Source:
ProSales, Todd Drummond
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Vendor promises may not always match the post-purchase reality.

Understanding the do’s and don’ts for component manufacturing (CM) equipment purchasing (wood trusses and wall panels) can save or waste your company hundreds of thousands of dollars at the time of purchase and long after.

Everyone knows the building economy is on fire, so it should come as no surprise that this has a significant impact on equipment and expansion investments for the CM industry. But, as someone who makes a living being a CM operations lean manufacturing guru and has witnessed hundreds of equipment installations and manufacturing setups, I would like to offer you this reminder: the vendor’s promises will not always match the reality of what will happen when/after you make a purchase. Every system and equipment provider has pros and cons. Knowing what is best for your given needs should not be biased toward vendor recommendations that may be based on monetary gain or false understanding of KPI benchmarks.

Labor Shortage
Yes, we all know companies are experiencing a huge problem staffing all the needed areas of their overall businesses. This critical need for skilled and reliable labor drives many decision makers to invest vast sums of money into automation that promises to reduce labor while increasing output. Unfortunately, for both wood truss and wall panel manufacturing, hundreds of thousands of dollars are invested in poorly designed systems and the wrong setup to meet their particular needs. It cannot be emphasized enough that the equipment in vendor’s sales pitch may seem like a very enticing solve-all-your-problems solution, but then may fall far short of your intended goals. Automation may, but is not guaranteed, create a labor savings, but the key is knowing what works as intended and what may be false promises. Some automation equipment is unreliable and is not the best solution for your company’s needs.

Key Performance Indicators (KPIs)
In the wood building industry, the so-called tried and true KPI strategy of using board footage (BF) units is so widely used as a standard benchmark for productivity that too many people will not listen to reason about the inherent flaws of the BF benchmark. Todd Drummond Consulting has accumulated data that proves you can achieve significant gains in BF per man-hour while losing millions in untenable sales and net profits. In other words, some costly equipment systems can significantly increase the BF per person, which is perceived as substantial labor savings per time period, but this is demonstrably a false data point. This nonexistent labor savings gain is not even close or debatable for wood truss manufacturing when looking at the labor cost of manufacturing. Only when one is willing to look beyond using BF units as a productivity KPI will decision-makers genuinely understand how much BF units can be deceiving.

BCMC Trade Show – Purchasing Equipment
If you wait until the Building Components Manufacturing Conference (BCMC) show to purchase equipment, it may be too late to meet your planned needs. There is a comforting feeling from seeing all the equipment vendor displays under one roof. To talk to each of the salespeople, look them in the eye and shake their hand before signing a purchase agreement worth hundreds of thousands of dollars is just how business is done right. However, one needs to keep in mind that 2021 is no ordinary equipment purchase season. There are three equipment sales surges during the year when CM equipment is purchased: during the BCMC trade show, before the end of the year for tax reasons, and sometime during the winter months, when some companies finally have their financing finalized and can purchase the new equipment.

Equipment manufacturing has been affected like everything else in the building industry, with a massive surge in recent sales. Many equipment vendors are already out 12 to 18 months for new orders. Those who wait until the BCMC show should not expect their new equipment installed by the 2022 spring build season.

This is mainly a caution to those planning on expanding their CM portfolio. Many of the equipment vendors are having a challenging time providing new equipment on the schedule many hope to achieve. Waiting until the BCMC show in October may hinder their plans even more so.

Ideal Manufacturing Systems
For many who have been in the industry for decades, many equipment investments look like common sense. They will confirm their idea with their known vendors, with whom they have had a working relationship over many years. There are countless examples where manufacturing productivity has been hindered by many different factors, including multiple elements at the same time. It is typically not simply one thing needed to increase capacity, such as a new saw or automation enhancement to keep up with sales. To design or alter a production facility for optimum output, one needs to have a clear picture of how all the different elements will work together, including all the sales, design, manufacturing, delivery, and admin departments. All the various types of equipment, both automated and non-automated, to achieve maximum output within a manufacturing facility while maintaining proper efficiencies is not as apparent as it may appear to be. There are multiple examples of a vendor’s manufacturing plant layout recommendations that are poorly suited for current and future needs. That is not to say these instances are intentional: it cannot be emphasized enough that we all have blind spots. It should be standard practice to garner expert outside advisement from those who do not receive any referral fees for equipment purchases and have expert lean best-practice operational knowledge. Spending a fraction of the expected equipment investment for unbiased expert advisement typically saves tens of thousands for the equipment investment and hundreds of thousands on increased labor savings and net profit gains.