FMI

I have worked with and helped a lot of trade contractors impact productivity and operational performance. I know with complete confidence that putting 5% - 10% of your annual field labor spend on the bottomline is very doable. That’s what I spend most of my time doing. It’s simple, but not easy to do. If it was, they would have already done it with out my help. If you want different results, you’re going to have to change some things. This could include culture, structure, processes and the hardest of all, behaviors. Change is difficult and most construction executives know how to build amazing projects, but have very little training or experience in change management. Attending conferences, seminars and peer groups are valuable, but what percent of the good ideas that you read about, hear about or learn through your peer group, do you successfully implement?

Do your foremen know where they are on the course?

I'm really excited about the release of my most recent podcast with Lou Perez at @ Lumber. What separates good contractors from the best in the business? In this episode of The Builder Upper Show, Lou Perez sits down with Scott Kimpland from FMI Corporation to break down what operational excellence really looks like in construction. Here’s what you’ll take away: 👉 Why “Volume kills, profit thrills” 👉 The real drivers of productivity 👉 Why your field leaders are everything and how to actually support them 👉 The power of process, discipline, and saying NO to the wrong jobs 👉 How top contractors think differently (and stay ahead of the pack) Check it out through the link in comments below. Send it to the one person on your team who needs to hear this.

It is an amazing time to be in the construction industry!

Another great meeting with FMI Mechanical Peer Group #71 in DFW. This group represents ~$2.5 billion in MEP revenues in the industry. These are what market leaders look like. They challenge and support each others’ success.

Manufacturing output is up 2.3% since January while factory jobs fell by 100,000. The Army Corps just awarded a ten-year, two-billion-dollar contract for military microgrids. TSMC is raising capital spending and projecting 30%-plus revenue growth. None of this is pausing for geopolitical clarity. At the same time, D.R. Horton posted a $160 million profit decline as the mortgage rate spike killed the spring selling season. Florida’s middle class is leaving Orlando and Tampa for Greenville and Knoxville. Seventy percent of home builders cannot price homes with confidence. These are not variations of the same uncertain market. They are opposite stories happening simultaneously. The difference between them is not the Iran war. The segments gaining ground are gaining it because the demand underneath them exists independent of interest rates, geopolitical noise, or consumer confidence. Data centers, defense infrastructure, energy resilience, water. The segments losing ground were always running on demand that required perfect conditions to sustain. The war didn’t break them. It made the borrowed demand visible. The diagnostic question worth asking before your next strategy conversation is if the conditions that filled your pipeline over the last three years disappeared tomorrow, how much of your backlog would still be there? #Construction #AEC #ConstructionStrategy #MarketIntelligence

I often hear contractors say that they do “quality” work. When I ask what that means, most struggle to clearly define it. Trying to claim that your quality is a differentiator, is a bit of a stretch if you can’t define it. I was with a large company last month that had an entire department around quality. When you looked at what they really did was catch problems after they happened, triggered a lot of rework and caused a lot of heartache.

Who are three people that you follow on LinkedIn that you would like to meet live and enjoy a 🍺 with?

Labor is a limited resource. You have a limited number of manhours to sell Gross profit $ per manhour is a great metric to track and trend Gross profit $ per field labor dollar is another way to look at it Use those two metrics as another way to evaluate your your margin on bid day Use those two metrics to track individual project performance Use those two metrics to look at your portfolio of completed work year to date If you watch these metrics over time, you will learn a lot about your business You might even come to the conclusion that it is smart to subcontract some scopes or pieces of work that are low gross margin per man hour for you. You can use your labor on work with a higher gross margin per hour.