In landscaping, efficient, safe labor is what powers your profits, plain and simple. Singlemindedly protecting your labor force from wastes of time and unnecessary and redundant motion will put you in the top tier of profits in our industry.
Construction projects generally consist of 30% labor. Maintenance and arbor care are closer to 50%. These are huge, variable and manageable costs that must be optimized if your business is to be truly successful. A swing of only 10% labor efficiency can improve your bottom line 6%-10%, taking you from ho-hum to solid profitability. Labor usage is our most variable cost and, fortunately, also the most controllable, so this is where you must laser-focus your management efforts.
Most labor efficiency improvements can be made simply by observing and thinking. These are both inexpensive investments with potentially huge returns for the effort. But this analysis takes discipline, time and commitment.
You’ll want to review all of your business actions, from activities inside your office to workers out in the field, searching for any inefficient or redundant use of labor.
Crew routing, of course, is top of the list. “Windshield time” is a dead loss. But how often are you reoptimizing routing? Make this routine for both maintenance and construction dispatch.
Work staging is similar to routing, but you’re plotting the course of workers on-site instead of on-road.
How efficiently do crews load and unload? Consider the order the tasks are arranged. Do crews constantly go in and out of back yards or back and forth over the site? How can you minimize motion itself and simplify sequential tasks? Observe your jobs and look for opportunities to condense movement.
Proper material staging on larger jobs will save money and ease workloads, while staging mistakes shred profits with standby time or extra effort. Material must arrive in correct quantities, correctly timed for when you ideally need it. Stockpiling is usually your enemy, as you end up double- and triplehandling and moving materials. Stockpiling also incurs plant maintenance expense and often material theft as well. Jobsite material stockpiles are generally profit-killers. Get as close to “just in time” and “just the right spot” as much as possible for deliveries to minimize the labor spent between the delivery truck and installed in the ground.
Be thorough in your ordering. Order sufficient quantities or even a little extra of critical parts to save the uncountable expense of foremen leaving jobs, wasting time standing around Home Depot or an irrigation supply store just to pick up $3 of fittings. Do the math: Count your number of foremen, count how often they leave a site in a week and multiply that by $30 per hour for 52 weeks. Foremen leaving jobs for parts is the single most dangerous and avoidable cost plaguing most landscape companies.
Your best investment for increasing company profitability is to just stop and think. Really think through staging and crew makeup thoroughly, before boots ever hit the ground. First stop and think to improve every step and phase of your jobs before starting.
Due to COVID-19, most have learned we can do far more from our desks than we ever did driving around all over town. Consider the good procedures you’ve learned from your pandemic response and make these new practices stick.
So, what’s the very best “best practice” to improve your business? Consistently, routinely and singlemindedly focus on eliminating unnecessary and redundant motion of men, machines, vehicles and information.
Just stop and think. And watch costs drop and profits soar.
Gary Horton, MBA, is CEO of Landscape Development Inc., a green industry leader for over 35 years with offices throughout California and Nevada. He can be reached at email@example.com.