Given the rate of volatility that the price of key construction materials are currently undergoing, contractors are doing all they can to cope. Technology can provide a helping hand.
For Stansell Electric Co., www.stansellelectric.com, Nashville, Tenn., the purchasing process is one that is critical to way it does business. For that very reason, it is a strategy that the company is constantly refining through the use of technology. This applies to both the major purchasing decisions made at a broad level, as well as those being made in the field.
Looking first at the major purchasing decisions that are made before bid day, one thing that company tried in the past was developing a system that would take the standard pricing that gets updated via a data service and puts standard prices into its accounting system (Viewpoint Construction Software, www.viewpointcs.com, Portland, Ore.), which would allow the ability to pull up a certain material item code and have the current price.
“This was useful for service jobs where we wanted to be able to put in a material and have a reasonable price for it for billing and costing purposes,” says David Stansell, president, Stansell Electric.
The company has since gone a different route, but the direction Stansell would like to see in place is one he has seen work for another company.
“Another contractor we knew had a commodity purchasing agreement in place with the distributor and when a field foreman called the distributor to tell them what they needed, the distributor would prepare that and send electronically,” says Stansell.’This would (generate a PO for themselves) and then the contractor downloads that daily, which then creates a PO in their own system.
“They had rules (set up) though, like you cannot create one unless you ship it; so that there were no back orders — that streamlined their processes. And the system would then compare prices that the vendor sent over with contracted price. This protected against any discrepancies.”
What makes such scenarios possible is working with a backend system that is open and scalable to accommodate such requests. This is an area where Stansell believes the system they use from Viewpoint really shines. This value extends to multiple parts of the company’s operations too.
“We have developed many different types of systems in our Intranet so that users can do various tasks–look up job numbers, for example,” he adds. “The operations support group actually uses this for shipping and receiving. They get a shipment in, and it might not have (a) PO number on it, but maybe it references a job number or owner name. Now they can go in and look up (that item) by various (different) points.”
Circling back to the purchasing process, Stansell believes it is also important to have a good strategy established for the field workers. Given the fact the field workers–especially those involved with service work–are using mobile connected devices on a routine basis, why not put some power into their hands?
“One of the things we do is our field guys, at the superintendent level, all have laptops and all input a weekly look ahead,” says Stansell. “Part of that includes what materials and tools they will need. This enables the guys back at the shop to get those things staged and ready for them. It also enables our operations support group to get materials and tools they have requested staged, so that when they come in during the morning they just load up the trucks and go.”
Technology cannot help control the prices of construction materials in the market today. But the right systems that are tied to efficient processes can make all the difference in the world for lowering additional costs.