August 4, 2021
No matter the size of the snow operation you run, we all have waste — costs that rob us of valuable profit and opportunity.
BY MARK BRADLEY
WASTE IS ANY PROCESS that does not add value to your customer. In snow and ice, our customer’s value is simple. They pay us for safe lots, liability protection, snow removal or relocation (in some cases) and accurate billing. Almost everything else is a waste. How we get to their site, how we prep and fuel our trucks, where we pick up salt, how we pay our staff and how we track our vehicles during an event — all these processes are necessary for us, but they don’t provide any value to our customers. Your customers will not pay you more than your competition because you have to drive further for salt. All they want to pay for is a clean, safe and professional-looking property.As we’re busy and stretched for time, many of us stop questioning the problems, and waste, and accept them as the way we do business. Years slip by, and before we know it, we’re surrounded by waste that nobody questions and we fail to seek solutions.
As you begin your preparations for the snow and ice season, question everything. Look at your business and all the time and money spent not serving your customers — then work to eliminate this waste. The process of removing waste is never-ending, but the journey will go a long way to ensuring your success.
Here are just a few examples of waste that eat at snow contractors’ profits and potential rewards.
Equipment downtime
When a machine goes down, a design-build project schedule might slip for a day or two, but there’s no delaying snow and ice control. When your equipment goes down, your costs go up — and fast. You likely need to get the equipment to a dealer, wait in line behind the other 100 contractors needing an urgent repair, and then get the equipment back to the site. In the meantime, you’ve got to move replacement equipment to the site to complete the job, your labour costs are rising as you move equipment around, your staff is working longer and getting more tired and your customers get frustrated.The cheapest repairs are the ones that don’t happen. Issue pre-and post-shift checklists to all operators that include preventive maintenance procedures.
Look beyond the sticker price when you purchase equipment. Instead, buy from dealers with great service departments who carry a large inventory of parts. A few lost days waiting for parts will cost your company much more than you’ll save on the sticker price.
Train your staff on inspections and simple repairs. A small tool and parts kit and a pre-season meeting to show your team how to perform simple maintenance can help them fix minor issues before they start to cost you money.
Equipment utilization
Unused equipment capacity is a big waste for many contractors who do snow in the winter and grounds maintenance in the summer.The right equipment purchase could be doing much more for your business. For example, agricultural tractors aren’t of much use for contractors in the summer. Instead, consider renting equipment for the snow season or buying construction loaders instead of farming tractors. A loader could be used or even rented out during the summer. Construction loaders cost more, but have more power, depreciate less, are more efficient at switching work tools and are more useful in the summer months for a landscape contractor.
Material waste
All you need to calibrate your salters is a scale, a bag or bucket and a watch, and yet most snow and ice contractors don’t make this simple investment in calibrating equipment. Improperly calibrated salters cause massive waste. Applying too much salt increases your material costs, while too little salt causes re-work, customer dissatisfaction and potential liability problems.Before the season hits, calibrate your salters to ensure proper application rates of salt and de-icing materials.
Estimating waste
To price your work profitably, you have to be right on two sides of the same coin. You need precise quantities, and you need accurate prices. If you’re not accurate on both sides of this coin, you’re losing money. Unfortunately, all too often, contractors go to great lengths to estimate quantities accurately, then watch all that accuracy go to waste by pricing those quantities incorrectly.A loader or agricultural tractor, for instance, will have very different costs and prices, depending on who is using it. If Joe’s Landscape bills about 200 hours per year on the equipment while Greentree Landscape bills 1,200 hours per year, it’s highly likely that Greentree’s costs per hour are less than half of Joe’s. Joe may even be a little faster on the machine than Greentree, but if Joe tries to price his loader with Greentree’s charge-out rate, he will be out of money and out of business quickly. For both companies to price work successfully, they must know their cost per hour to run that machine.
- Use online tools to measure site areas (Google Earth, Bing Maps and findlotsize.com are some free examples).
- Visit sites to look for obstacles, problems, historical issues and other slow-downs that don’t show up on overhead pictures.
- Know your costs: especially the hourly costs of your employees (wages, burden, downtime, etc.) and the hourly costs of your equipment (including purchasing, repairs, insurance, fuel, utilization, etc.).
- Know your company: your prices must recover your costs and your overhead and desired profit.
Systems waste
Timely, accurate information ensures we pay our bills, our employees and invoice our customers accurately. However, time spent on these tasks is a waste. It doesn’t add value to the customer. Entering information into our systems is a waste. Mistakes in processing this information are waste.New technologies improve the accuracy and reduce the time (and people-hours) spent managing information — enabling your office to handle more work in less time and with fewer people.
Smartphone time-keeping solutions electronically track employee times and locations and instantly import data into accounting for payroll and/or job-costing. GPS fleet systems track vehicle locations, site service records and even monitor driving habits. One person and a screen can manage route changes, get site service updates and generate instant time and service reports in real-time, without having to disrupt field productivity with phone calls.
Productivity waste
We’ve all been there. It’s the first snow event of the year. Drivers are lost, running behind, looking at maps and site instructions, and trying to figure out their routes in the middle of an event. Mistakes happen.With a long-term focus on reducing the costs of waste, looking not just at the prices of improvement but the costs of not improving, I know you will find running your snow and ice business more simple, rewarding, and ultimately more profitable.
Mark Bradley is CEO of LMN Software, and former CEO of TBG Environmental, both based in Ontario.