KEEPING A KEEN EYE on Productivity Maryland

Despite the glum economic stories running all over in the media, there are areas of the country that are growing and sectors of the construction industry that are booming. One of these places is the Atlanta metro area and surrounding communities, and Middle Georgia Concrete Constructors has focused its company around taking advantage of this boom by specializing in schools, hospitals, jails and other construction that's needed in areas of population growth. By keeping a keen eye on labor productivity and working hard to meet business goals, the company is experiencing a healthy growth spurt that it hopes will bring a 43 percent increase in annual sales over 2007.

Middle Georgia Concrete Constructors out of Atlanta is owned by Scott Truax and Paul Mandall. Mandall started Middle Georgia in 2002 with a former partner after the pair recognized a need for quality concrete contractors outside the Metro Atlanta area. Middle Georgia came about to fill that need, offering turn-key work for schools, jails, churches and other low-threshold jobs. A year later Mandall's partner wanted to step out of the company, and at the same time previous acquaintance Scott Truax was planning to move back to Atlanta and start up a decorative concrete company. After a cup of coffee and a long talk, Truax decided to buy out Mandall's former partner and eventually open up his decorative company as part of Middle Georgia. In 2004, he did just that and started CSolutions.

The partnership between Mandall and Truax works. Truax has his thumb on the financials within the company while Paul runs the field, scheduling equipment and manpower while managing delivery equipment and superintendents. Other key employees within the company are people Mandall and Truax have worked with in the past, including Jeff Eigenhuis, vice president, and Tim Blankenship, operations manager for CSolutions. Their combined talents and histories in the concrete industry give the team a working relationship not usually seen in companies so young. This has no doubt allowed them to identify growth potential, successfully set goals and achieve them.

Goals for growth

Middle Georgia's growth over the last five years has been impressive, starting out with only 13 employees and growing into a 100-employee outfit that has projected sales of $16.5 million for 2008 — an increase of 43 percent over 2007 sales numbers. Middle Georgia sees a strong year ahead in Atlanta's healthy construction market, starting out the year with a higher backlog than usual. In order to properly take advantage of the market situation and have a handle on its growth, Middle Georgia has identified several avenues to follow to maximize its growth potential.

One goal is to reduce overhead by 4 percent, which Middle Georgia hopes to achieve in part by controlling spending, such as designating one person to order office supplies and utilizing technology that allows project managers to effectively oversee more work. The company also plans to increase volume with roughly the same amount of people in the field, something it thinks it can achieve by going after larger contracts and expanding the types of jobs it will bid, namely taking on some multi-story, cast-in-place projects and going after jobs that will be LEED certified. Truax says if the company can reduce its overhead by 4 percent and reduce its cost of construction by 1.5 percent, he expects to see a savings of $700,000.

Another goal is to increase procedurals, such as banning cell phone calls during company meetings, holding superintendent meetings four times a year and planning out work two weeks ahead of time. "We might not be able to stick to the two-week plan, but at least with planning you have a general idea of what lies ahead," Truax says.

Middle Georgia recently became certified with the Georgia State Board of Workers' Compensation as a drug-free workplace, a step in achieving its goal for no lost time. As a drug-free workplace, Middle Georgia receives a 7.5 percent reduction on its workers' compensation premiums. Middle Georgia also employs an outside safety consultant that makes safety visits and handles safety training. Truax says these steps bring financial savings to the company and make clients more comfortable knowing that their subcontractor has a history of safety. "We have a moral responsibility to send our employees home safe to their families," he adds.

Middle Georgia's final goal is to decrease the cost of construction by 1.5 percent, which it hopes to achieve through maximizing its labor productivity with help from its intricate job costing system.

Perfecting productivity

When it comes to job costing and monitoring labor productivity, Middle Georgia is light years ahead of most companies. Using StarBuilder accounting and job costing software, management at Middle Georgia can track in real time how closely a job is following the production rates projected in its original estimate. "Labor is our biggest risk," Truax explains. "This program reports actual man hour production — man hours per cubic yard or man hours per square foot — so we know daily what a job is working at, and it allows us to identify where we are behind so we can catch up in real time. Other companies I've been with looked at job costing on a monthly basis, but that's too late to do anything about it."

Middle Georgia measures its productivity in man hours, which are based on historical data from within the company and change from job to job. For example, Middle Georgia has different codes for "continuous footing 3 feet wide and smaller" and "continuous footing 3 feet wide and larger" since workers perform these jobs at different rates. Middle Georgia has identified about 50 job costing codes across the company.

Productivity reports are generated daily, and at weekly labor productivity meetings project managers examine production rates to identify where and why jobs are slipping off their estimates. With any job that's tracking behind, crew leaders can target them and work to get them back on track.

Truax says it's not difficult to get everyone in the company to collect data to make the system work since they implemented it early in the company's history and because simply, it's a requirement for someone to keep his or her job. This is a system the company strongly believes in. "Production tracking hit home for us early on when we realized we had missed projections on a job by 50 percent," Truax explains. "We were able to identify there was a problem and had to scale down the job to meet budget. That was a turning point for us, and from then on we knew we needed to keep up with the tracking and focus on it."

Maintaining control

There are some things you can't control, and in the city of Atlanta concrete guys know two of those things are the traffic and the arrival time of your ready-mix trucks. But having control over other areas of a job offers positive benefits. "The more areas you can control, the better you can control your destiny," Paul Mandall says. "If we can control all the facets of our job, we'll have a better quality and more profitable job with a more satisfied customer."

Middle Georgia's focus on turn-key work — supplying all the concrete and materials for a job — allows them to manage all the elements of a concrete project when they're on the job. "For example, if someone else is supplying the steel and it's missing, we can't do our job," Truax explains. "There will be arguments, and people will lose production time and money."

In early 2007, Middle Georgia took another step in maintaining control over its jobs by creating a placing and finishing crew. "The main reason we invested that money was logistics," Mandall explains. "The Atlanta area was so busy we needed to schedule three weeks out to get an outside place and finish crew."

With in-house place and finish crews, Middle Georgia can get its flatwork done when it needs it. And during periods of downtime, the flatwork crews can pick up outside jobs to keep crews busy and money coming in.

Control also comes into play on the decorative side. Truax and CSolutions operations manager Tim Blankenship recently presented a polished concrete floor proposal to the Bibb County Board of Education, which Middle Georgia often works with on new school buildings and additions. Truax and Blankenship explained polished concrete's durability, how it helps attain LEED points and how it reduces maintenance costs by thousands of dollars each year. The school district decided to install polished floors in its future construction efforts, and CSolutions will be helping them write the specifications.

Middle Georgia's forethought in every facet of it's company — from its focus on schools and other population-dependent structures, to maintaining control in its projects and over its labor productivity — has proven beneficial in bringing the company success.