A. Whether it's Harth Builders or an outside trade partner doing the work, this column shows who is responsible.

B. The labor rate shown, $32 per man-hour, includes burden. "Our base rate is $25 per man-hour," Harth says. "Another $7 per hour per employee is added to that to cover things such as workers, compensation and general liability insurance, vacation, benefits, holidays, nonproductive times, cell phone use, vehicle allowance, and gas reimbursement." Note: This figure is not your markup.

C. This percentage markup adds to the price so that your company makes a profit.

D. The last line item — the retail amount — is all that Harth Builders' clients get to see.

E. Harth broke out information for the skylights and family room options.

Slippage—the difference between the profit margin expected at the outset of the project and the actual profit margin achieved—is a critical metric for analyzing the success of a remodeling firm. That difference can be found in the waste that's inherent in almost any process and can be easy to find in the course of any project, Doug Howard writes for Remodelers Advantage. Howard suggests that becoming LEAN—eliminating wasteful processes and procedures—can be an excellent tool for combating slippage. The three components to successfully implementing LEAN practices—workflow, workplace, and culture—need to reinforce each other, according to Howard.

To optimize your workflow, you have to look at a process from end to end, mapping it out, finding the waste, and eliminating the waste—creating a better way to get through the process. Culture is about fostering open communication, creative thinking, and having a willingness to allow ideas to come from your team—the people who actually do the work.

You can tackle slippage by looking at your workplace. Analyze the physical layout of your office, your vehicles, the job site, and even your network drive. Minimize wasted steps, group people who need to communicate together, and create a more harmonious flow. There are areas which can either make it easier for work to flow or more difficult.

Using LEAN principles, workplace organization is done through the 5-S process.

  • Sort: Remove items you don’t need from the workplace
  • Straighten: Put things in their place and have a place for everything
  • Shine: Keep the work area clean and uncluttered
  • Standardize: Make it company policy to set things up that way
  • Sustain: Keep it looking that way over time.

When you can clearly see what you have, when and where you need more, what’s missing, and know where things go, we start to realize time savings. By eliminating work time spent searching for a file, the run back to the warehouse for a tool, or cleaning up things that really should be removed, you can run more efficiently, reduce slippage, and run LEAN.

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