Just-in-time (JIT) is a term often applied to a cost-saving inventory management strategy in the manufacturing sector. For remodelers, however, it’s typically the way they organize and produce their jobs every day.
Timothy Burch Jr., CR, of Burch Builders Group, LLC, in Warrenton, Va.; Paul Winans, CR, of Remodelers Advantage in Berkeley, Calif.; and Jesse Morado, CR, CAPS, of Renovation Coach, Inc., in Atlanta, Ga., share their thoughts this month on how remodelers can best handle this challenging aspect of their business.
JIT has appeal to the manufacturing and distribution sectors because it limits inventory and associated carrying costs. Likewise, remodelers, particularly small to mid-size operations, typically don’t carry inventory that’s not earmarked for a specific job, Tim Burch says. Usually, materials are delivered to the jobsite and are used within a short time, saving carrying costs as well as the expense of a warehouse facility, managing inventory and transportation.
There’s another very good reason for JIT, which remodelers may call staging. “Remodelers really don’t have a lot of area to dump large amounts of material, and on certain properties, particularly in urban areas, you have challenges with access,” says Jesse Morado.
"Changes in recent months suggest the just-in-time model applies equally to the distribution chain."
Getting a project started and on the books with receipts coming in is an advantage of just-in-time delivery, as opposed to waiting for delivery of all materials before starting work. That could push off the start of the job by weeks or months, Winans says.
Another advantage of staging, or JIT, is that it can minimize losses by reducing the amount of material and the length of time it is at risk of theft, Morado notes.
Build Good Relationships
“One of the key issues is you have to have really good relationships with suppliers, and you have to understand what their time frame and availability are,” says Morado.
Burch agrees on the importance of building good relationships with suppliers. “Remodeling is a relationship business, and maintaining good relationships with suppliers and having people you can depend on is important,” he says.
Winans recommends a periodic phone call or lunch with critical suppliers to go over what’s new and what’s the same in terms of lead time and product availability. “Generally, remodelers get better service from a supplier or vendor they have taken the time to get to know and with whom they’ve invested in an emotional bank account,” he says.
“There are always difficult situations where the supplier will need to step up to the plate. You don’t get that if all you do as a remodeler is call that person when something is wrong. Take the time to learn about your suppliers’ challenges and how you might support him or her,” Winans adds.
Special orders for items such as cabinetry should not pre-sent a problem, as long as the remodeler has done a good job of planning. “The manufacturer is going to be able to provide you with a delivery date, but if you don’t do a good job of ordering on time, then you could experience a delay,” Morado says.
Burch has seen changes in his suppliers in recent months that suggest the just-in-time model applies equally to the distribution chain.
“It’s not that they’re servicing us any worse or not following through; our suppliers have been pretty good with that type of thing,” he says.
There used to be a lot of material readily available, but recently materials are not so easy to come by and delays may ensue for remodelers who don’t take into account longer delivery schedules and plan lead times accordingly, Burch explains.
He blames it on a slowing economy and the reluctance of suppliers to carry large inventories when demand is uncertain.
Another side to materials just-on-time is issues that remodelers may have with clients. “It’s very important to have your client make decisions upfront. I, as the remodeler, haven’t been doing a good job of effectively managing and helping the client if they don’t understand the “need by” dates and aren’t making decisions in a timely manner,” Morado says.
Picking up the phone and saying you need it tomorrow is not a realistic strategy; it’s not what the just-in-time model is about. Rather, just-in-time is about diligent planning and building good relationships, Morado says.