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For some time now, the “Fabricator Forums” held at trade shows around the country are among the best-attended events in the stone industry. One of the most recent large-scale Fabricator Forums was held at the last StonExpo trade show in Las Vegas, NV, and attendees discussed a wide variety of topics. The panelists at the event included:
• Matt Lansing, Stone Innovations, Plover, WI
• Fred Radtke, Radtke Tile & Marble, Carson City, NV
• Brian Briggs, Granite Guys, Inc., Ft. Pierce, FL
• G.K. Naquin (moderator), Stone Interiors, Loxley, AL
The following is a summary of the topics that were discussed at the event:
Question: Do most people have someone whose job it is to manage inventory, tag materials and keep track of what is coming in and going out?
Radtke: Our company has a full-time material manager. We do 15 to 20 kitchens per week, and it really is a full-time job. It is a mess if you don’t have someone there. In terms of remnants, we keep certain sizes around for powder room vanities. Anything smaller than that goes in the Dumpster.
Lansing: Our shop processes approximately 1,000 square feet of stone per week, and we don’t have a full-time materials manager. We have an inventory numbering system, and the sawyer maintains the inventory sheet. We also track our remnants on Excel. It has been good for us. We offer half-priced vanities with every full kitchen. Anything smaller than 2 x 4 feet goes in the Dumpster.
Briggs: Our shop averages six high-end custom kitchens per week, so a full-time worker is not necessary to manage inventory. We assign numbers to all of our slabs, and the office manager does the tracking. We won’t keep any remnants smaller than 36 x 48 inches.
Naquin: We’ve invested in a bar code inventory system at our company [specializing in high-volume fabrication; with multiple locations]. In terms of waste, we purchased a chipper to help process discarded material. We’ve put over 35,000 square feet of stone in the chipper. It works well. The problem is color consistency. You can’t really sell it, so we have a nice rock garden now - so do our employees.
Question: What percentage of slab material ends up as waste?
Briggs: It really depends on the work. With complex exotics, we’re seeing waste of 30 to 35%. For the cookie-cutter work, it’s more like 5 or 10%.
Radtke: We budget a waste factor of 30% as a variable.
Naquin: One of our locations had a waste factor of 29%, and another was at 32%.
Lansing: We studied three months of work, and we found that we were at 43% waste. That was more than we thought, but it was comparable to other shops that did the same work.
Question: What do you charge your customers when they use only 5 or 10% of a slab?
Briggs: It depends on the type of customer. If it’s one of our contractor clients, we’ll end up eating the cost of the slab because we want future business. But if it’s someone off the street, we charge them for the whole slab.
Radtke: It’s the same basic answer for us. If it’s a one-time client, you’re going to lose you’re business if you [don’t charge for the whole slab].
Lansing: It also depends on the material.
Question: What percentage of mistakes - mis-measurements, miscommunications, etc. - is considered to be acceptable?
Briggs: As a smaller shop, we do not have an acceptable margin of error. Our mistake rate is maybe 5%, but we’d like it to be less than that. We try to do things to minimize mistakes - GPS systems in the trucks; Nextel phones.
Radtke: Mistakes happen, and the best thing to do is fix them as soon as possible. You can’t do it halfway, because it will always come back to bite you. We use a two-man measuring team [to help avoid mistakes]. Also, everybody has a copy of the shop drawings, so if a mistake makes it to the jobsite, everyone is in trouble. We don’t want to have to buy GPS systems to baby our people. If they can’t find their way to the jobsite, we need to hire better people.
Lansing: We have procedures for avoiding and tracking mistakes. We produce full job tickets in AutoCAD. After sawing, they stay with the pieces the entire time. Verbal and written warnings help show people that their jobs may be in jeopardy when mistakes happen.
Naquin: There are no acceptable errors. All mistakes are investigated.
Question: For shops that have stopped working with Home Depot, what were the reasons? What is the benefit of selling retail over working with Home Depot?
Lansing: We had an excellent relationship working with Home Depot, but we got severely underbid on the contract, and it just didn’t make sense to us. We do work with seven or eight different Lowe’s locations now, and they work differently. They use two or three fabricators per store, and they assign jobs based on the customer service scores.
Briggs: I won’t touch Big Box stores.
Radtke: We’ve had some experience in this area, but they were too much in my pocket.
Naquin: We’ve worked with Home Depot and Lowe’s stores, and they can be difficult administratively to deal with. But if you have the staff to do the volume, it can be profitable. The square-foot price includes absolutely nothing. Everyone is attracted to the $44-per-square-foot price, but add-ons like edgework and the sink cut-out are extra. The customer ends up paying $75 per square foot, and we get $52 of that.
Question: How do you handle customers who need to see the slabs at the distributor - even with non-exotic materials?
Lansing: We always strongly encourage it. The customer signs a form that states that they either approve the stone personally, or they are entrusting the company to do it for them.
Briggs: If they don’t like what is directly in our inventory, we have no problem letting the customer go to the distributor to pick out what they want.
Naquin: We import a lot of material directly, but if the customer wants material from the distributor, we let them. There’s a higher price for that, though. We have an “imported price” for material as well as a “distributor price.”
Forum Audience Participant: We do something similar to that. We stock 20 different colors, and if the customer doesn’t like our Venezian Gold, for example, we will send them to a distributor. Then we charge them extra per square foot.
Question: How can I figure out how much material to bring in for a complex job? Some 40-square-foot jobs may require three slabs.
Briggs: There’s really no factor that covers every job. We do the layout for each job, and we drop the pieces in on AutoCAD. If it looks tight, I’ll say to our distributor, “We need two slabs delivered, and one slab on hold.”
Radtke: It also helps in these cases to be friendly with your competitors and suppliers. We might be able to look for a half-slab.
Lansing: We also maintain a good relationship with our suppliers. And with the exotics, we can send the slab back if we don’t need it. We also get exotics on consignment.
Naquin: This is an important point to consider. It used to be that Ubatuba was used for 40% of our jobs. Now it is 20%, and that other 20% has been replaced by exotics.
Question: How many fabricators are using independent contractors for their installations?
Briggs: I tried it, and I will never do it again. We were seeing 15 to 20% call-backs. It just didn’t work for our particular situation.
Radtke: It’s important to remember that your installers are putting your name out there. We get our work via word of mouth, and I have to trust who is out there representing me.
Lansing: We have our own staff for installs, but we also work with some contractors. It might be different for us because we already know these contractors because they had done some fabrication work for us.
Forum Audience Participant: We have used a combination of in-house installers and independent contractors, especially as we grew. It was interesting, because when we brought in contractors, we found out about mistakes being made in the shop because there had to be a dialogue between the fabricators and installers.
Question: How do you pay your installers - by the foot or a regular hourly rate?
Briggs: We pay our installers an hourly rate, and there is a bonus for more significant jobs.
Radtke: We also pay hourly, plus a monthly bonus. If they do something extraordinary, they get a little extra.
Lansing: We pay hourly. We pay a bit more than other shops in the area, and we say so in our [help wanted] ad, so we get better applicants. We have an employee review every six months, and workers are paid on experience.
Naquin: We pay installers a day rate and a bonus for doing an extra second job during the day. In our other shop, we pay by the square foot. There are Federal laws on wages, though. You must track how many hours they’ve worked. This also helps you gauge how efficiently they’re working.
Question: How much material can an installation team install in one day?
Briggs: Typically, our guys are installing one kitchen per day. Sometimes this means they’re back as early as 2 p.m., but sometimes it means they’re out until 8 p.m.
Radtke: It’s the same for us. If we load a job onto an A-frame, our feeling is that it will be installed in a day. We lose the “eight-hour mentality,” especially if there is some driving.
Lansing: With our simpler Big Box work, our crews can do two or even three kitchens per day - if the driving route works out. The average for a team is about 80 square feet per day. All of our crews are two people, and we deliver using box trucks with A-frames. On exceptions, we will send more people.
Naquin: Anything over 100 square feet is considered to be an all-day job. But the complexity of a job is also a factor. If you take a job with high square footage, but a large island, it might be simpler.
Question: We are doing one kitchen per day. Does it make sense to invest in a CNC machine?
Briggs: We’re only doing a bit more than that, and we were actually planning to buy a CNC machine until the Southern Florida market hit a slump.
Radtke: We have three CNCs, a waterjet and other automated equipment, but it’s really hard to estimate what you need. In our case, 40% of our quote is overhead.
Lansing: We have a CNC saw, a CNC router and digital templating systems. When you are considering these purchases, you really have to look at the types of jobs you’re doing, and the shapes you are processing. That is what helped us make our decision.
Question: Are you able to polish all the way through using a CNC machine?
Lansing: We can on some profiles - full bullnose, ogee - but for some of the higher-end custom work, there is more hand polishing and a higher level of quality control.
Forum Audience Participant: A skilled CNC operator should really eliminate the need to hand finish an edge. I’m not going to accept hand finishing if I spent $300,000 on a CNC machine. We offer a triple edge as a standard edge, and in our case, the most time is spent setting up the tools.
Naquin: I agree that it may be possible, but is that the best use of your CNC? Maybe it’s better to have the CNC doing more productive work rather than finishing the edge.
Question: We’re hearing more and more concerns about silicosis in granite fabrication? What are shops doing to deal with this issue?
Briggs: Going to an all-wet shop has been a big factor in avoiding this problem. When you’re working with granite, you really need to train your employees and make them aware of the issue, and help them understand why they absolutely need to wear their masks.
Radtke: Some of our more experienced guys like working dry. We have a “dry room” with a dust collection unit, and we’re undergoing silica inspections. This is a big issue, though. OSHA is circling around us, and they will pounce, so be ready.
Lansing: We are working 99% wet, and we only work dry for some details here and there.
Naquin: We have an all-wet shop, and the guys get suspended or terminated if they are caught working dry.
Question: How are you recruiting employees these days? It seems to be getting very difficult.
Briggs: We have changed the wording of our [help wanted] ad. Just by saying “apprentice” instead of “helper,” we’re getting a better caliber of applicant. We’re getting people with the mindset of wanting to learn a trade. We don’t hire people from other shops because we’ve found that “re-training” a worker is more effort than training a guy who’s doing this for the first time.
Radtke: I agree. We try our best to keep the guys who are good and give them a career package with benefits. Those are the ones that you build your company around.