[cutntrim]

Rick - check your PM

[cutntrim]

We seem to be getting off topic a bit here. What I was originally interested in was what do you feel is a reasonable % for downtime in a maintenance division/business? Obviously I feel (and everyone seems to agree) that 25%+ is too high. So what is your % and what do you think it "should" ideally be?

[Dale Wiley]

Down time or support time ??

Support time is time required to support field activities in shop repairs, dumping, and other times that need to be allocated over the account base.

I estimate my support times at 15%. As of today, because we are doing some pre season things, the rate for the first 5 days is at 22%. That lands in the unacceptable range in our business, but we have a lot of time to improve.

I don't think any of us can say "you need to be at 20%, 23%, 10 %. " What I do in my business is different.

You and I mow grass probably about the same rate. How we support those operations is going to differ, and where all business's have a chance to recover time and convert it to billable time.

How I manage a route is different. We all do things differently. So therefore, it is difficult to say.

I have worked with company's all over the US. I have seen rates from 122% labor eficency, to 68% labor efficency.

By far the most fall in the 25% (high) to 12% ( efficent).

How you acount for and convert those hours to 100% or better efficency is what is important.

[cutntrim]

That's the type reply I was originally looking for Dale. Yep, just like pricing there is going to be variance across the States and Canada between companies in downtime %. The way I have "Downtime" calculated from my logsheets, it includes load/unload time + travel time between properties. That's it.

I track "Equipment Maintenance" seperately and it includes gas station stops, dump trips, organizing/shuffling around our storage units, and working on machinery or dropping off/picking it up from the mechanic I use.

Part of the reason my % is high is that I need to be more efficient, another part of the reason is that my maintenance route is spread out over two cities in a very heavy traffic area and drive times are high because of that.

[rbriggs]

There was a great article in this month's PRO magazine about efficiency and how one contractor stays on top of it.
Some good tidbits on how to get it done.
http://landscapepro.cygnus.proteus.c...?pubId=1&id=37

[Dale Wiley]

By far the most fall in the 25% (high) to 12% ( efficent).

Quoting myself here

A maintenance business can get to 92% labor efficency fairly easy. To make the step to 100% and beyond is not capable under most "process" that a lot of business's "try " to find.

You have to have a specific system designed to get those labor numbers there. It involves operations, human resources, production management and solid FINANCIAL information and management.

If you have your operations at say 20% support, you should reasonably beable to get to 15% with common sense management.

In a 500K business, a 5% improvement in efficency could result in an additional 25K in revenue WITHOUT any additional labor or capital outlay.

Every business has more money left in it. You just have to wring it out...

[cutntrim]

Originally posted by Dale Wiley

Every business has more money left in it. You just have to wring it out...

Amen to that!

[Mac]

I dont want to jack this thread responding to Rick's earlier question but will ellaborate if anyone else is interested.

However, on topic, I think we all want to know how companies achieve greater than 100% efficiency. For me, when I say I estimate 80%, that means that for every hour of payroll that 48mins will be billable. Dale, please discuss how a company bills more minutes than there are in an hour, if you dont mind.

[Mac]

double post

[Rick Carver]

Mac

You already got it! ;-)

It's not that you bill more minutes then an hour has, you just have to understand YOUR COMPANIES TIME VALUE, in your estimate. You got it!

In fact,,,,,, I guess you could say because you are estimating 80% and are realizing that(80%) in operations, then you are actually at 100% of what your estimating,,,, right?
I would think then that your other 20% is being paid for under overhead?
It's this other 20% that would have me bugged........ again,,,, " IF ",,, you are paying this other 20% in overhead, your company is partly paying for your customer's work to be completed. It is like having material for a job cost $100.00 and you only charge the customer $80.00,,,

To be more specific to your question,,,,
I have one guy,,,, schedule all his work to be completed in a 40hr wk. I calculate his drive time,,, loading and unloading,,,(minutes here),,, give him his work on a rout,,,, tell him to consider this work as his 40hr JOB,,,, also tell him that if he gets done anytime under the budgeted time I will still pay him his FULL 40. AND,, if he wants more work,,, and I have it I will pay him again for the additional hours above his usual 40hr wk"Job" budget,,,,, as long as he doesn't go past his 40 clock hours I have no OT. He makes more money in less time.............>>>> SO DO I <<<<

And because I set up a seasonal budget based on a 40 hr wk per employee,,, and 40hr weeks to be recovered over 7 days, not 5,,, for weather conditions etc,,,, my companies recovery against it's estimates is normally around 100% efficient.

I just am a freak when it comes to recovery, time valueing, estimates and most of all having the company become and then remain solid by using the one thing that makes us or breaks us,,,and we can't lose a dime till we lose time <<< FIRST>>>

HTH
Rick

[Mac]

Rick, Id like to chew on this more with you over the seminar. I think we are saying the same thing but Im not certain.

[Dale Wiley]

Dale, please discuss how a company bills more minutes than there are in an hour, if you dont mind.

Rick pretty much summed it up....

I estimate a job at 1.5 hour production on site, and since everybody seems to like 20% support, we know this account will incur support times of .30.

Total time 1.8 hours. This employee / team is assigned 22 jobs in a 40 hour week.

Under Ricks example above, if the employee is able to accomplish the assigned tasks in the specified time, then he makes his 40 hours, the company makes its desired net profit as long as there are not time losses.

AND,, if he wants more work,,, and I have it I will pay him again for the additional hours above his usual 40hr wk"Job" budget,,,,, as long as he doesn't go past his 40 clock hours I have no OT. He makes more money in less time.............>>>> SO DO I <<<<

Remember I put forth that is the employee has more control over the majority of the support times than we as owners / managers do. I submit he can trim 8% off that support time which would then allow the company to assign them more work, they will make additional money, and the company will bill an additional 3.2 hours, and the company's only liability to these hours will be direct wages at REGULAR scale, since we are still inside 40 hours. We have already recovered our overhead hours in the previous 40 hour billing.

Therefore we realize the additional amount of revenue in those 3.2 hours that was formerly alloted to overhead as additional net profit, IN ADDITION to the already set and protected net profit, and we come up with Ricks most favorite 2 words, hunt and fish, ohhh my bad NET NET.

This process does not happen easily, and there are a number of things that have to happen in several different areas of the business to make it work, although partial implementations can show incremental improvements, it is like a four legged stool.

You cannot change the level of the stool by shortening the length of one of hte legs and expect the company to stay stablized very long...