Housing Giants - August 11, 2008 - (Page 30) f e at u r e “we have cost matrices set up, but we know what we need to sell every house for to get the end results.” – Mike Snider to look closely at their returns on assets and capital. Graham notes it’s critical that builders focus on both their EBIT (earnings before interest and tax) margin and capital turn and to report on and analyze the data on each community separately. Production managers will have to become leaner, and they can only do that through concise, careful and comprehensive analysis of their internal data and indicators. “Our muscles with regard to value engineering have atrophied in the last four or five years. It can be very difficult to suddenly pull back and build real houses for real people,” says Graham. At Dewey Homes, senior vice president of process excellence Glenn Gleason tracks and analyzes 10 to 15 key performance indicators that can mark the pulse of their business. From sales to operations, some of the major measurements include traffic, conversion of traffic to sales, average total sales price, cost per square foot, the variance on purchase orders, cycle time and customer satisfaction. Gleason says that in times such as these, it is especially important for production managers to focus on their variance on purchase orders. “You have your sales performance and your construction performance. Then you look at how well you are doing on a purchasing basis and how you are handling your costs per square foot,” says Gleason. At Epcon Communities, vice president of development and construction Craig Thomas uses a production schedule that each community produces. It highlights the construction of every building with certain milestones (such as pouring a foundation, framing and drywall finishing) and also matches that up with sales activity, such as how many are under 30 HOUSING GIANTS.8.11.08 www.HOUSINGGIANTS.cOm http://www.housingzone.com/giants/article/CA6538948.html http://www.housingzone.com/giants/article/CA6399727.html http://www.housingzone.com/giants/article/CA6399727.html http://www.housingzone.com/article/CA6438784.html?q=key performance indicators http://www.housingzone.com/article/CA6438784.html?q=key performance indicators http://www.housinggiants.com
For optimal viewing of this digital publication, please enable JavaScript and then refresh the page. If you would like to try to load the digital publication without using Flash Player detection, please click here.