Productivity gains, estimating challenges, solar market top discussions at GEF
Industry representatives from contract glazing firms, material suppliers and related industry companies gathered at the Fifth Annual Glazing Executives Forum, Sept. 14, at the Las Vegas Convention Center as part of GlassBuild America: The Glass Window and Door Expo.
"We have more than 150 attendees today, which is just amazing in an economy like this," said Phil James, president, National Glass Association, McLean, Va.
"In these times, it's hard to get away from the office, but [GEF] is growing every year," said Rick Hamlin, executive vice president, national estimating director for Trainor Glass, Alsip, Ill., and GEF chairman.
The GEF agenda included several presentations and eight breakout sessions that provided an opportunity for company officials to discuss top issues in a round-table format.
Jason Baumgarten, principal, FMI Corp., Denver, started the day with a presentation about productivity, explaining how companies can effectively improve productivity, and in turn, profits.
"Unless your company strategy was prepared for the largest recession since the Great Depression, you probably need to look at your strategy again," Baumgarten said. "You're number one strategy should be looking at productivity."
Contract glazing companies can see quick profit gains by increasing productivity, because it is a labor-intensive industry, and a large portion of glazier overhead comes from labor. "In today's economy, you're competing on price. There are lots of opportunities on the productivity side to help you reduce your costs, and in turn, reduce your price."
Baumgarten recommended companies aim to increase productivity by 10 percent, which for most firms can be achieved by addressing the low-hanging fruit. He provided an example of a hypothetical glazing firm with $50 million in annual sales. A 10 percent increase in productivity for a company of this size would reduce labor costs from $20 million to $18 million. "You can double profitability for a lot of companies," he said.
Companies operating in a "reactive mode" have the most need for productivity improvements, Baumgarten said. Some signs of reactive operations include:
- Moving field managers and crews from site to site frequently
- Project managers who are constantly on radio and phone
- Numerous emergencies or last-minute needs from shops or vendors
- Large numbers of small purchases made in the field
- Little or no formalization processes
One of the most effective ways to increase productivity is to improve pre-job planning through pre-job planning meetings with company managers and on-the-job personnel. "If you're not including your foreman or superintendents in your pre-planning meetings, it's like having a huddle in the NFL with the coaches, but no quarterback," he said.
Baumgarten also recommended that glaziers get educated and informed about Building Information Modeling. "From what I'm seeing, BIM is not in the glazing industry with any significance yet, but it will be. In a few years, most projects will use BIM," he said.
About 30 GEF attendees sat in on the Building Integrated Photovoltaic breakout session. While only two attendees had bid a project for BIPV, most expressed interest in the opportunities solar holds for the contract glazing industry. "This is an industry where you can make some money," said Richard Voreis, CEO, Consulting Collaborative, Dallas, and session moderator. "BIPV is starting to gain traction. ... A lot of architects for owner-occupied buildings are using PVs to send a message."
Grid parody--when solar electricity would be cost-equivalent to electricity from other sources--could be achieved as early as 2015, due to reducing solar product prices, and continued increases in utility costs, Voreis said. "In 2010, 60 new thin film [solar] manufacturing facilities were opened, and we're seeing technology improvements almost weekly," he said. "BIPV will skyrocket in this industry, and it's time for us to get educated."
While most attendees were confident about the potential opportunities in solar, they did express concerns. One attendee asked about BIPV installation certification requirements, which don't currently exist, but will likely be coming (See Closer Look). Another attendee questioned whether BIPV is just for the largest contract glazing firms that have sufficient manpower to handle the education and training.
During the well-attended breakout session "Best Practices in Estimating," contract glaziers discussed the increasingly difficult world of estimating. With fewer available jobs, more firms are bidding each job, and price is the determining factor. Almost all attendees reported that they are winning less than 10 percent of the jobs they bid.
Several glaziers said they now are starting to get jobs that were originally given to another company. "We're being asked to go in and clean up," said Gary Fagan, owner, Advanced Glass Systems Inc., Richland Hills, Texas. "However, in some cases, we're facing three or four other companies who are bidding the job to try to take it over."
In job takeovers, firms face additional issues of liability for work already completed, in addition to struggles getting product from the original firm.
Additional breakout sessions included Software and Front Office Tools, Managing Labor Productivity Costs, Thermal Performance and Codes, Retrofitting and Your Business, Material Damage on Construction Sites, and Contracts and Legal Issues.