Measuring Production & Benchmarking RIA Strictly Contents Convention

Today How to Measure Contents Cleaning Production How to use Production Metrics in your Contents Business How Benchmarking with Improve your results

Super Important Thing to Do….. Use accounting software Use job process tracking software

How to Measure Contents Cleaning Production What needs to be Measured?

What needs to be Measured? Labor

What needs to be Measured? Ancillaries

What needs to be Measured? Vendors

How do You Measured Production Labor Pack out Hand Cleaning Mechanical Cleaning Storage/Warehouse Pack Back

Labor Formulas Tracking Time cards Software Administration

Labor Basics How many boxes can you pack out in one hour? Not all boxes are equal…..

Labor Basics How many boxes can you hand clean in one hour? What is the density of the box and the contaminant

Labor Basics How many boxes can you mechanically clean in one hour? What is the density of the box and the contaminant

Labor Basics How many hours does it take to store the contents and manipulate the items in your warehouse? Is this lost cost?

Labor On-site Clean No mechanical Hand cleaning takes longer More pressure- customer eyes More personal less robot

Labor Labor Plus Burden All payroll expense and insurance included Take your cleaning wage X 2 $12- $24 with burden

Labor On a 50 Box Job Boxes / hour per box (Labor)= Hours Hours X Wage plus Burden= Job cost 50/4 =12.5 12.5 X $24 = $300

How do You Measured Production Ancillaries Boxes Packing material Trip Charges Inspections Storage

Ancillaries Boxes Average price to Supply $5.50 Average price to purchase $1.25 How they effect the downstream production

Ancillaries Packing Material Protective Cost Protection against breakage Cost of doing business Usually tracked on the case

Ancillaries Trip Charges Unplanned Expense Reasons why? Forgot items High touch policyholders Customer requests

Ancillaries Inspections In warehouse viewing Finding much needed items before full delivery Scoping & Estimates

Ancillaries Storage Measuring the cost of your storage Vaults Square footage Rack space Temporary storage

Ancillaries How do you track ancillaries Warehouse Shop All expenses are inventoried and allocated by job number or name Bulk purchasing Supply Chain Management Warehouse supervisor

Ancillaries How do you track ancillaries Purchase for each job Each project get a basic package of supplies no matter the size or scope Additional items are added against the project

Ancillaries How do you track ancillaries Labor outside of the general cleaning and Moving Track additional trip labor and inspection time. View trends and allocate as needed Most likely done after estimate and billing is processed

Ancillaries How do you track ancillaries Inspection and Scoping How many jobs do you scope? How many jobs do you get? Who follows up What is the goal?

Ancillaries How do you track ancillaries Storage Did you charge storage How did you calculate the space What is the current cost of your space

Ancillaries On a 50 (1 X 1) Box Job Boxes= 5.50 X 2 X 50 = $ 550 3 Trips= $75 per trip = $ 225 Scoping and Estimate = $ 0 Storage 50 X 1 sq. X $1.43 = $71.50 $ 864.50

How do You Measured Production Vendor Services Movers Refinishing Specialty

Vendor Services “Do what you do best and sub out the rest”

Vendor Services What information do you need to know before you sub out? What can I charge How do I charge Are they insured What is the expectation

Vendor Services Work you might sub out Piano moving & restoration Furniture restoration Specialty or Niche Services Textiles Electronics Art

Vendor Services How do I track my production when I subcontract? Invoices When will the items be restored How will they be delivered Who bills?

Vendor Services How do I track my production when I subcontract? Invoices When will the items be restored How will they be delivered

Vendor Services How do I track my production when I subcontract? What is your plan for profit margin 10/10 More…..

Production Metrics in your Contents Business “What gets measured gets done”

Production Metrics in your Contents Business Once you know your numbers, you measure against the trend. Your team can clean 5 boxes a hour, you have a 50 boxes, the job should take 10 hours.

Production Metrics in your Contents Business Every job that comes in is 50 boxes and each job takes you 15 hours. Do you add labor or remove? You are cleaning at 3.3 boxes a hour

Production Metrics in your Contents Business Law of diminishing returns. Adding labor doesn’t always a create a positive result

Production Metrics in your Contents Business Review of process Moving work stations Reducing steps Using more mechanical cleaning Staging at the warehouse Pack out coordination

Production Metrics in your Contents Business Review of Expenses Ancillary expenses How many boxes did you purchase? Can you buy solvent in 55 gallon drums Do you need another vehicle What is the profit margin per silo Sub more out

Production Metrics in your Contents Business Track over time 1st month, collect data 2nd month, look for leakage 3rd month, monitor trend and record 4th month, implement change 5th month, review results 6th month, implement change

Production Metrics in your Contents Business A 10% correction on a $100K business creates, $10K. A 10% correction on a $1 million dollar business creates $100K Controlling lost cost impacts your bottom line

How Benchmarking will Improve your results I wish I had a clone of Ross, he is the greatest worker I have.

Benchmarking will Improve your results Benchmarking can create similar results across employees and work stations Benchmark a positive result, and hold employees accountable to the benchmark Benchmark a low standard to set the level to improve, nothing below this mark is acceptable

Benchmarking will Improve your results Labor Boxes cleaned per hour If you clean 4 boxes hour at a wage and burden rate of $24, with an average job of 50 boxes, 1 job a week over the course of a year. 52 X 50 X(50/4)X24 52 jobs 2,600 boxes 650 hours total, 12.5 per job $15,600 total payroll labor, $6 Dollars a box to clean

Benchmarking will Improve your results Labor Boxes cleaned per hour If you clean boxes at 6 an hour at a wage and burden rate of $24, and average job of 50 boxes over 1 job a week. 52 X 50 X(50/6)X24 52 jobs 2,600 boxes 8.3 hours per job $10,358 total payroll labor, almost $4 a box. Saving $5000

Benchmarking will Improve your results Ancillaries Make sure you bill. Benchmark the average ancillaries per job, per month Trend your trip charges and pre bill Storage- find a correct metric that represents your true cost Scope and Inspection fees, track your estimate verse job approval Purchased 100 boxes, billed 61 boxes, only have 5 boxes in inventory “used boxes as placemat at home for entry way” Mover used the boxes to protect the furniture in the cube van Limit your lost costs

Benchmarking will Improve your results Vendors Have more than 1 Compare the pricing and service Do not put all your eggs in one basket Hold them accountable to a benchmark Communicate your expectations

Final Thought Measuring production makes you review your process and employees Any improvement is immediately rewarded Allows for growth Improves decision making

Final Thought Using the metrics to run your business Will create positive habits Greater accountability Improved financial results

Final Thought Benchmarking Sets the standard Allows you to constantly raise the bar Focus’s your time and energy Allows for your to work on your business, not in it.

Thank You