Masonry Magazine February 1983 Page. 43
The Masonry Computer Connection
By WILLIAM C. VENERIS
Did you notice that Time magazine's "Man of the Year" was a machine, the computer? Computers are everywhere. Have you wondered if your business needs one? In the Time article, Katherine Davis Fishman, author of "The Computer Establishment," says that computers are tools to help the rich get richer. Should a mason contractor have a computer to stay competitive and keep up with the times?
Those computer salesmen promise eternal bliss, but you know better, right? You've heard stories of computers that never work, or worse, that caused a company to go bankrupt. But, what can a computer really do for you? The answer to this question depends upon the size and type of your masonry business.
Computer systems can be put into two groups. The first are the accounting machines or super-calculators. The second is the management information system. Unfortunately, computer systems don't come with tags that describe to which group they belong. The software determines the type. Software is the set of instructions in the machine which tell the computer to collect the data, compile it, and print the reports.
Systems which produce reports for your accountant, the IRS, and your banker usually fall into the accounting machine category. If, in addition to these reports, the computer produces reports for you and your foremen to use in monitoring job productivity, then the computer is a management information system.
Another test for the type of system is to look at the type of detail available. If productivity is analyzed by brick or block and there is no differentiation between types of work such as arches, soldiers, and piers, then the system falls into the accounting machine group. Productivity analysis on a brick wall is useless unless it reflects the type of work. A good management information system will do just that.
The type of system you need depends upon your business. If you still work the jobs as a foreman, an accounting machine will handle your needs. By working the job every day, you know more about job productivity than any computer can tell you. If you are managing several jobs simultaneously and are looking for a tool which will help you make these jobs more profitable, then you need a management information system.
The decision to buy a system or not depends on the benefits you and your business gain. If you think you need an accounting computer, then you should compare the time it will save your bookkeeper with the cost of the machine. It is also necessary to compare the quality of the financial reports produced by the computer with those prepared manually. This type of system will probably cost between $5,000 and $10,000.
The cost benefit analysis for the management information system is not as straightforward. With such a system, benefits come in many areas such as material job cost savings, assistance in estimating, increased productivity through weekly monitoring, and increased "contract opportunities."
About the Author
Bill Veneris is considered an authority in the field of computers for the masonry industry. His firm-Interactive Management Systems Corp. based in Colorado Springs, Colo. is a software development house specializing in the installation of micro and mini computer systems, many of which have been for first-time users. IMS has been involved with the masonry field for more than seven years and has developed computer programs which analyze production performance, job costs, position on contracts, estimating, and other standard financial applications.
Vendor Payments Can be Better Controlled
Material job cost savings come through better control on vendor payments. The computer should be able to check that the vendor is charging the quoted price and not the current price. Also it should monitor such things as pallet credits and deliveries.
The computer can assist in the estimating process by automatically calculating extensions and crew costs, and comparing estimated production rates with actual rates reported from the field. This comparison process can be the best education possible for your estimator. Also the actual historical production rates will prove invaluable in bidding similar work in the future.
Productivity gains are achieved in several ways. One way is by comparing estimated production rates against the actual rates each week. Variance in production rates can be investigated and adjustments made quickly to increase production. Obviously, the earlier a problem is discovered, the better the opportunity to correct it.
Another area in which production gains can be achieved is monitoring of production ratios such as tender-to-mason ratios, supervisor ratios, and clean-up ratios. Again, by monitoring these ratios constantly, adjustments can be made when needed to help increase overall productivity.
Missed "Contractor Opportunities" Reduced
The closer you monitor job costs, the more likely you are to catch extras which are billable. If your gross profit on the job is 30%, then for each extra dollar of cost you absorb you must do an additional $3.33 of work in order to recover that cost. Missed "contract opportunities" directly affect the profitability of the job. With the computer monitoring job costs, these situations are discovered early enough to negotiate a change order.
Through my experience, I have seen a number of times where dramatic savings were made due to computer cost monitoring systems. During a computer installation for a mason contractor in Colorado, the computer flagged a material overcharge which had been undetected in the manual system.