At every pool show, I have always opined to pool builders that they’re actually manufacturers and should be concerned with Throughput. Do Pool builders create a living experience and bring people’s dreams to life? Yes. But when considering the tasks that the builder’s team members execute on a daily basis, you discover they are actually manufacturing a product. They procure raw materials, schedule team members to convert and assemble that raw material into a finished product – manufacturing.
Maximizing Profits: The Role of Throughput in Pool Building.
Why is throughput important? It’s the number of pools the builder can build in a given time frame. Consider a pool builder who nets a profit of $20,000 per pool, and builds 4 pools per month, using current processes and products. That builder is now presented with two new options of products that are supposed to be better than what the builder currently uses in constructing the pools. Product A will save $1,000 in product costs but require the same amount of labor. Product B will save $1,000 in labor and reduce the construction time by 1 day per pool, but the product cost is the same. Are both products equal? No. While they both save $1,000 per pool ($48,000/year), Product B reduces the construction time by 1 day per pool which increases throughput. Over the course of one year, saving 1 day per pool times 4 pools per month times 12 months yields 48 extra days per year! That is well over a month of days, in which the builder can build at least 4 more pools that will yield an extra $80,000 in net profits that year, in addition to the $48,000 in labor savings by choosing Product B.
This also means 4 extra customers per year and larger raw material purchases, which could mean discounts because of higher volume. Or the builder could simply take a 48 day vacation. Whatever the choice for taking advantage of the extra 48 days, it resulted from understanding the value of throughput and its impact on pool builders.
Streamlining the Pool Building Process: The Impact of CMI on Business Success
This is one of the driving factors for us developing many of our products like our JRD Rebar Clamp and Equipotential Bonding Grids. Both products are priced competitively with competing alternatives, but both save in labor and more importantly increase Throughput. For more information on these two products and others, call 919-781-3411 or email [email protected], and ensure you have Code Compliant installations that increase your profits!