Interview with Vince Gervasi

Vince is the Director of Truss Operations for American Prestige Builders Supply in Winter Haven, Florida. Vince began his career in the building component industry building trusses and wall panels in the shop. He has worked as a production manager, designer, sales rep, sales manager, general manager, and VP. I’ve known Vince for about 25 years, beginning when we worked side-by-side at the old Scotty’s truss plant in Winter Haven.

Reflections on Sales

GI: When you first made the transition from design to sales, what was your initial strategy for being successful in that role?

VG: Knowing that most sales reps in my market were lumber sales reps, I wanted to utilize and leverage my technical knowledge by providing an added value to the builder and framer. Offering to ‘value engineer’ the truss portion of the project before the prints were finalized was one way I was able to do that.

GI: Can you be more specific about what “value engineering” means in this context?

VG: For production builders, it means offering to work with them prior to the finalization of the plans in order to make the framing package as cost-effective as possible. This might include suggesting a post to reduce the plies of a girder. A solid beam that will present a challenge for A/C or electrical trades might be replaced by a flat girder. If the trusses can all be run in the same direction, girders can be eliminated. Simple things, like suggesting that a 26’ 2” span be made a 26’ span to save material, can help the builder save costs. Working with one builder, we realized that by lowering the pitch from 6/12 to 5.87 we would save 2’ of material on every top chord with no appreciable change in the overall look of the house.

GI: How does ‘product knowledge’ rate in terms of importance to the success of a sales rep in our industry?

VG: It can be a very effective weapon contributing to the success of a sales rep. On the other hand, it isn’t an absolute necessity to achieve sales success. Many very successful sales reps know next to nothing about trusses and prefer to keep it that way. The less they know, the less likely they will get tied up with a customer or a framer answering technical questions. For sales reps with little to no understanding of trusses, we compensate by providing them with technical support through either our design staff or a manager. As a manager, I actually prefer this arrangement. Building more relationships with the builder and framer strengthens the overall company relationship with a customer. This will be important should a sales rep leave to go to work for the competition. If he or she is the only relationship the company has with that customer, the likelihood of retaining that customer’s business is slim. With multiple relationships, the company is in a stronger position to retain customers should a sales rep leave.

GI: You were at one time a truss sales manager for a company that had several lumber yards. Were you successful in working with ‘full-line’ building supply sales reps and helping them sell trusses?

VG: The results were mixed. In most cases we were able to leverage the existing relationship into truss sales, but there were some sales reps that simply could not get past the fear of the technical nature of trusses. We sometimes found our customers were discovering for the first time that we even offered trusses; this was after we had been selling them lumber for years! Although the sales rep’s ‘relationship’ isn’t nearly as important today as it was during better market conditions, it can still play an important part in customer’s decision making process.

GI: Any conclusions based on those experiences?

VG: I believe it is most effective for the company to utilize full service sales reps rather than having multiple sales reps calling on the same customer. If technical assistance is needed, a technically savvy support person can help fill that void on an ‘as needed’ basis.

People

GI: You’ve run your own company, hired sales reps and designers. What qualities do you look for in each?

VG: As managers, we all want the ‘whole package’ if possible, but we rarely find people like that. A designer with people skills (in addition to his or her technical skills) can be of great value to the company. Customers can get just as attached to a quality designer with people skills as they can to their sales rep, and more importantly, they can be just as loyal. With respect to the qualities I look for in a sales rep, I have found that a highly competitive person with a need to excel is probably the most important trait. These past three years we have discovered which of our sales reps were great ‘maintainers’ and which sales reps had the ability to hunt and capture new business. There were fewer hunters than we thought.

Business Basics

GI: Beyond sales, what are the basics, the “blocking and tackling,” that a component manufacturer must do?

VG: Know your costs. I think it is imperative to have an accurate estimate of what your labor and overhead will be on each project that you bid. That’s not always the case with all suppliers and I think that’s why purchasing agents see such a large variation in prices from one supplier to another. It’s easy to get your material costs once you’ve run the job but I’m not sure if all suppliers have a handle on what their labor and overhead will be. Even if your monthly bottom line is acceptable, that doesn’t necessarily mean you did well on every order that month.

I am also a big proponent of a performance-based incentive program for the shop. It’s amazing how much more efficient people can be when they can easily calculate how it will benefit them.

An effective scheduling system is important because it helps to insure that all delivery requests are met or are at least addressed well in advance to prevent any unpleasant surprises for your customer. Miscommunication of the delivery can be a real reputation-damaging event.

Lastly, I would say responding to problems promptly can go a long way in making a positive impression.

Interview with Casey Carey

Many of you already know Casey, or know of him. He is a 30-year veteran of the component industry who lives in Indiana. I became acquainted with him listening to him speak on wall panel production at a BCMC Show. Later, while working for MiTek in St. Louis, I was able to visit him while he was Operations Manager for the Stock Building Supply plant in Franklin, IN. Casey is currently a consultant for RevisionLLC. I consider Casey to be one of the best critical thinkers in our industry. He graciously agreed to an interview for this newsletter. Here are some of the highlights of that interview.

Core Strategy for Production Management

GI: Is there a particular concept or strategy that you consider critical to effective production management?

CC: I think it is essential to have an accurate scheduling system with measurable benchmarking.

GI: There are a lot of different ways to do scheduling and benchmarking. How do you choose which one to use?

CC: Any method is acceptable, as long as you are constantly working to improve it. You want a create a system that is not going to cost you a lot of time and money to maintain and you need to integrate this system into your manufacturing process. You don’t want a system that is dependent on one person keeping a lot of records. In that type of system, if that person misses a day – nothing is recorded.

GI: Scheduling can be done with 3x5 cards on a board in the production office. Is this an acceptable scheduling system?

CC: Jobs have lots of different characteristics, and a name and a number doesn’t tell you much. If you take the “cards on the board” idea to the next step by making your floor truss jobs blue and your roof truss jobs yellow, well, that’s more at least a little more information. The more sophisticated you want to be, the more characteristics you will want to measure. I want to be able to use those characteristics to learn more about what we do well, and what we don’t do so well. I also like to look at the various stages a job goes through, and create benchmarks for each stage. When we do that, we have a better chance of discovering where our bottleneck is. It’s important when measuring that the reporting be accurate. Without it, you can’t tell if a variation in the data is ‘normal’ or a special case that merits investigation.

Truss production is picking, cutting, manufacturing and packaging. It took me a while to fully realize that when I had finished building the trusses, the product was not ready to ship. A number of steps, such as sheathing gables and getting the paperwork and the hangers together, are all part of the ‘packaging’ process. I also decided it was important to know, for each job, how long the trusses were sitting in my yard before they were shipped.

GI: How did you find that useful?

CC: It begins with the notion that you don’t want to build something and have it sit in the yard where you can’t get paid for it. In measuring “days sitting in the yard,” you may discover how accurate your customer’s scheduling system is. Sometimes it reveals the habits of the sales rep. Did he get it into production before it was needed just so he wouldn’t have to manage it anymore? When I was working with production builders, it was very helpful to have a complete report of what was sitting in the yard, and how long it had been sitting there. If he was hammering me with “When I am I going to get Lot 12?” I could respond with “Why don’t to also take Lot 14? You ordered that two weeks ago and it has been sitting in my yard for a week?!” Measurements like “days in yard” help you determine if you have a system problem or a people problem.

‘Just in Time’ Production

GI: Is a ‘just in time’ production process practical for truss production?

CC: Absolutely.

GI: What about the argument that you need to get a day or two ahead on the saw? In a JIT production system, if your saw goes down, aren’t you at risk of having to shut down altogether?

CC: A lot of people think production is a cutting issue. They give sawyers incentives and overtime that encourage them to get ahead, then the pieces sit in the yard for a day or two. I think you need to eliminate tying up capital like that. There’s also the hidden cost of the extra time the guy who stages material for the tables takes to find the needle in the haystack of cut pieces. The guy at the back end of the saw should know exactly where to take the pieces to, and the guy getting the pieces for the tables should know exactly where they are without hunting around.

Ideally, you have people cross trained so you can put more people where your current constraint is. And if you are measuring things and know your expectancies, you can foresee when you should only be operating one saw or when to move your sawyer to another task. Getting way ahead with the saws is an example of doing ‘a wrong thing right.’ On the other hand, implementing a lean manufacturing process and finding you are running short of pieces for the tables would, in turn, be an example of doing the right thing wrong. Having clarity about what the ‘right’ and ‘wrong’ things is tough, and an ongoing process.

To the point about managing “in case the saw goes down;” how often does that really happen? If it happens fairly often, is it a problem with the equipment or are you just not doing what you should be to maintain it? When I managed a plant, my rule was, “If I can’t get the part in three hours, I’ll buy an extra one and put it on the shelf.” I was confident the cost of those extra parts was cheap insurance compared to the cost of that piece of equipment being down for a day or more.

How much does it cost you when a piece of equipment goes down? What does equipment down time cost you annually? Grappling with these things isn’t easy. If it was, everyone would do it. On the other hand, sometimes people just need a little illumination about the right things to do - and it gets them headed in the right direction. Many times there is already someone in the plant who knows where an improvement could be made, but just doesn’t act on it; in some cases it’s because he is too invested in the current process.

One attitude that is so important within the organization is taking care of your internal customers. If you are the saw department, are you doing everything you can to make sure that your customer, the table guys, have everything they need? Do they know where to get work for the next job? Is it clearly marked? Do they know where it should go on the production line? Treating the next guy in the manufacturing process as your customer and constantly trying to improve the service you provide to him will make your overall process better and better over time.

Business Management

GI: Do you think there are any common misconceptions or blind spots in the industry right now?

CC: I think CM’s are blaming poor bottom lines on the competitiveness in the industry right now, rather than looking for opportunities to become the low cost provider. Think about:

· What was my estimate cost?

· What was my design cost?

· What was my build cost?

· Did I get the job to the site on time?

· What ‘value adds’ am I performing that I don’t have to be doing?

· What ‘value adds’ do I need to do that I’m not doing?

By looking at each of these carefully, we can all find areas where we can lower costs. Also, by really working on safety, it is possible to save thousands of dollars a year on workers comp claims. By making a study of ‘errors and omissions,’ you can eliminate many of them. It wasn’t until I looked hard at my errors, that I realized that most were coming from design. That let to steps to reduce the errors, and lower our costs.

GI: Any thoughts on the effective use of the software tools that are out there?

CC: Scheduling and inventory control software should be used to their fullest capacity.

GI: Why don’t you think people make better use of the software they have?

CC: Two reasons. First, they don’t know how to use them. Second, they are fearful that the software will tell the whole story and they will end up looking bad.

An example of the type of measurement that today’s software has the potential of providing: We figured out there was a fairly high degree of probability that certain plates sizes that were going to be used at a certain locations on our 110’ line, for example we used a lot of 5x5 plates at the peaks and many times the peaks fell in roughly the same place. We put a bunch of those plates in bins at those locations on the table, and then only picked the plates that were “special.” It saved a bunch of time on plate picking. We couldn’t have done that without the software’s help.

With inventory in particular, I’ve seen several things derail implementation. In some cases we just don’t want to do the work it takes to set it up and maintain it. In others, the purchasing people don’t really want to work that closely with manufacturing. I’ve even seen cases where it just comes down to not having everyone on board with the plan. Managing inventory is crucial, and the software can help a lot, but it has to be used in order to help.

Lineal Saws, Auto-jigging, ROI

GI: Lineal saws: are they the future, or simply a nice compliment to a component saw? What about auto-jigging?

CC: If you are talking about replacing a component saw with a lineal saw, be sure to consider the considerable changes that probably will need to be made to the layout of your facility. Lineal saws have several facets, making it hard to make a definitive statement about them. Let’s look at it this way, we want to make greater profits, right? Greater profits come through less inventory, less cost, and more throughput. Lineal saws can help in each of those areas but they need to be thoughtfully implemented with each of those factors in mind. The ROI on lineal saws and auto-jigging is highly dependent on the average quantity per setup your plant runs.

GI: How do you go about analyzing ROI?

CC: When looking at ROI, I like to boil it down to man hours saved vs. how much more (or less) work I am going to get out. I am also mindful of the ‘hidden savings’ that come into play when we can improve accuracy, quality, and safety. For example, if I cut more accurately I’ll probably be able to set up a little faster and produce a product that performs better in the field.

What’s Coming in the Future?

GI: What do you see coming in the future?

CC: I see one guy who does all the design work; trusses, panels, EWP, the whole thing.

GI: A lot of people say they don’t have enough time – we will always need more than one person working on a job to make the delivery on time.

CC: I think we are guilty of not giving our people time to learn new things. Look at BCMC – a lot of owners but very few designers.

GI: What else?

CC: I see CM’s providing more things for the customer, things like rake ladders and stud counts even when we don’t supply wall panels. And I think more plants will be doing wall panels. I also foresee software that ties together all my equipment in the plant with all my business processes.

You can contact Casey Carey at casey1212@att.net.