July 15, 2011

Shovelling out waste

Building better snow and ice operations


No matter the size of the snow operation you run, we all have waste — costs that rob us of valuable profit and opportunity. There's simply no better time to deal with it than before the snow flies.

Waste is any process that does not add value to your customer. In snow and ice, our customer's value is simple. They pay us for safe lots, liability protection, snow removal or relocation (in some cases) and accurate billing. Almost everything else is waste. How we get to their site, how we prep and fuel our trucks, where we pick up salt, how we pay our staff, how we track our vehicles during an event — all these processes are necessary for us, but they don't provide any value to our end-customers. Your customers aren't going to pay you more than your competition because you have to drive further for salt. All they want to pay for is a clean, safe, professional-looking property.

Because we're busy, and stretched for time, so many of us stop questioning the problems and waste in our business and just accept them as the way we do business. Years slip by, and before we know it, we're surrounded by waste that nobody questions, much less tries to find a solution for. As you begin your preparations for the snow and ice season, question everything. Look at your business and all the time and money spent not serving your customers — then work to eliminate this waste. The process of eliminating waste is never-ending, but the journey will go a long way to ensuring your success.

Here are just a few examples of waste that eat at the profits and potential rewards of snow contractors.
Equipment downtime
When a machine goes down, a design-build project schedule might slip for a day or two, but there's no delaying snow and ice control. When your equipment goes down, your costs go up — and fast. It's very likely you need to get the equipment to a dealer, wait in line behind the other 100 contractors needing an urgent repair, and then get the equipment back to site. In the meantime, you've got to move replacement equipment to the site to complete the job, your labour costs are rising as you move equipment around, your staff is working longer and getting more tired, and your customers get frustrated.

Eliminate the waste: The cheapest repairs are the ones that don't happen. Issue pre- and post-shift checklists to all operators that include preventive maintenance procedures.

Look beyond the sticker price when you purchase equipment. Buy from dealers with great service departments who carry a large inventory of parts. A few lost days waiting for parts or repairs will cost your company much more than you'll save on the sticker price.

Train your staff on inspections and simple repairs. A small tool and parts kit and a pre-season meeting to show your staff how to perform simple repairs can help them fix small issues before they start to cost you money.

Equipment utilization
Unused equipment capacity is a big waste for many contractors who do snow in the winter and grounds maintenance in the summer. I see many expensive pieces of equipment parked in the summer, waiting for the next snow season to arrive.

Eliminate the waste: The right equipment purchase could be doing much more for your business. Agricultural tractors aren't much use for contractors in the summer. Consider renting equipment for the snow season, or buying construction loaders instead of agricultural tractors which can be used or even rented out during the summer. Construction loaders cost more, but have more power, depreciate less, are more efficient at switching work tools and are more useful in the summer months to a typical landscape contractor.

Material waste
All you need to calibrate your salters is a scale, a bag or bucket, and a watch, and yet most snow and ice contractors don't make this simple investment in calibrating equipment. Improperly calibrated salters cause massive waste. Applying too much salt increases your material costs, while too little salt causes re-work, customer dissatisfaction and potential liability problems.

Eliminate the waste: Before the season hits, calibrate your salters to ensure proper application rates of salt and de-icing materials.

Estimating waste
To price your work profitably, you have to be right on two sides of the same coin. You need accurate quantities and you need accurate prices. If you're not accurate on both sides of this coin, you're losing money. All-too-often, contractors go to great lengths to estimate quantities accurately, then watch all that accuracy go to waste by pricing those quantities incorrectly.

A loader or agricultural tractor, for instance, will have very different costs and prices, depending on who is using it. If Joe's Landscape bills about 200 hours per year on the equipment while Greentree Landscape bills 1,200 hours per year, it's highly likely that Greentree's costs per hour are less than half of Joe's. Joe may even be a little faster on the machine than Greentree, but if Joe tries to price his loader with Greentree's charge-out rate, Joe will be out of money and out of business quickly. For both companies to price work successfully, they must know what their cost per hour is to run that machine.

Eliminate the waste: Use online tools to measure site areas (Google Earth, Bing Maps, findlotsize.com are some free examples):
Visit sites to look for obstacles, problems, historical issues and other slow-downs that don't show up on overhead pictures
Know your costs — especially the hourly costs of your employees (wages, burden, downtime, etc.) and the hourly costs of your equipment (including purchasing, repairs, insurance, fuel, utilization, etc.)

Know your company — your prices must recover not only your costs, but also your overhead and desired profit. Are you certain your prices have got you covered?

Systems waste
Timely, accurate information ensures we pay our bills, our employees and invoice our customers accurately. However, time spent on these tasks is waste, it doesn't add value to the customer. Entering information into our systems is waste. Mistakes in processing this information are waste. Transferring this information from person to person is waste.

Eliminate the waste: New technologies improve the accuracy and reduce the time (and man hours) spent managing information — enabling your office to manage more work in less time, and with fewer people.

Smartphone time-keeping solutions electronically track employee times and locations, and instantly import data into accounting for payroll and/or job-costing. GPS fleet systems track vehicle locations, site service records and even monitor driving habits. One person and a screen can manage route changes, get site service updates and generate instant time and service reports in real time … without having to disrupt field productivity with phone calls. Review your paperwork — what information gets filled out and handed in but never used? Is it really necessary to track it?

Productivity waste
We've all been there. It's the first snow event of the year. Drivers are lost, running behind, looking at maps and site instructions and trying to figure out their routes in the middle of an event. Mistakes happen. We get called back out to fix missing areas, or piles left in the wrong spots.
Eliminate the waste: Staff need to know exactly where to go and what to do. They need to be provided with the information they need to do their best on each site. This includes:
  • Route maps, to show where they are going and the order they should hit the sites
  • Site maps, to show exactly which areas on the site they are responsible for
  • Contact information, so they're not calling you wondering if the salt vendor is open
  • Checklists, what gets done at the beginning of the shift (inspect all fluids, check plows and mounts), what gets done at the end of the shift (empty and clean salter, fuel truck, submit all paperwork)
  • Dashboard GPS for trucks, a small investment that will pay for itself over and over again. Your drivers can focus on driving safely while the navigation system gets them exactly where they need to go with no stopping, no map shuffling, no stress.
Sometimes, we get so focused on just getting the work done, for the least cost, that we focus too much on the little costs. We can save money here and there, but too often we lose sight of the costs to our operations as a whole. "I can't afford to pay the guys for a full-day snow prep meeting," "We're not big enough for GPS," "I don't have the time to put together checklists." These reasons seem sound when we're in the moment, trying to save every dollar, but the costs of the problems without these systems are exactly what keep us working too long, too hard, and for too little money.

With a long-term focus on reducing the costs of waste, looking not just at the costs of improvements, but the costs of not improving, I know you will find running your snow and ice business more simple, more rewarding, and ultimately, more profitable.
Mark Bradley is president of The Beach Gardener and the Landscape Management Network (LMN), based in Ontario.