koontz regularly teaches at the MCA Chicago Construction
Education Institute®, the premier training facility in
Chicagoland for educating mechanical contractors. It leads the
green contracting movement by offering courses in commercial
building retro-fit and re-commissioning, as well as LEED® and
sustainable design. More than 75 courses are available in
classroom and online formats. Ranges of topics include use of
information technologies, safety and risk control, estimating,
project management, HVAC service, as well as operations,
supervisory and sales management. More information is available
at www.mca.org
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About MCA Chicago:
Mechanical Contractors Association Chicago promotes the highest
caliber of worker at all levels of the union mechanical
contracting industry by advancing safety and education. MCA
Chicago represents 60 member companies who work with the highly
qualified pipefitters and service technicians of Pipefitters
Local Union 597. Together, they install and service heating and
air conditioning; and install piping wherever it's needed – from
power generation, to oil refineries, to pharmaceuticals, and
food processing plants. For more information, visit www.mca.org.
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