Production Builders | FMI Corporation

Material Usage

During the heady days of the last five years, many of the top-20 builders have embarked – with much fanfare – on various centralization initiatives. These initiatives promised everything from revolutionizing the home building supply chain to delivering 20 percent reductions in cost and cycle time. Virtually all of these initiatives failed to achieve their goals, let alone revolutionize the industry.

Many home builders have reacted to the need to preserve margin by mandating price concessions from their trade partners, channel partners and product manufacturers. While this may work in the short term, without a detailed understanding of each key trade package, the builder is unable to manage the situation.

The solution is for the builders to begin their margin-management programs by focusing on cost reduction – not price reduction. The first step is to take the most-expensive trade packages – framing, drywall, concrete, roofing, etc. – and perform detailed takeoffs of the materials needed to complete a significant volume of active models in their division. A critical step in this process is to field-verify the material takeoff by walking units and counting material for each model being evaluated.

Once armed with both the takeoff and field-verified counts, the builder has the knowledge to control costs, not just manage bids. The challenge then becomes not to use this knowledge like a newfound hammer to pummel respective trade partners or suppliers with whom productive relationships are essential. Instead, use the verified data as a catalyst to discuss the importance of efficiency, material conservation and cost management in today’s residential environment.

Since teaming up in 2006, FMI Corporation and CatCon Systems have found that volume home builders across multiple markets are able to realize an average material savings of more than $2,000 per home just by evaluating lumber, drywall and siding. Additional savings opportunities have been identified in roofing, masonry, interior trim categories and plumbing. Whether through an outside or internal resource, builders who understand the true cost to build and communicate those costs in a fair manner will enjoy substantial savings.

Project Execution

Project execution is the term that FMI uses to describe all that builders do, both within the operations of their organization and externally with trade partners to affect performance on building a community. Our consulting and training resources work with builders’ operations personnel to improve project execution. We build operational excellence by providing consulting and training for construction-management improvement and creating effective relationships with your trade partners.

With an impressive stable of project-execution-related services, FMI has the know-how to help builders improve the bottom line. FMI’s knowledgeable consultants will help you identify and prioritize your greatest opportunities and will help build action plans to ensure you achieve the desired outcomes.

Project Partnering and Team Building

FMI is distinctly business-pragmatic in its approach to assisting teams in managing project risks. FMI's team-building process is focused on getting the right people together at the right time to make the right decisions that will directly impact the bottom-line project issues of safety, schedule, profit and quality. FMI custom-tailors its approach to the specific needs of each builder to ensure that expectations are met and an appropriate return is achieved for the participants.

Sustainability

In this complex and changing business environment, it is critical for single-family builders to develop a strategic vision and implementation strategy for sustainability to stay ahead of the curve, reduce risks and future-proof the sustainability of their businesses.

FMI and Schweitzer + Associates have established a relationship to offer leadership and assistance to companies in the single-family industry in creating and implementing sustainability strategies that optimize our clients’ investment while creating a competitive advantage in the marketplace.

For more information on management consulting for Production Builders, please contact Clark Ellis at 919.785.9376.