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Making the construction process and the numbers work for existing homes when a contractor is used to new can be brutal. But Phil Hughes, Simonini’s vice president of construction, believes the company can do it. Since hiring veteran remodeler Bob Pugh as manager of renovation and additions, the division has grown to $2.2 million in annual sales, a staff of 12 lead carpenters, and an all-repeat-and-referral client base that includes customers whose homes Simonini didn’t build. The big question is: Is that success sustainable? Hughes says the answer is yes because of the company’s total quality management systems and philosophy.
Founded in 1973 by a single owner, Simonini Builders became a partnership in 1994 when Alan C. Simonini and Ray A. Killian Jr. acquired the company from Al Simonini. Taking the 1994 book Built to Last: Successful Habits of Visionary Companies to heart, the new owners set out to transform a family business into “a true business with annual strategic plans, goals and objectives.”
For new construction, that meant developing a written mission, vision and values statement. Screening potential hires through personality testing, drug testing and background checks. Presenting an annual business and strategy plan at a yearly company meeting. Holding weekly staff and construction meetings. Inviting vendors to present to the team at those meetings. Developing a road map of the construction process as well as a detailed, 250-page manual to make sure clients have realistic expectations.
To translate those processes to remodeling, the Simonini team developed a plan. The first step was hiring Pugh to give the division full-time attention. In keeping with Simonini’s mission of providing outstanding customer service and building trust-based client relationships, Pugh then instituted a lead carpenter system to replace the site supervisor and subcontractor method used on the company’s new homes. Working with the human-resources department of a bigger builder nearby to test top talent, he grew the number of staff carpenters along with the volume.
After taking jobs ranging from $15,000 to $150,000, Pugh and Hughes have realized they make more profit on the high-end jobs and are working toward a bottom cutoff of $100,000. Adding an estimator solely for remodeling is next on the list.
Hughes is confident the company can sustain a $4 million volume on current staffing. “You have to have big, hairy, audacious goals,” he says. “We have great systems that keep us out of trouble.” To achieve those goals, he and Pugh have a new plan: enhancing production efficiency. The first step is to improve scheduling, so they are training the lead carpenters in Microsoft Project. Constant performance tracking and planning for improvement have been pillars of the new home division and will remain so for the remodeling division. “We’re still in the infancy stage,” says Hughes. “We’re not even walking; we’re crawling.
If you have questions about how to get started with quality management, call the NAHB Research Center’s ToolBase Hotline at 800/898-2842 or e-mail [email protected].
To find out more about how Simonini Builders implemented quality management processes in its remodeling division, register for Professional Remodeler’s first Benchmark conference, Oct. 11-13 in Boston, by calling Susan Beck at 630/288-8494 e-mailing [email protected] or downloading a form from www.HousingZone.com/benchmark. Bob Pugh and Phil Hughes will deliver the seminar Incorporating Metrics Into the Planning Process.