Sheet metal & Air Conditioning Contractors’ National Association

HVAC Contractors Forum: The Impact of Productivity

2018011_01166_HVAC_McLin“Productivity is the cornerstone of profitability,” said Michael McLin during the HVAC Contractors Forum, “Productivity Tracking in the HVAC Industry for Design, Manufacturing, and Installation.”

“Labor is one of the largest, and certainly the most variable expense, in the sheet metal industry. However, the financial impact of productivity often goes under-communicated in the industry,” said McLin. “We found that many contractors do not track productivity during design, manufacturing, and installation because they are unfamiliar with the impact that improving productivity can have on their profitability,” he said.

2018011_01165+HVAC audience“The reality is that tracking productivity is part art and part science, so you have to experiment a bit in order to succeed,” he continued. “If a five percent change in productivity yields a 50 percent change in profitability, how important is that to track and communicate?” The forum was also a preview of the white paper on the topic, which McLin is currently finalizing for a New Horizons Foundation project.

Productivity Tracking Helps Keep Score

Four panelists, including Brandon Bratz of the Waldinger Corporation, Corey Chestnut of Climate Engineers, Randy Freitas of Western Allied Mechanical, and Joseph Lansdell of Poynter Sheet Metal Inc., shared their experiences of how tracking productivity had translated into profitability for their companies.

2018011_Lansdell_HVAC Forum_082“Many employees are intimidated by productivity tracking,” Lansdell said, so he made sure his staff understood how it would benefit the firm. “We talked about productivity to people in the company like we talked about sports,” Lansdell said. “When we rolled it out into the field, we asked, ‘How many of you play sports?’ Everybody raised their hands. Then we asked, ‘In how many of those sports do you not keep score?’”

“Just as keeping score during a game lets coaches know how a team is doing, productivity tracking gives managers the information they need to address problems,” he noted. “A contractor might use tracking information to determine actual costs for more accurate pricing or to find a more efficient way to perform certain tasks.”

“This is an enhancer to the production process,” Lansdell added. “In productivity tracking you’ll start reacting to problems quicker and addressing them quicker. Keep it simple and keep it consistent.”

Freitas agreed. “We determined what we were going to track so it was consistent every time.”

Keeping Things Simple

Keeping score does not have to be a complex or expensive process. “Basically, every company’s accounting system already has this ability,” McLin explained. “Contractors can use the technology they already own. All they need to do is automate the timekeeping and add a progress reporting process. Software like Bluebeam or PlanGrid helps streamline the planning and reporting process, enhancing communication.”

Productivity and production tracking continue to evolve as methodologies progress in the industry. “Accept the fact that there might be things that don’t work and that failure is okay,” McLin said. “You pick something to get started on, and you test drive it and see if it works.”

“The first time we tried tracking, it quickly failed,” Lansdell added. “We went in way too deep, way too complex, and the results didn’t make sense. It’s like we counted things four times. We realized we needed to keep things simple.”

“Less is more,” McLin emphasized. “Having a few activities that are relatively simple to track works best. If your system is over-complicated, the guys in the field won’t use it. For example, when you’re installing a main duct, there’s no need to track the installation of the fire damper and the variable air volume box separately. For best results, track everything in-line, not individual components.”

Reminders