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How Smart Use of Takeoffs Can Reduce Product Shortage, Price Hike Pains

Calculate the waste here. (Mark LaLiberte photo)

By Craig Webb

Scott Sedam likes to show a picture of leftover studs and panels he spotted at a housing development a few years ago. The dollars represented by that pile used to be no big deal to most builders, even if it made a lean construction expert like Sedam grumble. Today, given how much higher lumber prices are compared with when Sedam’s picture was taken, everyone would acknowledge it’s an expensive error.

“If this is all you do, do this: After the first three times you build that home, do a takeoff check,” Sedam said during a recent video on how to reduce materials costs. “Then check again once every quarter.”

Sedam’s comments represent a rare instance in which material takeoffs were mentioned as a way to lessen the sting of today’s product availability and price woes. But his was an after-the-fact example. There are many other ways in which a good building material dealer can employ its takeoff service to help a customer reduce waste and trim costs long before it arrives at the job site. Some of those ways take advantage of the dealer’s knowledge of value engineering and construction best practices. Some seek to customize the takeoff service to match the customer’s particular needs. And others focus on improving internal service issues, such as by spotting inconsistencies among a dealer’s various takeoff providers.

More From Less

It’s common for takeoff managers to create a list that calls for 8% to 12% more lumber than the design suggests the house needs. This is typically because framers can be sloppy (grabbing a nearby 12-footer and cutting it to 8 feet rather than looking for the right-sized stud, for instance), wasteful (loading a window frame with studs, as in Mark Laliberte’s photo above), and untutored in engineering loads (installing a glulam board into a spot that requires only a 2x4, for instance). Then there’s job-site theft, a problem that has worsened as wood prices rise.

A smarter takeoff process offers a lot of ways to address those issues. Start with the fact that the person doing the material takeoff for a single-family detached home often is the first outsider who will think about how the home could be framed. The takeoff manager also has the benefit of looking at multiple material lists. This creates opportunities to suggest ways to save.

For instance, a dealer’s takeoff expert might compare differences between a builder’s framing crews regarding how much material each used and how much each crew returned. Thanks to the dealer, a builder can spot the parsimonious framers, investigate what they’re doing, make their practices standard, and ultimately reduce the amount of lumber needed on future projects by several percentage points.

Here’s another example: The takeoff handler might notice that the supplier had gotten a deal on 14-foot boards while a client needed a lot of 2-foot-long rafter pieces. In that case, the takeoff handler might put 14-footers on the list rather than the usual 8-footers that would go into the rafter, thus boosting the dealer’s profit while cutting the builder’s costs.

The order in which the goods are delivered can help too. The Paradigm Estimate takeoff service can automatically organize what’s in the proposed deliveries according to when those materials are needed. This customization reduces the likelihood of theft, because what’s brought gets put into the house right away. Planning the deliveries also cuts the odds that particular lengths needed late in the project will get grabbed earlier and used in the wrong place.

Consistent Estimating

Production builders also should consider the takeoff services when they compare construction costs. The fact that a house costs more to build in Cheboygan than in Des Moines might not be because of labor rates or product prices, but rather because the takeoff created by the dealer in Michigan assumes a more wasteful construction style than what the dealer in Iowa produced. Having a single company handle the takeoffs for all projects in all regions can lead to higher standards and more consistency.

“Our rules engine allows customers to standardize the way they estimate, providing a more consistent take off each time,” said Mohammad Zagnoon, director of operations for Paradigm Estimate. “We’ve seen customers dramatically increase their win rates as a result.”

Webb Analytics’ Construction Supply 150 list of America’s biggest dealers, released in late April, found that 47.2% of the dealers responding to a question about takeoff duties said that their sales rep did the work. Another 34.8% said that someone else on staff typically handled takeoffs, while 18% primarily used outside sources.

Assigning the job to an outside sales rep is a tradition that’s having trouble holding up against two opposing trends. The first is that houses are becoming ever more complicated to build, so it makes increasing sense to take your time and plan carefully. The second is that OSRs are under ever-increasing pressure to keep customers informed about prices and products, so when they do sit down for a takeoff they’re likely to have to do it quickly. Going to an outside service helps give the takeoff process the time and expertise it deserves.

Adding Value

In past years, what’s been mentioned above often would be enough to prove the value of a good takeoff. But now that we’re in an age where every additional stud hurts the wallet and every missing panel can halt a project, a good takeoff partner can be instrumental to a builder’s success

Value engineering has been promoted for years but, until recently, has rarely gotten a glance from builders. Good materials takeoff providers are steeped in concepts like two-stud corners, 24-inch spacing, and single top plate construction. They also can spot places in designs that call for odd lengths, such as an opening that’s 8-foot, 2-inches wide when an 8-foot space would make just as much sense. APA-the Engineered Wood Association says advanced framing can reduce the cost of floor and wall framing materials by as much as 30%, and reduce the labor burden, too.

“We’re hearing more about value engineering [from customers],” said Caleb Gieseke, an operations manager for Paradigm Estimate. “You break the building apart and see how you can value engineer it bit by bit, breaking out your ship packs so there’s more versatility, and providing guidance on where to cut materials to reduce waste. Our header optimization, for example, helps customers to get up to 97% usage out of their boards.”

Builders seeking to save on labor as well as materials should also ask during the takeoff process about opportunities for pre-cut framing. One report of a house-to-house comparison at a development in Colorado performed by Mark Laliberte found that homes built using Builders FirstSource’s Ready-Frame process needed 20% fewer days to complete, and the Ready-Frame houses had just one dumpster of waste left over instead of the usual three. BFS has garnered most of the publicity in this regard recently, but other dealers offer similar services.

Takeoff teams also can help builders judge whether they should consider using wall panels and floor trusses. Surveys by the Home Innovation Research Labs found that 8% of walls installed in single-family detached homes in 2020 were factory-built wall panels, up from 5% the year before. That number should keep growing, as 16% of the builders in the 2020 survey said they plan to use wall panels sometime in the next five years.

Return to Sender

Finally, consider returns. Dealers prefer to oversell because fill-in deliveries are expensive and customers get tetchy if there’s not enough product (even when it’s their fault because they changed the design on the fly). That said, dealers would prefer the excess be as low as possible, because what gets brought back typically is dingier, wetter, and ultimately less valuable. Given a choice between selling only what’s needed rather than having to take back 10% of the original framing pack, dealers overwhelmingly would choose the former.

That’s why Sedam’s suggestion also is good. Builders and suppliers both evolve, sometimes in ways that turn what used to be a necessary surplus of materials into a pile of lumber that’s twice as big as it once had to be. Alert builders and takeoff providers, working together to track material use, can spot the change and potentially create takeoffs that save both dollars and materials.

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