February 2014 Newsletter

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The pundits have called it: 2014 Will Be Good.

With high expectations for a hike in the GDP, building starts, and shale oil to keep killing it, the technology sector has swallowed the ‘optimistic pill’ for 2014 as well. And with good reason. Technology has finally set its sight on the Construction Industry with game-changing visions and developments. In this issue, the LAI newsletter will give you snapshots of Industry forecasts and eye-popping technology.


WOC Opens with Optimism

One of the Construction industry’s biggest events every year, the World of Concrete, dominated Las Vegas last month.

ENR contributor, Tony Illia, was there to report on the market experts’ predictions. Portland Cement Association (PCA) Chief Economist, Ed Sullivan, forecasted an 8.1% year-over-year gain– with 86 million metric tons of concrete expected to be consumed!

Illia quotes Sullivan, “It has [sic] some time since you could be this optimistic,” says Sullivan. “The underlying fundamentals are all in place. There is a tremendous amount of pent-up demand from deferred projects and spending.”

Sullivan predicts record growth for the ENTIRE construction industry, with residential sector delivering 30-40% of the growth. He opined that commercial and infrastructure will also see the benefits from improved state finances and public sector recoveries.

Illia concludes, “Portland cement consumption is expected to climb year-over-year with 9.7% and 10.8% gains in 2015 and 2016, respectively. An estimated 119 million metric tons will be consumed by 2018 or 3% less than the past cyclical peak in 2005.”

We want that news in concrete!

Going to NAHB’s International Builders Show in Vegas on February 4-6th? Visit Ed Ledgerwood at the BuilderMT Booth C2259 and Tony Merry in Sage Booth C2256. They’re both in the Central Hall, near the “Next Build” area.

 


The Future of Construction: Augmented Reality and 3D Printingconstruction-robot-with-beam

For an industry considered a ‘laggard’ in technology adoption, there sure has been some serious buzz about recent developments in technology lately, that may change the entire playing field for construction.

Google Glass and Others Will Disrupt the AEC Industry with Augmented Reality

Soon, (if not already), you’ll be hearing about ‘augmented reality’ (AR) on the jobsite. (Simply put, AR is the term for overlaying data on a real-world scene.)

Building Design + Construction published an article with the photo below, from Bentley, showing how an example of AR on a tablet. The article follows an Australian architect, Rana Abboud, who is an advocate for the potential of AR in the design and construction industries. BD+C asserts, “Abboud says that by superimposing computer-generated images, such as BIM files, over a real-world view of a construction site, AEC firms can greatly improve design visualization, the construction process, and even building maintenance and operations.”

Imagine seeing blueprints, takeoffs or BIM images in the design phase? It’s a construction developer’s selling tool. Even better, it’s a closing tool!

Now think about the Project Manager on the site, and he encounters a change in scope due to weather, and he videos the scene, taps his Google Glass and sends it back to the front for a Change Order approval. Within minutes, he may have the green light to proceed with needed changes!

Visualize the potential for a Safety/Compliance Inspector, a Maintenance Manager, an EPCM! The potential is ludicrously beneficial for bottom line efficiencies and top line profits, no doubt.


6 Million Workers…Why is There a Labor Shortage?

Over the last few years, most constructions companies have battling the effects of the Recession. The biggest tactic construction firms have used to continue to survive in the tough economy of late has been to downsize their business. Over time, right-sizing company staff and equipment numbers has brought balance sheets back to black.

There is an indicator of up-turn in the construction segment due to the reported employment figures of about six million construction workers. Although it is a great measure of increased construction activity, it is not nearly enough to supply the demand for workers. Labor shortages will critically slow down projects when crews jump projects for better wages. The Associated General Contractors of America has published a number of reports and articles about the shortages.

So how are construction companies dealing with this labor shortage? Many businesses are turning to software and equipment investment rather that ramping up head count. Smart firms are working towards automating job site and back office processes to accomplish more tasks with less staff. In fact, the Equipment Leasing & Finance Foundation released reports suggesting a growth equipment and software investment of over 3 percent in 2014.

Smaller equipment production (ie., compact excavators) are directly affected by the housing market conditions. Predictions for 2014 show foreclosures at lowest in nearly half a decade and new starts beginning to increase with an optimistic projection of over a million units this year. Here is a great article on current trends in equipment acquisition if you are interested.

LAI has published several articles on how investing in software can save you time and money in the long run. Here are a few examples:

Now that you have battled the effects of the Recession, what are you doing to get ready for the 2014 construction boom?

 


The best way to be prepared for new business? Finding and learning the software solution that’s right for YOU!

 


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Estimating for the Construction Boom

Many contractors cut back significantly when business slowed down, which may have had a profound effect on their labor costs, production rates and overhead structure and may have caused a change in the markups used in estimating.

What happens when things start to boom?

You may experience a sudden increase in business, and start to scramble to find workers and managers. You may have to add overhead to support the increased volume. There have been significant labor shortages recently – will you have to pay more in wages and benefits than in the past to find qualified workers?

Contractors must carefully consider their labor and overhead structure and consider revising their production rates and overhead markup when pricing work that will be done during the boom times. Keep an eye on your materials costs and know that a boom can cause shortages and upward price pressure. This will help keep you profitable and competitive going forward.

More about Sage 100 Contractor here. Call Ledgerwood Associates, 1-877-918-8301 today and we’ll match your needs to the best solution.

Submitted by Walt Mathieson, walt@mathiesonconsulting.com, Ledgerwood Sage 100 Consultant

 

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File in Use

A cry of exasperation is the typical response to a “file in use” message. No matter how many emails you send to let your users know that you need them to log out of the Sage 300 CRE system, it always looks like someone left something open. You’ll see this message when you try to run a ‘Close Month’ or ‘Close Period’ task in a module, move master file data or transactions from one file or folder to another, or run any process that requires exclusive use of the files that will be affected. You needn’t run around the office to track down the offending culprit, though. A simple tool can help you quickly identify the user.

Sage 300 CRE operates using a Pervasive database engine that comes with a utility called the Pervasive Software Monitor. The monitor allows you to access the server on which the Sage 300 CRE software is installed and see active user sessions and the files that are in use. Follow the steps below to try this out:

Remotely connect to the Pervasive monitor utility on the Sage 300 CRE file server as follows:

  1. From a workstation that has Sage 300 CREinstalled, start the Pervasive monitor utility as follows:
    1. Click Start and then select Run.
    2. In the Open box, type w3monv75, and then click OK.
  2. From the Options menu, select Connect.
  3. Enter the name of the Sage 300 CRE file server, the administrator name, and the administrator password (try your own Windows user ID and password) in the appropriate boxes and then click OK.
  4. From the MicroKernel menu, select Active Sessions. The user IDs will appear on the left and the files being used on the rights. You can scroll through the user IDs to determine which user is accessing the file you require.

WARNING: When viewing Active Sessions, you’ll notice buttons to Delete Current Session or Delete All Sessions. Do not use the Pervasive Software Monitor utility to delete users while anyone is using a Sage 300 CRE application! If you do, their network connection to the Pervasive engine will be lost, which causes damage to the data.

If everyone is indeed logged out and no one is using the file, the file could be locked. In this case, the Delete Current Session or Delete All Sessions button can be used, or the server can be rebooted to release the locked file. If a user session appears to be active, and the user claims to be logged out, have the user completely shut down his or her workstation and refresh the monitor. If the session still appears, it is safe to use the Delete Current Session button for this user.

Submitted by Kyle Zeigler, Sage Certified Consultant

 

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Attributes of Successful Contractors

During the recent economic recession, many construction companies were forced to downsize their operations in order to stay in business. Although the process of downsizing is almost always painful, it does provide management with an extraordinary opportunity to re-evaluate the way they conducted business during boom times and, perhaps, make some changes in preparation for the anticipated economic recovery of 2014 and beyond.

See how your company might benefit from the following attributes of successful contractors:

  1. 100% success is virtually never achieved. High performers always strive for continuous improvement.
  2. Success and profit are related, but not equivalent. Visionary companies are not primarily motivated by maximizing profits. Success is considered to be the natural result of achieving such higher goals as:
    • Quality
    • Consistency over time
    • Superior reputation
    • Development of the individual
  3. Staying true to core company and individual values is an important element in achieving success. Such values include:
    • Safety
    • Integrity
    • Professionalism
    • Contribution to community
  4. Success may be defined by a variety of criteria, including the achievement of:
    • Customer satisfaction
    • Quality workmanship
    • Preferred contractor status
    • High reputation
    • Accomplishment of company mission
    • Employee satisfaction
    • Superior safety record
    • Long-term survival
    • Thriving organizational culture
    • Above-average profits
  5. The criteria for success can be combined into profiles of success.

Visionary companies pursue a cluster of objectives, of which making money is only one – and not necessarily the primary one…yet, paradoxically, the visionary companies make more money than the purely profit-driven comparison companies. —  James C. Collins, “Built to Last”

There are five success profiles for contractors:

  1. Generalist– everything is of high importance. Success is defined by:
    • Survival and sustainability
    • Profit and wealth
    • Progress on mission and preparation for future
    • Sense of presence and reputation
    • Getting work done and done well
    • Improving people’s lives
  2. Tactician– emphasis is on projects and processes. Success is primarily defined by:
    • Getting work done and done well
    • Survival and sustainability
  3. Bottom-liner– emphasis is on financial results. Success is primarily defined by:
    • Profit and wealth
    • Progress on mission and preparation for future
  4. Humanist– emphasis is on customers, employees, and community. Success is primarily defined by:
    • Improving people’s lives
    • Progress on mission and preparation for future
  5. Freewheeler– not overly focused on any specific criteria. Defines success somewhat by:
    • Survival and sustainability
    • Sense of presence and reputation
    • Profit and wealth

Each profile is capable of achieving success; however, the definition of success may vary for each. There are certain keys to achieving success that are common in all profiles:

Activities That Build Success

  • Hire and retain the best and the brightest people
  • Foster teamwork
  • Understand your core competence
  • Measure what matters
  • Have a well-developed company strategy
  • Develop customers by intent, not by accident
  • Develop a strong team of trusted advisors
    • CPA
    • Attorney
    • Banker
    • Insurance agent

Right now you have an exceptional opportunity to “re-invent” your company by considering these attributes and determining how best to apply them to your vision of success. Don’t put it off. Good luck!

 

Submitted by Rick J. Kratz, CPA

Pittman & Murdough CPAs