Open for Business

As the spring selling season begins, the message we hear from builders is clear: The best builders are long past wringing their hands about the slowdown and are moving forward, adjusting their organizations for the year ahead.

Spring is always an important time for home builders, as nearly 40 percent of new-home sales take place between March and June. This year's spring season is more important than ever, as Wall Street, economists, and the industry at-large try to gauge whether the home building industry can bounce back.

Our team of reporters visited home builders in Arizona, California, Georgia, and Kentucky, and while the builders we interviewed understand that the fast-paced boom era is past, this new, more modest period presents some unexpected opportunities.

Each of our stories in this year's Field Report describes a best practice that offers positive benefits. Ryland is selling more upgrades in its design center to the tune of 10 percent more per home buyer. Drees Homes deployed a back-office system the builder anticipates will save $800,000 annually. Legacy Communities in Atlanta partnered with lumber dealer Plymart and Boise Cascade to reduce its floor joist costs by 10 percent. And Clarum Homes in Palo Alto, Calif., handles site waste more efficiently and saves up to $1,000 per house.

There's a saying in the music business that success takes 99 percent perspiration and 1 percent inspiration. We know you're working hard. It could be that what you need to keep your company profitable in 2007 is a little inspiration to try something new. Instead of dwelling on the down market, builders should refocus their efforts on what's possible in this new climate. The techniques we outline in these stories are just some ways companies can succeed in difficult times.

Time for Design

A slower pace, streamlined choices, and more education lead to higher options sales at Ryland Homes in Phoenix.

It's 8:30 a.m. on an unusually chilly Friday morning in Phoenix, and Kevin and Tiffany Kucifer are due to arrive shortly at the Ryland Homes' design center to select options and upgrades for their new home. They're buying the Sonora, a two-story, four-bedroom, 2 ½-bath model with a large upstairs bonus room and a first-floor den, in Ryland's Sunset Farms Vista in Tolleson, Ariz. At 2,886 square feet, it's the largest home available in the community. They're also installing a pool.

Designer Wade Van Dine has told them ahead of time to plan on being there for the day—and they'll need every minute of it. They are concerned that they haven't met with their mortgage counselor yet to know how much money they can spend. This is an anomaly in the process, but the Kucifers had been called out of town suddenly with a death in the family and couldn't meet with him before their appointment. Van Dine knows this, and says that they have a sizable budget with their incentive dollars. Their mortgage counselor works in the same office suite and will stop by to see them later in the day.

He recommends that they pick out what they want, and they can make adjustments as needed. He also explains that for each option category, he'll show them standard items and the available upgrades, grouped into price points from low to high. He'll also point out the pros and cons of the choices, including upkeep and impact on resale value. They're comfortable with that, and they're ready to start.

It's a big change from the crazed days of the real estate boom, when four designers each juggled two appointments a day, gently but firmly pushing buyers through their selections.

“In 2005, it was almost a factory line,” says Ryland sales manager Emilio Garcia. “A market like this is beneficial to buyers. They get a lot more time to make their choices.”

BEST PRACTICES

Now, while sales are down, the amount of money that customers are spending on options and upgrades is up, says design center manager Virginia Richards. On average, customers are spending 10 percent more in the design center than they did when the market was booming, she says. In the boom times, many of the buyers were investors who chose standard grade on everything. The buyers now are buying for themselves, and they recognize that they're creating their dream home. They're thoughtful about their choices and willing to spend money to get their heart's desire.

They're much more focused, Richards says, and, thanks to cable networks such as Home and Garden TV, they want more for their homes.

With the relaxed pace, Van Dine and fellow designer Carla Arger each do no more than one appointment per day. (The other two designers have moved to other divisions or departments at Ryland.) They can take their time, get to know their buyers' lifestyles, and help them make decisions that customers will be happy with for years to come.

The Kucifers are new in Phoenix, having moved here from Virginia Beach, Va., the previous summer. She is a registered nurse in a pediatric cardiac care unit; he is in medical equipment sales. They have a 6-year-old daughter and cats. This is the first time they've ever bought a new house.

It's all important information for Van Dine, who has worked at Ryland for five years. The first and most important decision of the day is flooring because it costs the most money of all their options (except for the pool) and is the most permanent. If they'd said they had dogs instead of cats, for example, he would have strongly suggested they rethink their choice of hardwood floors. As it is, he takes time to explain how the floors will wear and how they could be damaged. They spend a long time choosing carpet, with a discussion that includes Kool-Aid cleanup. Van Dine, a dad with three young children, has been there. The couple ultimately chooses the same style of carpet he has in his own house.

“It's like they have a family working with them,” Richards says.

While the Kucifers comment on the number of choices they have, they don't realize that Richards and the design team have done a lot of the heavy lifting for them ahead of time. When Richards took over as manager in 2003, one of her first tasks was to streamline the number of options. She asked vendors to identify their top 10 sellers in the market. She asked the designers to pick out Ryland's top 10 sellers as well. Everything else was taken off the shelves. Lighting and plumbing fixtures, once sold individually, were combined into whole-house packages, dramatically cutting the decision-making process.

With the streamlined choices, Ryland now only offers customers options that can go in an inventory home. With the number of cancellations the market has experienced, it's critical that Ryland be prepared to resell any house that's under construction. That means that while the Kucifers have plenty of choices for carpet, tile, and countertops, they're all safely within the neutral color palette that consistently sells in the Phoenix market. And like virtually all of Phoenix's production builders, Ryland doesn't sell paint, Richards says. The interior will be a cottage white that coordinates with any color combination.

From there, it's on to cabinets (they choose spice cherry) and countertops (granite), and then to see John DeArmond with Dennis Sage Home Entertainment, one of the two outside vendors who work in the design center (the other is Joe Ayers with Paddock Pools). When the Kucifers arrive to meet with DeArmond, he already has their floor plan pulled, along with the available options. They understand that pre-construction is the best time to install options such as structured wiring, surround-sound speakers, a security system, and central vacuuming.

By the end of the day, they'll also choose appliances, lighting and plumbing packages, doors and door hardware, cabinet hardware, stair rails, window coverings, their pool package, and their favorite, the kitchen backsplash. Initially, they wanted the same elaborate tile back-splash they'd seen in the model. Van Dine explains that it probably will push them way beyond what they wanted to spend. Together, they design a backsplash that will be very unique, including accents of iridescent mosaic tiles. They are, to put it mildly, thrilled with the results.

One of the reasons for the Kucifers' delight is a group of regular exercises that occur in the design center, Richards says. Once a week, the designers all spend a day in a community, talking to the sales consultants and walking the models and all the houses that are under construction. They see what's selling and how selections work out in the field. Richards also watches the designers' sales figures. If a designer's sales are weak in a particular category, she sends that designer out to shop the competition and has them come back and report to the design center team. “If [the designers] don't see the value in a product, they won't sell it,” she says. The staff also participates in a market-wide design center roundtable, which sponsors ongoing education and provides a forum for problem-solving.

Training isn't limited to the design center staff. All new sales consultants spend a day in the design center, walking the same process their buyers will go through. Plus, when a new product is introduced, Richards arranges training for sales consultants, construction superintendents, and warranty staff. Every two weeks, she meets with the purchasing staff to iron out any difficulties, such as finding substitute items for products that have been discontinued.

Collectively, it's a good practice in a soft market because it keeps everyone up to date on what products are available in the market and helps the designers sell the value of the options. It also assures appropriate pricing and helps everyone at Ryland provide customers with consistent information.

At least twice during the day, Van Dine asks the Kucifers if they want to break for lunch. It's not unusual for the designer to order in food or send someone out to pick up lattes. The couple opts to keep going, grabbing snacks from the design center's demonstration kitchen, which is well-stocked with fruit, granola bars, yogurt, bagels, and pastries, as well as coffee, soda, juice, and bottled water.

By the end of the day, they say they are feeling a bit of sticker shock about how much money they've spent, but they feel they were well-prepared for the process and are very excited about the choices they made. Van Dine goes over all their selections with them one last time, gets their sign-off on everything, and tells them they'll be getting carpet, wood, and tile samples in the mail within a few weeks. They'll also get a call when it's time to pick out the granite slab for their kitchen countertop.

It's almost 5 p.m. when they're finished.

“The house is going to be great,” Kevin tells Tiffany.

Richards smiles as they leave. She's glad that they're happy with the choices they've made, and with the revenue their purchases will bring the division. Even though the Kucifers had a long day, the decision-making process was simpler because there were fewer selections within each product category. It was more effective because Van Dine's training helped him explain how each selection would work in the house. And if something were to happen to the deal, there's nothing in the house that would make it tough for Ryland to resell. But that's not likely to happen now that the couple has made such an investment in making it their own.

“We do the emotional tie-down,” Richards explains. “They'll talk about that backsplash and the carpet. They'll carry the samples around with them for weeks. It's not a house now. It's a home.”

Follow these tips to help customers have a better design center experience:

- Pat Curry

Go With the Flow

The Drees Co.flirts with evenflow production scheduling through Web-enabled communication with trade partners and its field staff.

This April, The Drees Co. should complete the rollout, to all 13 of its divisions, of a program that allows its trade partners and site superintendents to submit field purchase orders (FPOs), with changes to original POs, through a Web-based portal, payment for which is vouchered automatically without the need for further approval or data entry. By streamlining its order-variance and accounts-payable activities, Drees expects to save $800,000 per year once its auto-voucher system is fully operational.

The FPO program, which began last August, is the latest twist to what has been a six-year-long journey by the Fort Mitchell, Ky.–based builder to make production more efficient and paperless by arming its contractors, suppliers, and its field staff with real-time scheduling and construction information they can access easily online. Along the way, Drees has weighed the pros and cons of applying evenflow construction theories to a company that last year started 3,105 homes and generated more than $1 billion in revenue.

Evenflow means different things to different builders, though few implement it under its classic definition of starting the same number of homes all the time and not letting starts exceed production capacity. “Most companies don't have systems in place that tell them what their production capacity is,” observes Mahesh Bhupalam, president of Totally Productive Group, a Coral Gables, Fla.–based process improvement consultant.

DAILY UPDATES: Site supervisors at Drees do daily updates on the DreesBuild Web portal, which lets them electronically view progress reports of the projects they oversee.

No problem there for Drees, an avid investor in technology that two years ago installed a J.D. Edwards operating system. (J.D. Edwards is a division of Oracle.) But so far the company has cherry-picked different aspects of evenflow without taking the full leap, partly because Drees allows its buyers considerable leeway to customize their homes, which can gum up scheduling. Its 150 to 180 site superintendents—which it calls “builders”—can still override start and finish dates.

Nevertheless, evenflow, as an ideal, informs Drees' production goals, says Ron Colyer, the company's operations resource manager. Drees was all set to initiate a rigorous evenflow regimen at its Marquis Homes division last year until buyer demand softened. “We haven't given up on that,” says Colyer. But after attending one of Bhupalam's two-day seminars last summer, Colyer concluded that “evenflow isn't some rigid marching order; it's about balancing and planning starts, and managing your backlog.” Reducing cycle time, then, is less important to Drees than the fact that “we've become a lot more consistent.”

The American poet and essayist Ralph Waldo Emerson once mused that a foolish consistency is the hobgoblin of little minds. But Drees, to be sure, isn't foolish. It isn't about to let scheduling restrain sales. Last summer, it accelerated production in Nashville, Tenn., to 40 starts per month—versus one start every three days, a company-wide target—to meet demand. “Our systems didn't help us, but we didn't want them to because we didn't want to tell customers their homes would be delayed,” says Jack Herbstreit, Drees' vice president of production.

It takes Drees between 110 and 120 days, on average, to construct a house, which Colyer admits isn't much changed from previous years. Yet, its officials agree that, for now at least, evenflow is impractical. “We've never been able to do stringent even-flow,” says Dave Metz, vice president of national purchasing operations. “So we've focused on managing our flexibility.” Process improvements have, in fact, led to dramatic project-by-project gains, as in Jacksonville, Fla., where construction once took 180 days. Now, some homes there are being built in less than half that time. Drees has also winnowed one key measurement—contract to start time—to 72 days (and to as low as 45 days in some instances), from 90 several years ago, by placing plan reviewers and custom-design request coordinators in each region. Their job is to get house plans back into the office from the field faster. Those plans are now returned within five days, versus 17 to 20 days when Drees' salespeople handled that task.

Herbstreit, while no evenflow advocate, is a big believer in establishing consistent methods of executing and monitoring production. He was the architect, back in 1998, of Drees' first computerized scheduling system, which became the platform for DreesBuild, a Web-based portal that its builders update daily about what's going on with every stage of their homes' construction.

TRADE PORTAL: The DreesTeam Web portal allows subs and suppliers to check production schedules.

Through this portal, Drees can see where bottlenecks occur most quickly (typically at the stages involving poured-wall foundations, framing, and brickwork), and why. For example, one recent job was 23 days behind schedule partly because a delivery of framing lumber had been 10 days late. This portal also puts the strengths, weaknesses, and patterns of its builders and trade partners on full display.

When Drees spots red flags, one of its responses is to centralize its scheduling and reallocate manpower to neighborhoods whose construction is lagging. “The beauty of this is to be able to move [contractors] around from other districts that might have excess capacity,” explains Metz. In that respect, Drees follows evenflow doctrine of viewing its construction sites as a single “factory” whose total capacity—not just that of individual communities—dictates production.

Herbstreit says it took Drees several years to get its builders to understand why feeding DreesBuild with daily updates was important. The tide turned, says Colyer, in 2002, when the company opened a second portal, called DreesTeam, through which trade partners could access scheduling information for free. “Once the vendors started monitoring the system, the builders realized they had to be more current and accurate,” notes Colyer. Drees created positions for a production resource manager for each division. Managers are responsible for training vendors on the system, solving problems, and acting as liaison with the company's information systems department.

Through December 2006, 826 of 1,461 vendors were using DreesTeam, which gets about 15,000 hits per month. “It has reduced steps with our in-house scheduling communication by giving our manufacturing units and installation services the same ability to access the same timely information available to our sales team,” says Dave Sharp, executive account manager for Builders First-Source's Ohio Valley Group in Cincinnati. Builders FirstSource was Drees' initial supplier to go “phoneless” on scheduling deliveries, which Sharp says required a leap of faith in the system among Drees' builders, especially after some initial snafus. Debbie Franxman, sales consultant for Wiseway Supply, a Florence, Ky.–based lighting supplier, adds that DreesTeam allows her company to see a job's entire construction schedule online, as well as forecasts about future starts, “which lets us control our inventory. I wish other builders would schedule this way.”

Because Drees provides vendors up to 60 days' notice about possible changes to its production schedule, suppliers have been more willing to lock in prices for materials and labor, says John Heeter, who manages production for Drees' Premier Homes division. Suppliers can also track their own service performances, for better or worse: A “duration” report shows that Drees' best electrical subcontractor last year was Dayton, Ohio–based Dillard Electric, which completed 97 percent of 68 roughs on schedule. It took Dillard 1.47 days, on average, to complete its stage of a house. (Typically, Drees schedules three days for rough electrical.) By comparison, some electrical subs' on-time completion rates fell below 60 percent.

BEST PRACTICES

Drees is using this data to determine its preferred vendors. David Drees, the company's CEO, says that this year his company will conduct an evaluation of its suppliers with an eye toward thinning the herd in anticipation of introducing value engineering to its construction process. Its ability to evaluate vendors, though, currently lacks a post-sale customer satisfaction component. So Drees is developing new contract-writing software, called Dream-Builder, which includes data about quality inspections and warranties that will be accessible on its existing portals. DreamBuilder should be ready later this year.

The Drees Co. has been tweaking its production scheduling systems for six years and has learned a thing or two about getting trade partners and employees on board:

- John Caulfield

Fast Framing

One Atlanta builder uses collaboration software and improved sawing technology to solve a perennial challenge:to deliver flooring systems that are accurate and on time and can be backed up by warranty in the event of a defect.

There are so many instances in which technology is a solution looking for a problem that it's really worth noting when technology actually solves a business problem.

Such is the case with Legacy Communities, an Atlanta company that builds about 1,600 homes a year, many of which average about 3,000 square feet and are typically priced for first-time buyers in the $100,000 to $200,000 range.

For the past year, Legacy has been using software offered by Atlanta-area lumber dealer Plymart and wood products company Boise Cascade, which cuts its design time in half. New sawing processes reduce the linear footage of engineered wood it needs to purchase, slashing floor joist costs by 10 percent.

A BETTER WAY: A combination of collaboration software, improved sawing technology, and more accurate labeling of floor plans dramatically improved the framing operation at Legacy Communities.

“The new system dramatically improves our framing operation,” says Steve Connor, Legacy's vice president of operations.

Conner says that for several years, Legacy Communities had problems getting its flooring systems installed correctly. Floor joists would have inconsistent cuts, be improperly marked, and lack proper documentation, so the framers would just make their own decisions as to how the joists should be installed.

Too often, inspectors would fail jobs because the flooring system wasn't installed as specified by the original plans. Such a result could set back Legacy's production schedule several days. Another negative result is that once the integrity of the flooring system is compromised, the dealer's warranty is voided.

At the low price points Legacy operates under, the home builder simply can't afford to have an inefficient flooring process and needs to be confident that the floors installed can be backed up by the dealer.

“We're always looking for better ways to build the structural components of the house,” Connor says. “Especially something like the flooring system.”

At least in the design phase, much of the heavy software lifting is done by Boise Cascade's PlansRoom, which is a private-label version of Autodesk's Buzzsaw collaboration tool. This Web-based application lets architects, Plymart technicians, and Legacy's project supers share and collaborate on engineering drawings and CAD files. Since it's Web-based, everyone who's authorized to use the application can do so on any computer with a Web browser. This means project supers can access BoisePlansRoom at home, at the trailer, out in the field on a wireless laptop, or in the corporate office.

Connor says Boise's willingness to pick up the cost for PlansRoom was very important to Legacy Communities. “I don't think we would have spent the money on Plans-Room on our own,” he says.

DESIGN SPEED: Legacy Communities has slashed its design time in half by using software provided by Boise Cascade.

Tim Mickelson, a technical representative at Plymart who works closely with Legacy Communities, says the old system was mired in paperwork and inefficiency. He says, in the past a Plymart designer would develop a set of plans for a flooring system and print it out in paper form. The plans would have to be hand delivered to the builder, who would then send it back and forth from the builder to the dealer several times before everyone agreed on the plans.

“This system required both the builder and the dealer to keep very accurate paper trails,” says Mickelson. “If a super called from the field, or an office worker had a question, it had to be pulled out of a paper file and there was never any guarantee that the latest version was in the file,” he says.

Now, there's a person at Legacy Communities who's in charge of administering the application. When there's a change to a plan or a new plan is issued, he goes into Plans-Room and electronically notifies all the appropriate parties that there's a change in the plan. This way, everyone in the chain has the latest update.

Once the builder issues a new plan or update to Plymart, a Plymart designer uses software called BC Framer to design the flooring system. When the framing layout and material list is agreed upon, the designer takes the BC Framer file and drops it into a SawTek system, an automated saw that reads the file and cuts the floor joist to the nearest 1/16 of an inch.

All the floor joists are pre-cut for electrical, plumbing, and mechanical and are marked in two places, similar to the way the pieces of a shelving unit or IKEA kitchen cabinet are marked. All the joists come with plans attached in a plastic bag.

BEST PRACTICES

“This system takes the guesswork out of framing,” says Legacy Communities' Connor. “Once the floor joists are out in the field, we don't want them modified. We don't want plumbers and air-conditioning people cutting big holes in the floor joists,” he says.

Connor says these kinds of inefficiencies are not uncommon. He says most medium and small builders are construction people at heart and don't always think about how all the little hang-ups and delays impact the bottom line.

“Construction is a business and has to be managed properly,” says Connor. “We couldn't build 1,600 houses a year without Boise's Plans-Room or some of the other automated tools we've been using. The delivery of the data would simply be too slow,” he says, adding that since the data is more reliable, it makes the builder more efficient.

By using the collaboration software and improved sawing technology provided by Plymart and Boise Cascade, Legacy Communities is able to:

- Steve Zurier

Waste Not

Do you have any idea what's in your dumpsters? You should. All of that debris is costing you money.

IF YOU'RE LIKE MOST BUILDERS in this country, there is a good chance you don't really know what's in your dumpsters. You know, for example, that they're filled with cardboard boxes, drywall scraps, plywood, bricks, blocks, 2x4s, and engineered lumber, but you don't realize what all this waste means to your bottom line. To put it another way, you don't know how much money is in your dumpsters—money that you are, in effect, throwing away.

“Most builders think they know what their waste disposal costs are, but they have no idea,” says Peter Yost, a principal at 3-D Building Solutions, a high-performance building consulting firm in Brattleboro, Vt. And what you don't know is hurting your business.

Waste generation is an inevitable part of home building, but construction debris represents an opportunity that many builders have not realized. For instance, it is estimated that a 2,000-square-foot home generates about four to seven tons of waste. Most builders pay a fee to have this waste hauled off to a municipal landfill, which is usually priced at around 70 cents per square foot of the home's size. So, for a 2,000-square-foot house, a builder will be looking at about $1,400 in waste hauling costs, which go up as the size of the house increases. Plus, if you have wasteful building practices or have inefficient subs, the cost can be higher still.

If you're lucky enough to build in a jurisdiction where waste hauling fees are low, simply disposing of this material makes financial sense, even though it is not good environmental stewardship. But is having this debris hauled away the best practice for handling waste? It is not, says Yost. The fact is, tipping fees at most landfills are only increasing and waste haulers' fuel surcharges are going up as well. So, any builder who is interested in saving money should be looking at alternative methods to dealing with construction debris.

BEST PRACTICES

“Ask builders to upgrade the windows they put in their houses, they will tell you that it will be prohibitively expensive and will affect the bottom line, but if you ask them about sending their waste to a dump, they'll say it's not that much money,” Yost says. “[Builders] can't play it both ways. Twenty-five dollars is twenty-five dollars,” he argues.

In recent times, some builders have been pursuing a more thoughtful approach to handling waste disposal and realizing that there could be a financial gain in how they process this material. One such builder is Clarum Homes in Palo Alto, Calif.

A builder with a strong commitment to the environment, Clarum Homes builds move-up single-family attached and detached zero-energy homes—meaning, the houses reduce energy consumption by 90 percent and produce more energy than they use—with standard features such as solar panels and tankless water heaters. Three years ago the company was hauling away five tons of waste for each house it builds at a cost of about 40 cents to 60 cents per square foot, says president John Suppes. This translated into $800 to $1,200 for a 2,000-square-foot house. “That's about average for the state,” he says.

Today, Clarum no longer sends its waste to a landfill—at least not all of it. The builder now recycles 85 percent to 90 percent of its debris and most of this waste is put to good use right on the jobsite, which saves money in areas with high tipping fees. Suppes says, for example, that Clarum could grind 36 yards of debris a day with a crew of one truck and the Packer 750 and the cost would be $750 in Oakley, Calif. (The Packer Suppes is referring to is the Packer 750 from Mableton, Ga.–based Packer Industries—maker of the self-contained, mobile, low-speed machine that grinds wood, drywall, block, brick, and asphalt roofing shingles into materials that can be used on site.)

A 20-yard waste hauling dumpster would cost $400 plus $50 per ton, which could add up to $550 easily per load and require two loads for a total cost of $1,050 for the same amount of debris. “Plus the site gets the added benefit of having material to reuse,” Suppes notes.

According to the EPA, 65 percent to 85 percent of construction waste consists of highly recyclable material such as concrete and mixed rubble, wood, and drywall. “Many building components can be recycled where markets exist,” the EPA's office of solid waste says in a fact sheet. “As of June 2004, more than 1,000 asphalt and concrete recycling facilities, 700 wood waste recycling facilities, and 300 mixed-waste facilities recycle demolition rubble in the U.S. Asphalt, concrete, and rubble are often recycled into aggregate or new asphalt and concrete products. Wood can be recycled into engineered-wood products such as furniture and plastic-composite decks, as well as mulch, compost, and other products.”

Recycling waste in available markets is great, but builders can also reuse waste right on the jobsite. “We found out about the Packer and believed we could do better [than what we were doing],” Suppes says. “We grind up bricks and blocks and use it around our foundations and retaining walls and for base rock under our sidewalks,” Suppes explains. “Wood products are ground to ½-inch sizes and used as mulch and for erosion control on the landscape. Gypsum is ground to a powder and used as a soil amendment.” The company uses its leftover asphalt shingles as road base or it sells them back to manufacturers, who add the materials into the production of new shingles.

This recycling and reuse strategy is a great environmental story, but there is a business story here as well. Clarum only started this recycle and reuse strategy at the end of 2005, so the system is in its nascent stage. Suppes says, however, that the company sees great potential. Waste disposal cost (and savings) per house depends on what jurisdiction the company is working in and what the local disposal costs are. For example, the city of Menlo Park requires builders to pay a $1,000-per-house deposit for waste disposal, but because Clarum Homes recycles and reuses its waste, the company is exempt from the fee.

Suppes says that in some cases it costs an extra 20 cents per square foot to reuse and recycle waste rather than send it to a landfill because the cost might include recycling, the extra man power to sweep up, and any non-recyclable material disposal that must be sent to a landfill. However, the extra 20 cents is usually off-set because the waste replaces materials that the company would have had to purchase anyway, such as mulch and filler material. It also depends on the tipping fee in the local jurisdiction. “If the tipping fee is high, we save money per house,” Suppes says. “In some urban areas, for example, the dump fees are very high.”

Clarum's strategy also has yielded an unexpected surprise: a new income stream. When there is a lull in its own grinding work, Clarum performs grinding work for other local builders, including Habitat for Humanity. Things are going so well that the company may be looking at purchasing another Packer, Suppes says.

Ken Patterson, president of Packer Industries, says he has builder clients all over the country and most, if not all, of these builders reusing their waste stream generally save money on two fronts. “They save money using mulch as a filter berm [in lieu of a silt fence] and as erosion control,” he says. “But builders have to put in a construction entrance as well. Instead of using gravel, they would use mulch. Everything added up can save builders $1,000 per house.” So now builders who would normally be paying up to $1,200 and more per house for waste hauling are paying $200 per house. “Which would you rather pay?” Patterson asks.

For builders who do not own a Packer (or a similar machine available from Concept Products Corp. in Paoli, Pa.), there are companies that will come to your jobsites and perform the services for a fee.

MATERIAL MATTERS - SOURCE: EPA WASTE OFFICE

The next step toward reducing the waste that leaves your jobsite is to reduce the waste you generate in the first place by implementing efficient construction practices, since not all construction waste can be used on the site. Items such as cardboard packaging, for example, must be sent to a recycling center, and oriented strand board with a radiant barrier must be sent to a landfill. Although regulations vary from jurisdiction to jurisdiction for reusing jobsite waste, Patterson knows of only one state that has restrictions on adding any waste to the soil—North Carolina—so he feels that builders most everywhere should be doing this.

Yost agrees. Builders who are not thinking about reusing and recycling their waste are not thinking about the big picture, he says. “[Builders] ought to know their waste stream. It's a reflection of the quality of their operations,” he believes. “Plus, when that waste leaves that site, [builders] still own it and it is still their problem. It is long-term liability.” Yost continues, “For those people who say it is not cost effective to reuse, I am convinced that it is.”

“It's a mistake to not reuse the waste,” Suppes adds. “Landfill fees in most markets will continue to go up, material costs will continue to go up, and fuel will continue to go up.”

Clarum Homes launched a program that has significantly reduced the amount of waste it sends to local landfills and now grinds and reuses much of its debris on the building site. Here's how you can do it too:

- Nigel F. Maynard