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Notes
from a lecture and an interview with Brent Salter, VP of Salter Construction Co.
Background
Salter Construction Company, Inc. is a residential and
light commercial design/build firm located in Evergreen, Alabama. They
specialize in the design, as well as the construction, of custom homes,
renovations, and structures designated for light commercial use. The Salter
family has been in this business for a long time. They started out many years
ago, rebuilding their own house after a fire, and since then, they have not
looked back. In 1999, the company had revenues of around $2 million dollars.
Brent Salter,
a 27-year-old graduate of the Auburn Building Science Masters program and VP of
the company, has helped to bring Salter Construction Co. up to date with many of
the new technologies used in the construction industry today. One specific
technology involves the use of software that enables him to produce a design for
a structure, as well as a working set of drawings. This ability has given Salter
Construction Co. and edge over the competition for a couple of reasons. First,
by linking the usually separate activities of design and construction, the
customer will end up with a more complete, and more well built structure.
Secondly, because the designer and the builder are one in the same, the customer
will gain the benefit of the builders knowledge of construction methods and
costs, in the design of the structure. This usually will usually result in a
project that is delivered in a more timely and cost efficient manner.
As you will see I the following notes, there are many
different facets to the residential and light commercial design build industry.
Residential Building Opportunities
Design - Build
Developing Business Opportunities &
Technology
Introduction to Home Building
Participants
Land Developers
Engineers/Surveyors
Architects/Designers
Realtors
Builders
Subcontractors
Material/Product Suppliers
Financial Institutions
Governmental Agencies
Economic Impact
Residential
building construction plays a leading role in the nations economy. Typically
Accounting for about 3.5% of the GDP.
Investment
in the construction of residential building typically represents over 40% of the
value of new construction put in place each year.
Single
Family residential building accounts for 65% of the private residential building
sector.
Opportunities in Residential Construction
Streamlining
business operations
Developing
vertically integrated operations to achieve economies of scale
Developing in
house Designing.
Design - Build
When and owner contracts with a single firm for both design and
construction services
Becoming an increasingly popular project delivery method
Increasingly used by owners largely due to economies of cost and time
that can be realized by melding the two functions of design and construction.
Injecting contractor expertise and advice into the design process offers
the possibility of achieving both time and cost savings for the owner.
Contract Types
Design
Build can be achieved under most contract types. Negotiated or lump sum would be
the most popular for residential construction.
Two
separate contracts are often used to separate design and construction services.
Key Benefits to Design - Build
Gives the
owner a single source of responsibility for the entire project.
Develops
the team concept
Potential
for reducing cost and delivery time
avoids
design - construction conflicts
produces
a high-quality, owner focused project
The owner
and design - builder work closely through the following steps:
Planning
Designing
Cost Control
Scheduling
Site Investigation
Possibly land acquisition
Financing
Construction to Completion
Developing Competitive Advantages Through Technology
Today
most technology is viewed as standard and does not offer an advantage but only
keeps you up to speed.
Staying
at the cutting edge of technology offers risk but with a potential for greater
returns.
Residential Design/Build Technology
HISTORY:
SOFTPLAN, INC.
FOUNDED 1985
PURPOSE:
-TO
FIND A BETTER WAY TO PREPARE COMPLETE WORKING DRAWINGS & ACCOMMODATE their
CHANGES
-CURRENT MARKET
LEADER IN RESIDENTIAL / LIGHT COMMERCIAL DESIGN & ESTIMATING
-DESIGN
CAPABILITIES
-COMPLETE WORKING
DRAWINGS
-ELEVATIONS
-FLOOR
PLANS
-CROSS
SECTIONS
-SITE
PLANS
-3-D
RENDERINGS
-DETAILS
-ESTIMATING
-SOFTLIST CREATES REPORTS AUTOMATICALLY FROM INFORMATION ALREADY IN SOFTPLAN
DRAWINGS.
-SOFTLIST CALCULATES INFORMATION CORRECTLY
-CHANGES
CAN BE MADE QUICKLY AND EASILY.
-ESTIMATING
-SOFTLIST
ALLOWS YOU TO LINK LABOR COST WITH DIFFERENT MATERIALS
-YOU CAN TRACK AND
UPDATE COST OVER TIME TO MAKE SOFTLIST
INCREASINGLY ACCURATE
-CUTTING EDGE
-VOICE
ACTIVATED MODULE
-LEAVE
THE MOUSE IN THE DRAWING AREA AND ACTIVATE ALL MENUS VERBALLY
-NO
OTHER CAD PROGRAM SUPPORTS THIS TECHNOLOGY
Case Analysis
Selling High Quality construction services
Most clients purchase construction services based on the overall cost of
the project.
-
The factor of cost is used as the main comparison factor in selecting a
contractor.
Because construction services are not easily compared because the actual
project doesnt exist yet, quality of construction is not as tangible to the
owner as price.
Our company is one of few in the
area that will give a lump-sum contract price for construction services.
Question:
What strategies can Salter Construction Co. employ that would enable them
to more efficiently procure construction business from the customers that they
also do design work for?
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