Tag Archives: planning

Nonresidential Construction Backlog Drops, Signaling Advantages for Small Construction Firms

Construction Backlog Indicator (CBI) declined 3.2 percent from the previous quarter from 8.1 months to 7.8 months, but is still up 10.9 percent compared to the fourth quarter of 2010.

CBI is a forward-looking economic indicator that measures the amount of nonresidential construction work under contract to be completed in the future. Associated Builders and Contractors’ Chief Economist Anirban Basu elaborated:

Overall, the latest CBI numbers indicate a degree of stalling in the recovery of the nation’s nonresidential construction industry, likely due to a combination of the soft patch that developed in the broader economy early last year, a number of seasonal factors and the winding down of federal stimulus projects. But the good news is that given the recent acceleration in economic and employment growth, CBI is positioned to rebound more forcefully during the quarters ahead.

In addition, the most recent data reflect the ongoing expansion in privately funded construction activity as opposed to the contraction of publicly funded construction. The nation’s smaller construction firms are gaining an advantage from this shift, in contrast to the decreased construction activity among the larger firms that had benefitted from earlier federal stimulus projects and military base realignment-related construction.

Regional Highlights

  • Construction backlog expanded in the Northeast from the third quarter to the fourth quarter, but declined in the South and West, and was essentially unchanged in the Middle States.
  • Construction backlog is higher in every region of the nation compared to one year ago.
  • Companies in the South, some of which are located in high-growth states such as Louisiana, Oklahoma and Texas, reported the lengthiest backlog at 8.9 months, up 14.7 percent from the fourth quarter of 2010.

Analysis by Basu:

The disparity between regional construction activity is on the rise. One year ago, the difference in backlog between the South region, with the lengthiest backlog, and the West region, with the shortest backlog, was 1.98 months. During the fourth quarter of 2011, this gap rose to 2.81 months, with the South reporting a backlog of 8.92 months and the West at 6.11 months.

The South appears to be the region most positively impacted by rebounding nonresidential construction, largely due to its central importance to the nation’s energy industry. The West continues to deal with many issues, including the impact of weak residential real estate markets and stressed state fiscal conditions, both of which impact the vitality of broader regional economies.

For regional trend data, go here.

Utilitarian Municipal Structures Can Be Functional, Sturdy, Earth-Friendly AND Pretty

Sonoma County transit shelter manufactured by Tolar Manufacturing and designed with the help of Autodesk Product Design Suite (Photo: Business Wire)
Sonoma County transit shelter manufactured by Tolar Manufacturing and designed with the help of Autodesk Product Design Suite (Photo: Business Wire)

Contractors who are building out and improving the country’s metropolitan landscapes don’t have to settle for off-the-shelf transit shelters, street furniture and advertising kiosks. That’s because companies that design and manufacture those fixtures are increasingly turning out custom products that fit the local environment and climate.

One example is Tolar Manufacturing which uses Autodesk Gold Partner KETIV Technologies to design and make more than 500 shelter types within the company’s four main product lines, each designed and engineered to be long-lasting, attractive and environmentally friendly. This includes complying with a wide range of building code requirements across North America and community design requirements from economical transit shelters to high volume bus rapid transit facilities. Tolar client expectations for purpose- driven design range from hurricane-resistant bus shelters for Florida communities to solar-powered transit displays for agencies in California.

On a typical project, Tolar begins by creating 3D models of the proposed shelter using Inventor software. To further communicate design intent to customers, Tolar can create a near-photorealistic image of the model in Showcase software, and then superimpose it over an actual streetscape from the customer’s town, enabling customers to see exactly what Tolar’s product will look like when installed in the community.

Next, the Inventor manufacturing models are used to fabricate the multiple components that make up the shelter. These models provide clear, concise and comprehensive communications, resulting in fewer errors on the shop floor.

Additionally, Tolar uses Vault software to centrally store and manage its digital data, making it easier for the company to access and reuse drawings of specific parts for multiple projects rather than having to start each time from scratch — significantly reducing project turnaround time. Tolar also uses Inventor Publisher software to create installation instructions for customers.

Autodesk named Tolar its Inventor of the Month for January 2012 for how it used Autodesk software to create custom products matching the needs of municipalities throughout North America.

BuilderMT Reports Growth and New Innovations

Logan Homes (a Coastal Carolina builder) announced that by using BuilderMT workflow solutions it was able to achieve 10 – 12 percent, per-home margins across 150 starts averaging $300,000 per sale, according to a press release from BuilderMT.

Apparently Logan isn’t the only builder choosing BuilderMT since the company announced it “recently added builders responsible for another 3,000 starts in the U.S. and Canada.” The company claims more than 850 BuilderMT systems sold to date and more than 400 BuilderMT systems still in active operation. Still, it continues to introduce innovations and upgrades, recently offering its successful Trade Portal, a Web-enabled Bid Management solution, a Mobile Scheduling module, and now – new to IBS 2012 – a Superintendent Portal, Multi-Family Scheduling and BIM capabilities that tie CAD house plans directly to sales, estimating and purchasing functions within BuilderMT’s applications.

In-a-nutshell, BuilderMT provides highly-customizable workflow and building-process-management software that works in tandem with leading accounting systems and other wireless and jobsite productivity tools, such as CRM and warranty management.

How One AEC Company Decided to Tame PDFs

MMM Group Limited, a Canadian program management, planning, engineering and geomatics firm selected Bluebeam PDF Revu as its enterprise-wide PDF solution to replace Adobe® Acrobat®. The company will deploy Revu CAD, Revu Standard and Revu eXtreme™ to meet the needs of nearly 2,000 users. According to Mark Bryant, the company’s CIO, the move was based on the need for a solution that met the unique needs of architecture, engineering and construction, and that had a high level of flexibility.

MMM Group selected Revu for its intuitive interface and industry-targeted features that support digital workflows in the architecture, engineering and construction industry. The range of features in Revu Standard, CAD and eXtreme meet the needs of both our technical and administrative users, enabling us to standardize on one solution across our organization.

According to Bluebeam, PDF Revu lets users create, markup and edit PDF drawings and other design documents using customizable, industry-standard markups and measurements. Revu also provides advanced features for automatically comparing drawings, tracking markups, calculating materials costs and collaborating in real time with Bluebeam Studio. Together, these features enable project teams to create efficient, paperless processes for workflows including design reviews, bids, estimates, submittals and punch lists. Sasha Reed, the company’s director of account services, sums it up this way.

With its industry-standard features, Bluebeam PDF Revu is a must-have solution for electronically communicating and collaborating on building and infrastructure projects. We’re thrilled that MMM Group has joined the group of design, engineering and construction firms who are making the switch to Bluebeam for more effective electronic workflows.

About Bluebeam Software, Inc. – Bluebeam Software invents, develops, and commercializes PDF software intelligently designed to meet the needs of design, engineering and business professionals. Bluebeam produces high-quality, easy-to-use products that allow professionals to improve communication and collaboration immediately with virtually no learning curve. For more information visit Bluebeam Software at www.bluebeam.com.

Fuel Saving Strategies

History so far has shown that if there is anything you an depend upon it is that costs of things will always go up. Lately it seems fuel is leading the charge and of course that affects almost everything since fuel is so deeply imbedded in the economics of supply and demand.

Normally prices of fuel inch up over a period of time and so everyone has a chance to adjust and gradually get used to the necessary changes, not the least of which is the increase in costs of goods and in doing business. The rapid increases are causing many in construction to re-think how they do business.

According to various news reports here are some of the ways contractors are adjusting for the higher costs of both gasoline and diesel.

  • Eating the additional costs on jobs already under contract and passing them on in all new contracts;
  • For contractors with service fleets many are adding fuel surcharges shown on the invoices while others are increasing their service and/or hourly rates;
  • Requiring carpooling for superintendents and lead carpenters traveling to job sites;
  • Paying closer attention to regular vehicle and equipment maintenance;
  • Eliminating idling;
  • Replacing gasoline vehicles with diesel vehicles;
  • Converting diesel vehicles to vegetable oil vehicles;
  • Marketing closer to the home office;
  • Eliminating free estimates that are further away than a specific distance from the home office;
  • Combining material runs from a number of job sites.

What’s missing here? Examining why people are driving and if the trips are even necessary, where they are driving to and if the destinations are really part of the job and identifying other ways to accomplish things that don’t require driving.

There Is No Time Left To Put Off That Strategic Plan

There’s nothing more frustrating than trying to plan in a hurry. Worse yet trying to plan when you are already behind is even more frustrating. In order to put short term plans into action you need to have long-term plans in place. That’s the strategic plan.

So now is the time to tackle some of those long-term strategies that actually end up driving the short term tactical decisions. You have to be realistic about these things because they touch on issues and relationships that you might not be prone to viewing objectively.

Is it a good time to diversify? Do you need to be more growth oriented in one area of the business? Are there some inherent weaknesses to the business that you should be strengthening? Are all the bases covered in terms of continuity? Do you need a partner or new business manager? Is this the year you go public? Is it time to look for exit strategies and if so how can you make the business more attractive for sale or transfer?

As you go through this process you are going to have to look closely at your partners and suppliers. Are there weaknesses in their performances? Are you still getting the value you need from the relationships? Are there processes that should be reviewed to make sure communication lines are open and clear? Are there consolidation opportunities with these players? Is it time to find some new people to collaborate with?

Ultimately your goal is to end up with a vision of what you want your business to look like at the beginning of next year. Of course this assumes that you’ve already reviewed the longer range goals of where you want to be in five years and beyond.

If you have partners and others who need to be involved in this process there are many ways to get people focused on the task. Short of scheduling a series of meetings, you might suggest a retreat where the necessary people and you gather for a weekend to map out the strategies. Sure you could include some relaxation but you better make sure you have a clearly-defined agenda and some clearly defined goals lest the whole affair deteriorate into a junket. That might be fun but it won’t get the job done.

People are notoriously adept at avoiding planning. That’s why so many people, and so many companies, look around at the end of the year and wonder why their long term goals are still just as far off as they were at the beginning of the year.

If you are really going to build it like you want it, you have to plan it.

Plan For Your Succession Before The New Year

One often overlooked area of managing a construction enterprise is the one of succession planning. This exercise identifies the people or person who keeps things rolling if main players are sidelined or die? But there’s much more to this. Ideally the person would be one that is actively involved in the business on a daily basis and would then have access to all the types of information necessary to keep operations moving. One area that’s easy to miss here is making sure the successor has the necessary computer and database and other passwords needed to get to the information.

Small companies may have to rely on a lawyer, family member or worker. If these people aren’t schooled in the company operations and locations of business information their effectiveness will be greatly compromised.

At this time of year, as you begin to turn the corner to the New Year it’s a good time to give succession planning some thought and action. Here is my short list of things you can do to minimize disruption when key people are missing.

  • All of your administrative functions need to have a backup plan. Look at accounting, payroll, and job functions and put together a Plan B in case key players in those functions are out.
  • Consider outsourcing to minimize the number of functions you have to backup.
  • Get people cross-trained so there is an overlap in knowledge about how things are done.
  • Have key people build lists of contacts with phone numbers so answers to questions like, “Who do I call to get the copier repaired?” can be easily found.
  • Identify those things that can bring your business to a standstill and have a Plan B.

There is a lot more to this but just beginning to think about it is the most important first step.

Learn to Recognize a Good Schedule

We were on schedule. Things were humming along nicely and the work was coming in at quality. There hadn’t been any accidents. I had a few minutes every afternoon to analyze the schedule and make fine tuning adjustments based upon new information from subs and their availability. On top of that rosy picture, I wasn’t waking up at 3 a.m. to make notes in my Palm Pilot (I know, I know, there is newer technology, but I’m used to this).

Then, the owners said they wanted to accelerate the schedule. It had something to do with investors. I fired up MS Project, loaded the current building schedule and started adjusting things. About 20 minutes into this mind-numbing exercise everything came to a screeching halt when I came across the window schedule. The manufacturer was 400 miles away and already running behind. It didn’t matter if I could get everything else moved up since it would all come to a standstill once we needed windows. I got on the phone and after a few hours actually received a call back. No, they were maxed out and couldn’t deliver earlier. The discussion entered the realm of additional money, but still no go.

Just for kicks I finished out the exercise in adjusting the schedule only to find that even if the window issue could be solved I could only cut 5 days off the estimated completion given the current workforce. The owners were looking for 15 days and didn’t want to spend more money to hire additional shifts or otherwise fund increased production.

In a poll that is referred to in an article at Projects@Work the third most frequent reason cited for project failure is “unrealistic schedule.” The sad thing is that owners and others often operate under the mistaken perception that accelerating the schedule can save money. What often isn’t considered is that even if you can pull it off there are other factors that can end up costing additional money that wouldn’t have under the old schedule.

Suppose as part of the change the drywallers have to add a second shift and under labor law or agreements that shift gets a premium beyond regular pay. Five days saved just turned into two-days behind from a dollar perspective. It is always a good exercise to see how much you can tweek the schedule. When it is running according to plan you get the thrill of feeling like you have just improved on a fine Swiss watch. But you also have to learn to be content when the schedule is about as perfect as it can get…especially in an imperfect world.