Adding Efficiency

From 2001 to 2007, kitchen and bath dealers prospered if they could add capacity quickly enough to meet the growing demand from builders and consumers eager to take advantage of the home boom. With the huge demand for housing, new-home construction kitchens and baths were an integral part of many dealers’ businesses, and the boom in home building helped the kitchen and bath industry see astronomical growth during this time period.

Today, however, home construction is down and new-home builders are buying less and demanding more from the kitchen and bath dealers they work with. While many dealers are increasingly focusing their efforts on the remodeling sector, the loss of new-home jobs – along with the more demanding nature of existing jobs in this area – has hurt profits for many kitchen and bath professionals, leaving them looking for creative ways to improve their cash flow.

Unfortunately, as the market cools, dealers cannot look to sales growth to solve their challenges – so they must become more efficient. Meaner and leaner are the hottest buzz words in business today, and kitchen and bath firms’ ability to implement more streamlined, error-free processes can be critical to survival.

During the boom times, many kitchen and bath dealers created a patchwork of business processes to meet demand. These ways of doing business were fine when sales were growing and service requirements were low. However, the labor and errors associated with these business processes are unprofitable when sales are not as strong.

As a result, dealers now need to look inward to find ways to reduce labor and increase quality by streamlining their work. Re-designing inefficient processes will improve kitchen and bath dealers’ profitability and help them weather these more challenging times.

What Job Files Reveal

There is a simple efficiency test that can be completed in less than five minutes to measure a firm’s efficiency. This test follows a very simple concept: A completed job file contains artifacts from all of the business processes that existed at the time the job was completed. Like a fossil record, job files tell the entire history of a dealership and the challenges it faced over the years. They also tell us where lost profits can be recaptured.

A streamlined job file should contain no more than six different types of documents that are used to manage the delivery of a job. However, most job files contain 21 or more types of documents. These extra documents provide clues to where inefficiencies exist. To evaluate your operation, pick a normal job file from your archives and use it to answer True or False to the following questions:

1. The job file only contains the following: kitchen layout, perspectives, a signed quote, purchase orders, a job information sheet, a credit agreement (optional), and manufacturer acknowledgements.
   
2. There are no calculations performed by hand on any documents.
   
3. No copies of the job file’s content are being made for other employees, divisions or departments.
   
4. The documents in the file are never completed by more than one person to ensure accuracy.
   
5. The job file itself is incredibly easy for anyone to find when a customer calls.
   
6. If this job has a warranty call eight months after the job is completed, the job file and all of the details of the job can be located in less than five minutes.
   
7. All items in the job file were ordered with normal lead times (i.e. not rushed).
   
8. Pricing for the estimate did not rely on pricing produced by design software.
   
9. All of the parts and work for the completed job were accounted for in the original estimate.
   
10. The quote information was never re-keyed onto a sales order, purchase order or into the accounting system.
    
11. All job file information is accessible on demand by management in a summary format that does not require manual effort to compile.
    
12. If the job folder is lost, it can be reproduced in its entirety in less than five minutes.