International Door & Operator Industry

NOV-DEC 2015

Garage door industry magazine for garage door dealers, garage door manufacturers, garage door distributors, garage door installers, loading docks, garage door operators and openers, gates, and tools for the door industry.

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productivity as measured by sales per installer or serviceman or installation or service crew. To calculate this, we need a labor rate for each sales category. The labor rates used below are hypothetical. Also, for the sake of simplicity, labor burden (FICA, SUTA, FUTA, health insurance, 401 k expense and vacation and holiday costs is arbitrarily set at 38% above the hourly labor rate. It is acknowledged that many larger dealers pay residential installers on a piece rate, but we are assuming our overall hourly rate is reasonable for the industry. Likewise, labor rates vary from region to region and differ between rural and urban areas. Chart #2 below shows labor rates used for each type of sale: Chart #2 Using the labor as a percentage from Chart #1 and using the fully burdened labor rate from Chart #2 above, industry acceptable productivity goals can be determined, displayed as sales per installer or serviceman (or crews). Simply divide the fully burdened labor rate by the desired percentage of labor per type of sale. Note that in Chart #2 it is assumed both the commercial installations and the commercial service work is done by a two-man crew. A lead tech and a helper are paired as a crew. See Chart #3 below: Chart #3 Pushing numbers around can be interesting and also point a dealer towards a more proftable strategy. However, least a smaller dealer look at the sales per installer or service tech or by commercial installation or service crew in disbelief (Chart #3), it is important to point out situations that can adversely affect productivity. 60 International Door & Operator Industry™ 1. The smaller the garage door dealer, the harder it is to meet the productivity dollars per sale type as shown in Chart #3. This is because of increased windshield time for dealers with fewer vehicles than larger dealers. Larger dealers with more installation or service vehicles can schedule with less travel time than can smaller dealers trying to service a large area. 2. Scheduling is a key component to increasing productivity. Schedulers must understand management's productivity goals. A scheduler must constantly look at both units to be installed per day, dollars to be billed per installer or serviceman (or crew) per day and be aware of individual skills of each feld tech to assure productivity goals are met. 3. Better installation or service vehicles and superb tools and equipment will increase productivity, both because of increased effciency and because of enhanced feld tech morale. 4. Increasing productivity is a team effort. A scheduler cannot schedule work he does not have. Therefore, sales personnel must be part of the team. Also, unreported feld conditions are the responsibility of the sales person handling the job. Field technicians arriving at a job with bad jambs, a pipe across the header preventing spring attachment or providing enough headroom, or a failure to order high lift resulting in long hang iron drops is not the fault of the installer, but rather a failure by the sales person who sold the job. 5. More training given to installers and service techs will increase productivity. Consider asking key vendors to provide annual training sessions on complex or new products. Well-trained and well-informed feld personnel will increase productivity. 6. Finally, safety always pays. When safety is embraced as a core concern of management, and adhered to by feld techs, productivity increases. John E. Zoller and David H. Bowen comprise Zoller Consulting, Inc. of Wooster, Ohio. Zoller Consulting provides consultation of managerial effectiveness and fnancial performance of construction related businesses. They also offer customized seminars and training sessions. In addition, Zoller Consulting provides acquisition management, including fnding buyers or sellers, locating funding sources, transaction structuring, and negotiating and organizing the transition to new ownership. Contact Zoller Consulting, Inc. at 330.262.8500 or John@zollerconsultinginc.com. Type of Sale Hourly Rate Times Burden of 38% (x .38) Fully Burdened Labor Rate Residential Builder $14.50 $5.51 $20.01 Residential Retro $15.75 $5.99 $21.73 Residential Service $17.30 $6.57 $23.87 Commercial $17.90 $6.80 $24.70 Commercial Helper $14.25 $5.42 $19.67 Commercial Service $20.60 $7.83 $28.43 Type of Sale Hourly Rate Times Burden of 38% (x .38) Fully Burdened Labor Rate Residential Builder $20.01 10.0 $400,200 Residential Retro $21.73 13.0 $334.308 Residential Service $23.87 25.0 $190,960 Commercial (Per 2 Man Crew) $44.37 17.0 $522,000 Commercial Service (Per 2 Man Crew) $50.51 24.0 $420,917 "When safety is embraced... and adhered to by feld techs, productivity increases." (continued from page 59) MANAGEMENT

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