Cost Management and Efficiency in Masonry Projects Words: Domenic LivoliWith masonry being a piece count trade, the more units that are laid in the field that surpass the quantity figured in the estimate, the more profit that is made. Masonry crews in the field need a good foreman that is capable of organizing the crew, positioning materials and equipment, watching the crew to make sure they are efficient, and solving problems in the field to allow for continuous, productive work. While the actual work in place is being done in the field, background work needs to be done in the office to enable the field to perform their jobs. There should be systems in place that allow the project team to efficiently build and manage the project.It all starts with a good estimate. Being organized in the estimating department is key to getting an awarded project started off on the right path. After the project is awarded, materials need to be ordered. Contracts and purchase orders for precast, natural stone, brick, CMU (highlighted to clarify as Concrete Masonry Units), and accessories need to be ordered. If the estimator also doubles as a project manager, that person would continue the process. If a dedicated project manager will oversee the project, then estimating would need to hand off the project to project management. Entire sets of documents with all addenda must be assembled, as well as all the quotes received on the project. Keeping all documents organized is key to staying on top of details, clarifications, changes, Requests for Information, and change orders. There are software programs that allow for the creation of projects and management of documents, estimates, and costs.During the estimating process, the estimator must keep good records and be organized in structuring the estimate for later use. If a schedule is known during the bid process, the estimator will know how to sequence the takeoff for later use. Labelling line items as the quantity takeoff is done will allow the estimator to easily create a Schedule of Values as the project is started. Quantities of CMU/brick (highlighted to clarify as Concrete Masonry Units/brick) by floor, by elevation, by elevator, by stairwell, etc., can easily be separated so that costs can be assigned to these items for breakdown in the Schedule of Values. Assembling the schedule is key to recouping startup costs and creating good cash flow as the project gets underway. Areas that will be done first should be given extra value so that mobilization costs and other material deposits do not have to be carried by the contractor for long periods. In other words, if a supplier requires certain materials to be paid for or partially paid before the project begins, you want to try to get those separated individually in the Schedule of Values, so that you can bill for them in the first requisition.The estimate also needs to be broken down by different materials categories. When creating the purchase orders, you want the ability to track different materials on the project in an orderly fashion. Separating total costs on brick, CMU (highlighted to clarify as Concrete Masonry Units), mortar, grout, and other accessories is useful as costs are tracked along the project. If you want to know how much was spent on brick for the entire project, it is useful to have this in the beginning so that costs can be compared along the way and at the end, estimated costs can be compared against total costs. This also helps with analyzing profit margins. If materials are purchased below the costs carried, a projected profit can be anticipated.Breaking the project down into different materials is very useful to the accounting department. They will be paying the bills to the suppliers, so it is imperative for them to have a baseline of how much was spent for certain categories. Accounting will also monitor how the budget is being spent as the project is built and should report any overruns to estimating and the field. The information should be conveyed during the project's construction, not at the end when it would be too late. If any irregularities are found, it’s best to address them immediately, before the issue compounds.While estimating, project management, and accounting play important roles in the management and profitability of the project, it is the labor in the field that can make or break the project. Organization both in managing the labor and tracking costs is vital. Starting with the estimate, man-hour costs, crew sizes, and production rates contribute to establishing a unit price for the item. For example, if the estimator carried a certain crew to lay brick, then the total crew cost for the day can be calculated. From this total, a cost per mason day can be established by dividing the total cost by the number of actual masons laying units. From the mason day cost, a unit cost can be calculated by taking the mason day cost and dividing it by the number of units that were figured to be laid. For example, if the crew cost totals $5,000 for a day and there are 5 masons laying brick, that would equal $1,000 per mason day. If the estimator figured a mason laying 500 brick per day, then that would translate to $2.00 per brick for labor. This strategy can be used for any and all items on the project that need to be installed. It establishes a baseline for tracking costs.In the field, the foreman must keep good records of units being installed daily. Counts should be done at the end of each day, recorded, and sent to the office. Careful records should be kept as to the crew sizes and what tasks were performed during the day. This information is vital. Profit and loss can and should be monitored daily. The foreman needs to track how many masons, laborers, and forklift operators were on the job that day, as well as how many units were installed. If brick and block were laid, then all the different materials should be counted. When the counts and number of workers are reported to the office, then a daily crew cost can be calculated for that day. Now, each different installed quantity can be compared to the estimate. Using the above example, if the daily crew cost came in at $5,000 and 3,000 bricks were laid in that day, then the unit cost of $2.00 per brick labor from the original estimate would be multiplied by 3,000 bricks, giving a total of $6,000. If the crew cost for the day was $5,000, then there is a $1,000 profit for that day. You want to know whether you are making money daily. Conversely, if a few consecutive days go by and there is a daily loss, estimating, project management, and the field need to address and correct the issue before more days pass and more money is lost. Different factors such as slower layout production, out-of-sequence work, incorrect installation of work by other trades, etc., could contribute to not achieving the quantities in the estimate. These costs and counts need to be maintained not only for daily profit and loss but also for historical costs and productivity. Estimating needs to be notified so that they can use these figures in future estimates for similar projects and for assembling a master database.Having solid systems in place to track manpower, productivity, and costs is essential for a masonry contractor. It is essential to get everyone in the company on board with operating, reporting, maintaining, and growing these systems so that the company can function smoothly and maximize their potential in being profitable and delivering the project on time.______About the Author: Domenic Livoli is President of Livoli Estimating Service, specializing in masonry estimating since 1989. To view the services that he offers to mason contractors, visit his website at www.livolimasonryestimatingservice.com. To speak with Domenic regarding his estimating and consulting services, email: livoliestimating@gmail.com or call 508-529-0362.About: Featured
