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Production Rates and Benchmarking Them - Who does it?

Discussion in 'Business Operations' started by merrimacmill, May 14, 2012.

  1. merrimacmill

    merrimacmill LawnSite Senior Member
    Messages: 515

    I was not able to find anything on here about this practice, and its something I've been getting very into this year, so I thought I'd share what has been extremely beneficial to me so far this year, and see if others have any insight or tips/tricks on the process.

    This year I have gotten very serious about procedures, systems, and standardized estimating processes. My goal (which I'm just about at) is to have an estimating system so precise that 5 random people could go price a job with my procedure and come up with the exact same price.

    I've determined that the days of walking on a job and saying "I can mow that for $40" or "I can take care of that in... eh... 4 hours" are gone. Everything in my estimating procedure is now based on measurements, production rates, and efficiency factors.

    To achieve this, I've began time tracking every process or service that my employees perform. I then have spreadsheets that I've programmed to calculate production rates, and efficiency factors based on "real world" working conditions.

    For instance, during the spring clean up and edging of our big box stores, I create site maps that label every single mulch bed (m-1, m-2, m-3, etc..), I also know the sq footage and perimeter of every bed. I gave the crew foreman a stop watch, and he times and records the pruning, clean-up, and edging of each bed. This data comes back to my office and I enter it into the spreadsheet, and I do this for every job we do. The spreadsheet calculates averages for everything, and because of this, I now know exactly how many linear feet per hour my crew can edge, how many sq feet of planting bed per hour they can clean out, and the number of various shrubs they can prune in a man hour, and so on for every service we perform.

    This has created accountability in my company, on my end and the employees end. If a 1000 sq foot bed took 1 hour to clean out last week, then why did another bed of the same size take 2 hours to clean out this week? Well then the investigation commences, and I fill out "root cause" forms until I identify where the issue lies. It has also enabled me to give my crew production goals based on the rate they were able to work in the past, it gives them a goal to work towards. If production goals aren't met, then we figure out why and how we can make sure they are met next time.

    To bring it a step further, my supervisor and myself fill out "waste inspection sheets" each day. Any and every form of waste is identified, then at the end of the week meeting we figure out ways to eliminate that waste. For example, removing mulch from planting beds earlier last week, each time a wheel barrow was full, 2 people would stop work and go to lift it into the truck. I counted the number of times this happened, and how long each trip took, and determined that by the end of the day we lost almost 2.5 man hours of production due to 2 people lifting wheel barrows into the truck. The addition of a simple "movers type ramp" to the truck to push the wheel barrows into the truck with 1 person instead of 2 will save approx 12.5 man hours per week, which is equivalent to over $500 in lost billable time each week, or $17,500 in lost time per season (35 weeks)... I understand its all relative though, because no, we do not lift wheel barrows into the truck on every job, but I'm sure you get the idea.

    I know this is more of an "my 2 cents" post than a typical question that comes up here, but the data I've gathered from this process has been changing my company on a daily basis and I couldn't be happier about it, so I thought I would share this with everyone else.

    Which brings me to my question, who else is doing a similar process to this, and how do you handle it?
  2. BeachysLawn

    BeachysLawn LawnSite Senior Member
    from VA
    Messages: 271

    Thats awesome that you are getting so detailed. I'm almost too small (only have one employee) to really do this well but have been trying to get some of my production rates down to a science. Though I'm sure they will change somewhat when I am no longer in the field.
  3. GMLC

    GMLC LawnSite Platinum Member
    Messages: 4,345

    Very nice. I do measure every property I estimate to keep all my estimates uniform. When I do get larger I would like to do what you are doing.
    Posted via Mobile Device
  4. Duekster

    Duekster LawnSite Fanatic
    from DFW, TX
    Messages: 7,961

    I do some job costing and look at production rates.

    One thing to keep in mind is things do go wrong from time to time. Mostly the human factor.

    My two cents is to add a nice buffer to your bids but ask the crew to do it at your best rates. I put the buffer amount aside. At the end of the quarter, share it as a bonus.

    Do not let anyone know your exact method of calculating these figures.
  5. Roger

    Roger LawnSite Fanatic
    Messages: 5,938

    I don't offer many services. My business is primarily mowing. But, I do have a stopwatch affixed to the door post on my pickup. It is set when getting out, and is stopped when I get in. I keep a journal for EVERY job, including mower settings and what was unique about the visit. The time for that job from the stopwatch is included in the information.

    I am always asking the same question: If the visit was 2 minutes longer today, what happened? If it was five minutes shorter, what did I do differently that improved the time? I know my properties very well, as most have been with me for many years. In many cases, a visit will not vary more than a minute or two (say, out of an hour). In one case, I mow a 1.8A property where my time is always very close to 1:28. My time never varies more than two minutes one way or the other.

    Today, I worked two properties that are side by side. Last week, my time was 3:21, today it was 3:25. The early part of the visit was foggy, and the grass was very wet. I think that explains the four minutes. These are both large properties, requiring about 1:00 to trim with string trimmer, about 1:00 work with 36" w/b for trim work, and then a bit more than an hour for ZTR work. Each property has many trees, beds, a pond, and other obstacles that make parts 1 and 2 very slow. I continue to look for better production, but think I've nearly squeezed out everything needless, and have found the best paths.

    I think keeping time is very important because it keeps one honest from visit to visit, but, more importantly, gives good insight into making good estimates for potential other jobs.

    I only do about 50 hours of bush trimming per season. However, I keep time records for this work as well, along with category (large, medium, small) and number of bushes. The fact that it is written down is useful in making estimates for other jobs.
  6. Az Gardener

    Az Gardener LawnSite Gold Member
    Messages: 3,899

    A few years ago we a had a lengthy thread about this topic. I have used worksheets for years that the crews fill out at each job. It details things like equipment time vs labor time, how much debris was taken from the job what tasks were completed etc. From these I have been able to better understand our costs and come up with %'s That makes our bidding much more accurate. We also calculate our travel vs on site time to know how many hours we are actually on a job producing income vs just burning payroll hours. We are at about 78% these days it has come down as we have added more employees.
  7. Az Gardener

    Az Gardener LawnSite Gold Member
    Messages: 3,899

  8. Duekster

    Duekster LawnSite Fanatic
    from DFW, TX
    Messages: 7,961

    I read that and found it interesting. You will see a drop off on production ratios on larger crews because the windshield kills you but frankly your overhead recovery should improve provided you have matched the job size with the crew size.

    APLUS LAWN CARE LawnSite Senior Member
    Male, from North Missouri
    Messages: 587

    I think it is great that you are keeping track of all that information and streamlining your bidding process as well as keeping your estimates accurate. I do not have the time or energy to keep and track all of that information, but I applaud you for it!

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