Suppose a developer calls three modular factory owners on a Monday morning. He needs 100 modules and wants to know who can build them. The first owner pulls up the production schedule and asks, “When will the first foundation be ready?” The second asks, “Is this one building, or is it the first of several?” The third covers the phone and tells the sales manager, “Whatever it takes, don’t let this guy get away.”
If you work in sales, you might enjoy working for that third owner. If you handle payroll, you probably have a few more questions.
I can think of nine attitudes that show up in decisions like this. An owner can hold several at once and, depending on how empty next month’s production schedule looks, change attitudes before lunch. Three lend themselves to steady growth. Three can help a factory grow quickly. The last three can put a good operation in real trouble.
The owners who grow steadily
“What did we make on the last one?” That’s a good question to ask before quoting a repeat customer. The estimate for the last job might show a respectable margin. Then somebody remembers the engineering hours spent revising the stair opening, the Saturday crew that caught up the line, and the two people sent to the site after the set. An owner who brings those costs back to the estimating table can give the customer an honest price the second time around. There’s money to be made in custom work, provided somebody charges for the custom part.
“Ask the people who had to build it.” Imagine a GM telling the owner that the wall crew missed its target three Tuesdays in a row. Before approving overtime, the owner walks down and asks the lead carpenter what happened. Turns out the crew had lumber, tools, and people every Tuesday morning. They needed a final window schedule. Move that decision up a day, and the factory might get three perfectly good Tuesdays back next month for the price of a conversation.
“I want this builder’s next five houses.” This owner thinks about the builder who already has a crane booked for Thursday when a bigger customer calls asking for a favor. It takes some backbone to tell the bigger account that Thursday belongs to somebody else. But the builder who gets his house on time has a good reason to bring the factory his next order. A handful of builders who can confidently put your set dates on their calendars gives a residential plant something solid to grow on.
The owners who can grow quickly
“How much of this can we build again?” Now consider that second owner on the phone. If the developer has three funded phases using the same unit plans, the first building gives engineering, purchasing, and production a chance to work out details they can use on the next two. That changes what the order is worth. Before adding a shift, though, I’d want to know who controls the land, when the sites will be ready, and which phases the customer will actually sign for. A rendering of phase three makes a fine picture for the conference room. It’s a little early to hire against it.
“Who runs this place when I go home?” Picture a second-shift supervisor finding a shower valve in the wrong wall at seven in the evening. Can she hold the unit, check the other bathrooms, and get the correction underway? Or does everybody wait for the owner to call back? Putting another 25 people on the payroll is the easy part of starting a shift. Giving a capable supervisor the training and authority to make that call is what buys the factory another shift’s worth of production.
“Show me where the work backs up.” Some owners are quite willing to spend serious money once they understand what it will buy. If finished walls are already stacked three deep waiting for floor assemblies, a faster wall table deserves a second look. The better investment might be a floor jig, another electrician or a covered loading bay. I’d ask the plant manager one question before signing the purchase order. “Once this is running, how many more completed modules can we ship on Friday?”
The owners who can put a factory in trouble
“We’ve got to keep the line full.” Of the nine attitudes, this one worries me most because it usually starts with good intentions. The owner wants to keep good people working through a slow month. A thin-margin job can make sense if the price covers the added costs and puts something toward overhead. Trouble starts when the customer also wants extended terms. Now the factory buys materials on Monday, pays people on Friday, and waits until the set to collect. Who finances the extra month if the foundations are late?
“We’d sell twice as much if we had twice the space.” Maybe so. Before signing the lease, I’d review the jobs the factory lost last year. How many customers went elsewhere because the plant genuinely ran out of room? How many walked because the quote took six weeks or the delivered price was too high? A second building comes with a second rent payment, and it can arrive long before anyone fixes why those customers walked.
“Tell them they need to work faster.” An owner who gives that answer often enough will eventually hear that production has improved. Six boxes rolled out the door this week. The trouble is, two still need cabinets, and one needs electrical work. Now somebody has to find the right people, tools, and materials and send them out to the yard. The weekly meeting sounds better while each box quietly gets more expensive to finish.
Gary’s Observation
Gary Fleisher, modcoach@gmail.com
If I wanted to understand the person running a modular factory, I’d ask about the last order they turned down. What bothered them about it? Who did they listen to? And did they give the customer another way to get the job built?
My favorite answer to that developer’s Monday morning call would be something like this. “I can commit to the first 20. Bring your site superintendent in on Wednesday, and we’ll work backward from the first set. If those dates hold, let’s talk about the other 80.”
I’d take that owner seriously. He’s given the developer something he can put on a calendar, given his crew a promise they can keep, and left the door wide open for the biggest order his factory has ever earned
