The ability to increase prices to improve margins in today’s home building environment is not always possible. Many builders are re-designing their products to be smaller and to be more cost-effective to build. In addition, with the fall-off in demand, sub-contractors have become more competitive and willing to lower prices. All of this translates into a significant increase in the work load of the purchasing department. It can be quite labor intensive to do the work it takes to enter new plans into your systems and to increase the number of sub-contractors to include in the bid process.
Builder Sourcing can help.
Builder Sourcing can augment your staff during these times when there is more to be done then there are people to do the work. Builder Sourcing can also use its Construction Management Systems to electronically generate bids and to compare those bids automatically against each other, significantly increasing the number of bids that can be released and significantly reducing the amount of time it takes to do these activities.
Builders need to ask themselves if they have the following capabilities:
- Ability to significantly increase the number of sub-contractors bidding plans and projects
- Ability to manage costs down to the unit of work (price to install a sheet of drywall and the number of sheets needed) vs. a single cost for the task
- Ability to easily change manufacturers, products, options and the like without being tied to the past because of the effort needed to make changes
- Ability to understand and manage costs on a project so as to not exceed budgets and what costs should be
If you would like help in assessing your purchasing capabilities & systems and determining an action plan to improve results, please contact us.