GPS, Maintenance and Data Management Are Profit Drivers

Implementing different technologies can keep your company profitable by allowing you to see what is happening

GPS, Maintenance and Data Management Are Profit Drivers

A crew from Black Plumbing in Abilene, Texas, work on a job site in town. The company outfits each vehicle with GPS devices to track fuel usage and time on jobs in an effort to boost efficiency. (Photography by Cory Jones)

Every plumbing contractor has down years where small dollars can make or break it. The best way to weather business downturns is to ensure your company is running lean while business is good.

That means implementing programs — like GPS monitoring and routing, digital invoicing and electronic infrastructure, not to mention the oft-touted preventive maintenance.

“The dynamics of doing what we do — the big thing in keeping our costs down — is trying to make everybody work smarter, not harder,” says Darrin Black, president of Black Plumbing in Abilene, Texas. “It’s more of an intentional thought process that they’ve got to be aware of. There are a lot of cost-saving measures to ensure the job is being done efficiently.”

EYE ON THE PRIZE

“GPS is a huge benefit, honestly,” says Justin Moe, CEO and founder of All Ways Drains in Minnesota’s Twin Cities. “I personally think it’s one of the best decisions we’ve ever made.”

Moe says he has had clients claim that a technician billed them for longer than they were at a job. With GPS, simply printing the GPS record clears up that issue quickly. The same could go for the reverse, ensuring that GPS records line up with employees’ time sheets and that they are only using their work vans for work purposes.

All Ways Drains uses Verizon Connect software for fleet management. GPS offers a number of benefits, not all of them apparent on the surface.

“First of all, you can obviously track them, watch their speed, their idle time — and the benefits don’t stop there,” Black says. “The thought process is not to cross paths for the guys going up and down the road all day long.”

Black Plumbing, like most plumbing companies of its size, runs jobs through superintendents, who are in charge of directing individual technicians. This gives those superintendents a lot of potential for cost savings — or wasted time.

The GPS helps to determine the most efficient assignments and routes for technicians.

“There’s a lot of logistical stuff that goes into scheduling jobs,” Black says. “Being that we cover such a large area, if we’re on the north side, then we try to schedule guys to stay on the north side and so on.”

A NECESSARY EVIL

Preventive maintenance may seem paradoxical when it comes to saving money — paying someone by the hour to work on equipment when it seems to be working fine seems like throwing money away. In the long run, it makes equipment last longer, and when properly executed, it will save thousands of dollars by extending the life of your equipment. The cost of ongoing maintenance is a pittance when compared to replacing equipment due to premature failure.

“When a piece of equipment comes in from a job site, it gets serviced. It gets greased, oiled — it gets everything done to it after every use,” Black says. “We don’t drive little trucks. I mean, we’re spending $80,000 to $90,000, so when they come in, we’re maintaining them. The cost-efficiency is obviously: We keep them updated and maintained, and they keep running up and down the road.”

Depending on the size of your shop, where to do maintenance and repairs can be a big influence on the bottom line.

“Regular maintenance needs to be done, just like anything else. It’s always a good idea on any vehicle,” Moe says. “We do have an in-house mechanic — rather than paying mechanic rates at shops, I’m getting by cheaper through having an in-house mechanic.”

All Ways Drains runs between 15 and 20 trucks. The key is having enough work for an in-house technician to fill their time and justify the cost of retaining them, as well as managing resources for a mechanic shop.

DON’T LET DOLLARS FALL THROUGH THE CRACKS

The biggest difficulty in all these cost-savings methods is simply managing all the information, which is where a solid data infrastructure becomes a necessity. Black Plumbing recently began using electronic software to manage invoicing and job estimates and is in the process of choosing a fleet management computer system.

“We can enter everything into the computer system and keep track of our fleet better. We need to — we needed to five years ago. We just haven’t decided on the program that we’re going to go with just yet,” Black says.

Most of a plumbing company’s capital is sunk into inventory, so managing whatever type of parts requisition method effectively can have a huge impact on profits.

Black Plumbing is moving in the direction of stock deliveries to save on downtime, as well as saving money on parts ordering and inventory.

They also have trailers that can carry more parts and supplies for large jobs.

“Going to a job site one time — making a good list of everything we’re going to need for that job and getting it one time — it just alleviates the unnecessary trips to the supply houses,” Black says.

There are a number of methods and technologies to save money on inventory.

Their digital system has been such a cost-saving endeavor that Black’s only regret is that he hasn’t been able to devote more man-hours to utilizing all the software features.

“As busy as we are — knock on wood — I wish we had more time to devote toward having somebody on staff to monitor that and look at it. We don’t have the staff or manpower to monitor that as much as we need to,” he says. “The cost savings, if we did, we’d probably prove to ourselves that it would be worth the manpower — it’s just unrealized cost savings right now.”

A lot of owners don’t like thinking about the minutiae of nickel-and-dime cost savings, but Black points out that those small savings can add up quickly.

“For the most part, when I’m talking about cost-efficiency, we’re at 90% efficiency. But when you’re running 30 trucks, that 10% adds up to be quite a bit,” he says. “Until you get something better-equipped within the system and within your grasp, it’s really going to be hard to ever realize what’s lost until the savings come back after incorporating something.”

PROFIT REQUIRES CHANGE

Underestimating the impact of cost-saving efforts has been the bane of many plumbing companies, and at the end of the day, it’s often a matter of putting in the due diligence on small matters like these.

“We’ve been pretty lucky. Things have gone pretty well, but we’ve worked very hard at it — there is no replacement for hard work,” Moe says. “You have to work at this stuff. And we make mistakes too — all the time — and there’s problems and hiccups.”

To truly optimize cost savings, the only real solution is being proactive.

“A lot of it is continued education, continual communication between me, the guys, superintendents, our staff personnel,” Black says. “Nobody wants change, but we went to the computer system last year. The nice thing is we went through the bumps and bruises, and I think now everybody sees the need.”



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