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Are you 80% efficient?

March 17, 2014 -  By

2922876304_ba25bbf353_oThe ultimate definition of productivity is your ability to keep your laborers on your clients’ properties and, more importantly, to keep them working while on those properties. You don’t make money when they are traveling to and fro, even if your clients pay for the travel. And you make no money with them loading and unloading, even if your clients pay for this, too. The hands down best scenario is when your employees are on your client’s property doing work.

So just how much of their time is spent driving, prepping, unloading, making go-backs, stopping for coffee or fuel?

It’s said 35 percent is the norm, thus you should budget and estimate for 65 percent of on-site chargeable time. If this is where you are currently, the good news is you have opportunity for improvement.

At a recent Leader’s Edge peer group meeting, this same woeful 65 percent standard was mentioned. We decided the group could do better. I facilitated a systems-share discussion around the profitable goal of becoming 80 percent efficient, and we unveiled more than 25 methods and steps for improving efficiency.

Here are a few of them.

1. Have a spot for every tool in you shop—and put every tool in its spot. Do this by drawing an outline for every tool and piece of equipment, so there’s no confusion of where something goes. If the owner or leader is not organized enough to create this environment, bring in outside help such as one of your highly organized vendors.

2. Equally organize each truck, and periodically inspect each vehicle against a tool list. If a truck has, for example, a list of 100 tools and parts, do a weekly spot check on 5 items. If you do a weekly spot check you will keep crews on their toes.

3. Consider a tool bonus that rewards your team for never losing or inadvertently breaking tools or damaging trucks and equipment. Use a take-away bonus, where you start with the full team bonus and take away money each time someone in the team loses or damages something from your vehicle, equipment or tool budget. A team bonus creates a culture of shared destiny. Consider giving bonuses quarterly to create real-time feedback from your crews.

4. Set up stations for how the crews should unload at the end of the day. Make it systematic and orderly. The morning routine should be equally systematic and with time goals. Doable time goals are 5 minutes for maintenance and 20 minutes for install, a participating company decided in the systems-share discussion.

5. Use checklists for loading tools and materials based on job type. Use the KISS method (keep it simple, stupid) so go-backs are reduced to nearly zero.

6. Scheduling and routing decisions should be decided and set the day before. The reasons for last minute schedule changes should be identified and removed. Do you have a client that has gotten used to making last minute changes or have a problem with employees showing up late? These issues must be dealt with corporately, so the culture is clear and absenteeism and tardiness is known as being unacceptable.

7. Measure travel, go-for and yard time and use that information to give feedback to the team weekly. Measure the actuals, and set a monthly improvement goal. Whether you incentivize this or not, constantly brainstorm with your staff on places to cut out inefficiency, and help connect the dots so they understand that the increased efficiency is win-win-win: Good for pricing, good for a healthy company that can invest back in itself and good for increased pay. If your employees own the process, they will be five times more likely to follow it and hold new employees accountable for the same.

Conclusively, get to the heart of your efficiency opportunities by working with your team to refine, create and develop these processes.

Photo: Andrea_44/Flickr.com

Jeffrey Scott

About the Author:

Jeffrey Scott, MBA, author, specializes in growth and profit maximization in the Green Industry. His expertise is rooted in his personal success, growing his own company into a $10 million enterprise. Now, he facilitates the Leader’s Edge peer group for landscape business owners—members achieve a 27 percent profit increase in their first year. To learn more visit www.GetTheLeadersEdge.com.

1 Comment on "Are you 80% efficient?"

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  1. Joanne says:

    I’m a big fan of checklists and setting up morning routines, and believe these will go a long way to improving efficiency. But does the negative re-enforcement of taking away bonuses help or hinder the team dynamics?