How Plumbers Can Benefit from Lean Principles

Darryl West, area service manager for MacDonald-Miller Facility Solutions, Seattle, recently began seeing his workplace in a new light. For example, where he used to see a cluttered company van, he now sees a loss of company time and money. And where he used to see stockpiles of inventory, he now sees lost cash flow.

Since undergoing a company-wide transformation last year, MacDonald-Miller Facility Solutions has unloaded three tons of inventory from about 100 vans. This has lightened vehicle loads, likely reducing gas usage and maintenance costs, as well as saving technicians time since they can find tools and supplies more quickly.

The company—which manufactures sheet metal and pipe, in addition to offering HVAC, plumbing and electrical services—also orders less inventory in bulk, streamlining their orders to ensure they have just enough product to meet demand. The result is fewer unused products taking up space and better cash flow because company funds aren’t tied up in inventory.

Reducing inventory, organizing workspaces, minimizing waste: These are straightforward concepts that can have a big impact on a small business’s bottom line. For its own transformation, MacDonald-Miller Facility Solutions relied on lean principles which aim to reduce waste thereby improving efficiency.

Decades ago, Toyota used the lean philosophy to create its Toyota Production System, which transformed the way many large manufacturing companies approach their operations. Today, these same principles can be applied to small service companies such as plumbing businesses.

Keep it simple
“By turning over your inventory faster, you improve cash flow, freeing up money that can be used for other aspects of your business,” says Peter DeMarco, who works out of Dayton, N.J. as director of special programs for the International Association of Plumbing and Mechanical Officials (IAPMO).

Small businesses can benefit by working with their vendors to streamline inventory. For example, if you install 15 water heaters a month, don’t purchase 50 at a time. Instead, have your vendor deliver five per week or one per day. By doing so, your business frees up large sums of cash that can be used toward other areas of your business.

Reducing inventory is a major component of lean, but there are several other principles that can help businesses. Brent Tadsen, managing partner, Adaptive Business Solutions LLC, a Chicago-based consultancy that focuses on lean business practices, shares the following tips for identifying waste:

• Defects: Identify the most common problems that bring you back to job sites, and then take steps to prevent the possibility that those problems will occur in the future.
• Overproduction: Don’t overproduce in one area, like working ahead of time on one project, at the expense of another area such as answering service calls.
• Motion: Reduce the frequency of trips between a job site and your vehicle by preparing kits ahead of time that contain the materials required for specific jobs.
• Over processing: Don’t give customers more than they need. For example, don’t use high-end materials for piping if there are more cost-effective materials that are just as functional.
• Transportation: Use GPS devices to ensure you don’t get lost on the way to job sites. Also, try to schedule jobs near each other to prevent zigzagging all over town.
• Waiting: Reduce the odds you’ll wait on customers by calling a day in advance to remind them of appointments. Also, take this opportunity to explain how customers should prepare their spaces for your work to begin.

Lean methodology is about keeping your operations efficient and your workspaces clean and organized. With a little extra planning you can rein in costs, streamline your operations and save valuable time.