{"id":104814,"date":"2024-04-15T13:54:04","date_gmt":"2024-04-15T17:54:04","guid":{"rendered":"https:\/\/sjcivil.com\/?p=104814"},"modified":"2024-04-16T12:07:08","modified_gmt":"2024-04-16T16:07:08","slug":"increase-profit-by-rule-of-27","status":"publish","type":"post","link":"https:\/\/sjcivil.com\/increase-profit-by-rule-of-27\/","title":{"rendered":"Increase Profit by Rule of 27"},"content":{"rendered":"<p><strong>Executive Summary<em>.<\/em><\/strong> \u00a0Most decisions can be further analyzed by collaborative or self-inquiry.\u00a0 When looking for ways to decrease costs, ask yourself 27 questions.\u00a0And by the way, you have to make up the questions.<\/p>\n<p><iframe title=\"Spotify Embed: Increase Profit by Rule of 27\" style=\"border-radius: 12px\" width=\"100%\" height=\"152\" frameborder=\"0\" allowfullscreen allow=\"autoplay; clipboard-write; encrypted-media; fullscreen; picture-in-picture\" loading=\"lazy\" src=\"https:\/\/open.spotify.com\/embed\/episode\/5tqb3ACzJVkP3FG0NiWZn0?si=338ea09e587e45ec&#038;utm_source=oembed\"><\/iframe><\/p>\n<p><strong>Two variables in the profitability equation.<\/strong>\u00a0 Increased profitability comes from changing the value of one of two variables:\u00a0 the money collected must <em>increase<\/em> or the money must<em> decrease<\/em>.\u00a0 Here let\u2019s talk about ways to decrease cost.<\/p>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"alignnone size-medium wp-image-104816 aligncenter\" src=\"https:\/\/sjcivil.com\/wp-content\/uploads\/2024\/04\/Picture1-1-300x168.png\" alt=\"\" width=\"300\" height=\"168\" \/><\/p>\n<p><strong>Rule of 27. <\/strong>\u00a0There\u2019s a way to decrease cost in everything bought on a construction jobsite.\u00a0 The obvious way is \u201cthree quoting\u201d (getting at least three quotes and taking the low bidder).\u00a0 That method aside, how else can we drive the cost of our products purchased to a lower value?\u00a0 <em>Precast beams in Laos (after a washout).<\/em> The avenues to cheaper costs lie in your brainstorming success.\u00a0 Whether it\u2019s collaboratively as a group, or just you on your own, you can come to 27 ways to decrease cost.\u00a0 Even if only one of them is successful, you\u2019ve still cut cost at a minimum of effort.\u00a0 I developed these questions in six minutes for precast beams for a bridge job:<\/p>\n<p><span style=\"text-decoration: underline;\">Rule of 27 &#8211; Precast Beam Purchase<\/span><\/p>\n<ol>\n<li><span style=\"color: #ff0000;\">What are the <strong>materials<\/strong> that comprise a precast beam?<\/span><\/li>\n<li>Can we get the water cheaper?<\/li>\n<li>Can we get the cement cheaper?<\/li>\n<li>Can we get the aggregate cheaper?<\/li>\n<li>Can we get the strand cheaper?<\/li>\n<li>Can we modify the strength of the rebar or strand and decrease steel?<\/li>\n<li>Can embeds (for overhang brackets) be included in the price of our beams?<\/li>\n<li><span style=\"color: #ff0000;\">Can we <strong>fabricate<\/strong> it off site? (this is likely the case for &gt;95% of all projects)<\/span><\/li>\n<li>Can we fabricate it in a cheaper shop?<\/li>\n<li>10.Can we fabricate it closer to the site to reduce driving cost?<\/li>\n<li>Can we go with a different material (i.e. steel or timber)?<\/li>\n<li>Can we provide the P.E.-seal, or can they (at a reduced price)?<\/li>\n<li>Can we offer a more efficient design based on the fabricator\u2019s design selections in the yard?<\/li>\n<li><span style=\"color: #ff0000;\">Can we <strong>install<\/strong> it cheaper?<\/span><\/li>\n<li>Can we use our own crane?<\/li>\n<li>Can we use someone else\u2019s crane?<\/li>\n<li>Is one crane, or two cranes, cheaper and\/or quicker?<\/li>\n<li>Can we install at night, or on a weekend, or a holiday?<\/li>\n<li>Can we get a better trucking rate?<\/li>\n<li>Can we provide pilot cars at our cost?<\/li>\n<li>Can we make a combination deal with our trucker on this job and another job he has with us?<\/li>\n<li>Can we use a different machine other than a crane (like a barge or a forklift) for hoisting?<\/li>\n<li>Can we use different rigging, or include rigging in the cost of the beam?<\/li>\n<li><span style=\"color: #ff0000;\">Can we arrange <strong>better terms on the purchase<\/strong>?<\/span><\/li>\n<li>Can we pay a deposit up front?<\/li>\n<li>Can we negotiate\/offer a Net 10, 5% discount on payment?<\/li>\n<li>Can we get a discount on storage at the yard?<\/li>\n<\/ol>\n<p>The goal of this exercise is to get you and the group thinking.\u00a0 To change a behavior.\u00a0 To generate muscle memory \u2013 the muscle here is your brain, and training it to think of cheaper ways to get things.<\/p>\n<p>This is a process that can be used during bidding or, as above, during the job execution.\u00a0 And it can be used in many types of decisions such as which form system to use, which subcontractor to sign up, and which crew to use on a job.\u00a0Keep drilling down to new ideas by asking and asking and asking questions.<\/p>\n<p style=\"text-align: left;\"><strong><img loading=\"lazy\" decoding=\"async\" class=\" wp-image-104815 alignleft\" src=\"https:\/\/sjcivil.com\/wp-content\/uploads\/2024\/04\/Screenshot-2024-04-16-005338-290x300.png\" alt=\"\" width=\"178\" height=\"184\" \/>My story. <\/strong>\u00a0I did a project in Waikiki where there was a requirement to install sheetpiles, and leave them in place.\u00a0 Most contractors, in my experience, like PZ and AZ sheets.\u00a0 However, on this job, the specification said to install a sheet with a certain section modulus.\u00a0 The engineer didn\u2019t care about water tightness, so the thread type had to be good enough to simply drive in place and then be backfilled against (we we\u2019re under the water table, so we didn\u2019t care about water intrusion).\u00a0 It was a great win for us \u2013 we made about $100,000 on the buyout of the sheets.\u00a0 It was near zero effort (a little bit of calling around), and didn\u2019t affect our schedule.\u00a0 It also didn\u2019t take 27 questions to get to this solution, but the principle of the process was the same \u2013 \u201chow can I achieve the design intent for less money?\u201d<\/p>\n<p>Work safe!<\/p>\n<p>&nbsp;<\/p>\n<div class=\"su-button-center\"><a href=\"https:\/\/sjcivil.com\/wp-content\/uploads\/2024\/04\/2024.04.08-Rule-of-27-to-Increase-Profit.pdf\" class=\"su-button su-button-style-flat\" style=\"color:#FFFFFF;background-color:#293a57;border-color:#212f46;border-radius:12px;-moz-border-radius:12px;-webkit-border-radius:12px\" target=\"_blank\" rel=\"noopener noreferrer\"><span style=\"color:#FFFFFF;padding:0px 30px;font-size:22px;line-height:44px;border-color:#6a768a;border-radius:12px;-moz-border-radius:12px;-webkit-border-radius:12px;text-shadow:none;-moz-text-shadow:none;-webkit-text-shadow:none\"> Download The PDF<\/span><\/a><\/div>\n<span class=\"et_bloom_bottom_trigger\"><\/span>","protected":false},"excerpt":{"rendered":"<p>Executive Summary. \u00a0Most decisions can be further analyzed by collaborative or self-inquiry.\u00a0 When looking for ways to decrease costs, ask yourself 27 questions.\u00a0And by the way, you have to make up the questions. Two variables in the profitability equation.\u00a0 Increased profitability comes from changing the value of one of two variables:\u00a0 the money collected must [&hellip;]<\/p>\n","protected":false},"author":4,"featured_media":104816,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_et_pb_use_builder":"","_et_pb_old_content":"","_et_gb_content_width":"","iawp_total_views":20,"footnotes":""},"categories":[192],"tags":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v22.5 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Increase Profit by Rule of 27 - SJ Construction Consulting, LLC<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/sjcivil.com\/increase-profit-by-rule-of-27\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Increase Profit by Rule of 27 - SJ Construction Consulting, LLC\" \/>\n<meta property=\"og:description\" content=\"Executive Summary. \u00a0Most decisions can be further analyzed by collaborative or self-inquiry.\u00a0 When looking for ways to decrease costs, ask yourself 27 questions.\u00a0And by the way, you have to make up the questions. 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