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kjae738

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Topic # 201569 24-Aug-2016 16:46

I'll get straight to the point. I'm currently doing a course at my local college for furniture making and I recently had a heated arguement with my lecturer on the cost of making furniture for someone. He told us to add wastage which is 10%. So for wastage I've added 10% to the timber and plysheet used. But apparently since we are charging for the labour which in total was 200hours the lecturer said we have to add wastage to labour as well. I know every case is different but in your experience have you/ will you charge wastage for labour? His arguement is that, even if we make the mistake it’s up to the customer( the one requesting something to be built) to cover for the time wasted.

What are your thoughts?

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Reply # 1616962 24-Aug-2016 16:51

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Perhaps wastage isn't the right term for giving yourself some breathing room on the construction time. In my world you would typically assume lost time due to ignorance/innocence would be bundled into the general margin on the project.

Of course nobody wants to pay for someone not doing the work as fast as humanly possible, but mistakes will be made, and this shortfall must be made up somewhere. If you, as the tradesperson, have made the mistake then the extra time costs will be eaten out of the total profit margin you intended to make at the end.

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Reply # 1617009 24-Aug-2016 19:53

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Disrespective:

Perhaps wastage isn't the right term for giving yourself some breathing room on the construction time. In my world you would typically assume lost time due to ignorance/innocence would be bundled into the general margin on the project.

Of course nobody wants to pay for someone not doing the work as fast as humanly possible, but mistakes will be made, and this shortfall must be made up somewhere. If you, as the tradesperson, have made the mistake then the extra time costs will be eaten out of the total profit margin you intended to make at the end.

Hmm I am not a cabinet maker but I DO charge for my time. We will often build a little bit of time into projects to cover unforseens so we aren't back at the client for every minor thing, however, I don't consider it reasonable to build margin into your price to cover ignorance or innocence. The client is paying you (Presumed to be qualified and suitably experienced to complete said job) not to learn on the job. If we are unsure or are completing a job for the first time, and lab time isn't an option, then time lost would be considered the "cost" of training so we are quicker and more experienced next time around.

I once had some work quoted to complete renovations at the office. The builder charged a project management "margin" on his price, including his labour, we had a discussion around it, I told him it wasn't something I was comfortable with, he insisted, he missed on the job, as I gave it to someone else.

He wasn't happy and insisted that it was "standard practice". I told him I wasn't really concerned about what was standard practice, more about what was "reasonable".

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Reply # 1617012 24-Aug-2016 20:04

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Never enter into any argument, let alone heated argument, as far as humanly possible, especially if they are likely to be marking you! (And quietly, just between you and me, more likely to be correct.)

Swype on iOS is detrimental to accurate typing. Apologies in advance.

minimoke

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Reply # 1617016 24-Aug-2016 20:17

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I've done a similar course and loads of furniture in the house is stuff i've made and surplus I've flogged off with orders for the remaining stuff if I want to quit it.

Your lecturer is absolutely right. You will always underestimate your time and it will always take longer than anticipated. Something will always go wrong (an example for me was i thought my plane blade was in good nick, but it wasn't so I had to spend time going out and getting another) or take longer than you anticipate. I'd have though 10% was conservative.

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Reply # 1617020 24-Aug-2016 20:40

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But then it's not wastage, it's contingence.

Speaking from a systems point of view we know there will be occasions in which the design specifications or requirements will change mid-project. This means that sometimes the client will need something extra "that will take only an extra day". You account for this contingence.

Now if you screw up your project and have to redo some work (or the entire project) it's not the client's fault, and the client shouldn't have to pay for it.

There's liability insurance for these cases, which some clients will demand in large projects.

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kjae738

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Reply # 1617037 24-Aug-2016 20:58

Disrespective:

Perhaps wastage isn't the right term for giving yourself some breathing room on the construction time. In my world you would typically assume lost time due to ignorance/innocence would be bundled into the general margin on the project.

Of course nobody wants to pay for someone not doing the work as fast as humanly possible, but mistakes will be made, and this shortfall must be made up somewhere. If you, as the tradesperson, have made the mistake then the extra time costs will be eaten out of the total profit margin you intended to make at the end.

That's what I believe too, the lecturer made this way too complicated when he gave an example of the senario that would fit into the above question. His example was if you drove to the hardware store to pick up the items and on your way something happens (flat tire, accident or traffic jam) it is up to the client to cover for the time he spent "wasting" fixing the problem. Well personally I grew up believing that as you grow older you have to take responsibility for your actions and mistakes, and this kinda contradicts that in a way. What are the boundaries that makes the difference whether the client is responsible or the tradesperson's.

networkn

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Reply # 1617040 24-Aug-2016 21:16

kjae738:

Disrespective:

Perhaps wastage isn't the right term for giving yourself some breathing room on the construction time. In my world you would typically assume lost time due to ignorance/innocence would be bundled into the general margin on the project.

Of course nobody wants to pay for someone not doing the work as fast as humanly possible, but mistakes will be made, and this shortfall must be made up somewhere. If you, as the tradesperson, have made the mistake then the extra time costs will be eaten out of the total profit margin you intended to make at the end.

That's what I believe too, the lecturer made this way too complicated when he gave an example of the senario that would fit into the above question. His example was if you drove to the hardware store to pick up the items and on your way something happens (flat tire, accident or traffic jam) it is up to the client to cover for the time he spent "wasting" fixing the problem. Well personally I grew up believing that as you grow older you have to take responsibility for your actions and mistakes, and this kinda contradicts that in a way. What are the boundaries that makes the difference whether the client is responsible or the tradesperson's.

Easy, acid test. Would this have happened if I wasn't working on this clients job, and is it of direct benefit to the client. In the Tyre situation, answer, yes and no, so it's not billable to the client.

kjae738

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Reply # 1617044 24-Aug-2016 21:23

@ Networkn it seems reasonable to charge or have in place a margin in case of unforeseen and natural problems. I'm disgusted at the fact that it is "standard practice" to add 10% to the labour. Why should a client be ready to pay 20hours more than required if the tradesperson only requires 200hours.

@joker97 because I like arguements with lecturers in situations where I don't particularly agree with. I don't believe "because of the way things are" to be the reason to rob clients of their money.

@minimoke if the tradesperson underestimated the time required to make something, originally stating it would take him/her 200hours but in reality it took him 250hours is it up to the client to pay for 50hours of work if the reason for delay was due to the tradesperson's mistake? If it was uncontrollable such as weather and other unforeseen problems, I could understand, but in the arguement was "wastage" due to carelessness and mistakes by tradesperson.

@freitasm I'm not familiar with systems point of view, but they seem to have the right idea. Yes, contingence can be a factor when giving quotes but adding time for "time that might be used or not" (wastage) shouldn't be a factor when writing a quote. Also can you explain to me how liability insurance work? Does the systems engineer payback the client of the cash he receives? What happens to the project?

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Reply # 1617046 24-Aug-2016 21:26

Maybe I misunderstood your meaning of "heated argument", but there are alternative ways of getting one's point across ...

Swype on iOS is detrimental to accurate typing. Apologies in advance.

kjae738

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Reply # 1617049 24-Aug-2016 21:31

"Easy, acid test. Would this have happened if I wasn't working on this clients job, and is it of direct benefit to the client. In the Tyre situation, answer, yes and no, so it's not billable to the client."

@networkn explain, I'm having a hard time understanding what you are trying to say. So in the tyre situation it's not billable because while this happened because I was working on this client's job and not a direct benefit to the client? But the tradesperson bills you anyway. That's what I mean, the client's shouldn't cover for the time wasted, and for the tradesperson to add 10% to labour to accomodate wastage is incentivising slow work load. Which I'm having trouble comprehanding.....

kjae738

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Reply # 1617054 24-Aug-2016 21:37

@joker97 I'm just having a really tough time grasping the tradesperson's mindset. Normally, where I currently work, I get paid for the amount of hours I've worked that week. I don't add 10% to the hours I've worked to justify if I was late or not. If I was late to work it's deducted from my hours. But in trades they seem to add to the quote some weird things, such as the example I show above.

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Reply # 1617059 24-Aug-2016 21:54

kjae738:

@joker97 I'm just having a really tough time grasping the tradesperson's mindset. Normally, where I currently work, I get paid for the amount of hours I've worked that week. I don't add 10% to the hours I've worked to justify if I was late or not. If I was late to work it's deducted from my hours. But in trades they seem to add to the quote some weird things, such as the example I show above.

Fully agree with you.

Swype on iOS is detrimental to accurate typing. Apologies in advance.

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Reply # 1617071 24-Aug-2016 22:21

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I'm a software developer so although not the same field, some of the same arguments apply. As Freitasm said, it's not uncommon to add contingency to the work I am delivering. This is decided on complexity, familiararity and sometimes the customer (some customers don't really know what they want until you give them what they asked for). This can be somewhere between 10% and 50% as a small job sometimes has no wiggle space.

Most of what I do is time & materials not fixed price and this is where it may differ, I estimate slightly higher to avoid having to go back to the customer for a small increase towards the end. The customer only pays for the time it takes.

In answer to your question, adding 10% is not uncommon or unreasonable if it's done upfront. Giving a price knowing you are likely to add 10% at the end is bad practice and will not win referrals. While you are learning, you sometimes may need to write off some time/materials to keep a customer happy, especially if you have really messed up. The only time this is different is in a prototype scenario where it is something new and unique but both should have an understanding where the line is and when to stop (like bidding at an auction).

In any industry, you should not expect a customer to pay for incompetence, I'd expect any trade to own up to mistakes and learn from them. If someone keeps making schoolboy errors, they are perhaps in the wrong job.

Good for you learning an important trade, try not to disagree too often with a tutor, they are the key to you progressing. Remember they are there because of the experience they possess. If you don't like the word wastage, don't use it, just add your 10% in the cost and if you come in under budget, the customer will be very happy.

Procrastination eventually pays off.

freitasm

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Reply # 1617075 24-Aug-2016 22:35

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kjae738: @freitasm I'm not familiar with systems point of view, but they seem to have the right idea. Yes, contingence can be a factor when giving quotes but adding time for "time that might be used or not" (wastage) shouldn't be a factor when writing a quote. Also can you explain to me how liability insurance work? Does the systems engineer payback the client of the cash he receives? What happens to the project?

I mean actual insurance - from an insurance company. In case you completely screw up the work, or your company folds then the insurance will cover the costs of refunding the client.\ - obviously if it was not intentional, etc. I am sure there are lots of conditions.

But yes, read @starblazer post above. Of course not everything in IT can be applied to handmaking goods but there are some similarities.

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kjae738

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Reply # 1617078 24-Aug-2016 22:41

StarBlazer: I'm a software developer so although not the same field, some of the same arguments apply. As Freitasm said, it's not uncommon to add contingency to the work I am delivering. This is decided on complexity, familiararity and sometimes the customer (some customers don't really know what they want until you give them what they asked for). This can be somewhere between 10% and 50% as a small job sometimes has no wiggle space.

Most of what I do is time & materials not fixed price and this is where it may differ, I estimate slightly higher to avoid having to go back to the customer for a small increase towards the end. The customer only pays for the time it takes.

In answer to your question, adding 10% is not uncommon or unreasonable if it's done upfront. Giving a price knowing you are likely to add 10% at the end is bad practice and will not win referrals. While you are learning, you sometimes may need to write off some time/materials to keep a customer happy, especially if you have really messed up. The only time this is different is in a prototype scenario where it is something new and unique but both should have an understanding where the line is and when to stop (like bidding at an auction).

In any industry, you should not expect a customer to pay for incompetence, I'd expect any trade to own up to mistakes and learn from them. If someone keeps making schoolboy errors, they are perhaps in the wrong job.

Good for you learning an important trade, try not to disagree too often with a tutor, they are the key to you progressing. Remember they are there because of the experience they possess. If you don't like the word wastage, don't use it, just add your 10% in the cost and if you come in under budget, the customer will be very happy.

Thank you for your answer, your answer helped me grasp some of traders mindset. I wasn't trying to disagree with the tutor, it was more of me not grasping and fully understanding the traders mindset. I guess I was wrong in this case, while wastage wouldn't be the proper use, it's always better to have some wiggle space then no breathing space at all. I hope when I join the trades I would like to be more upfront about contingencies with my client, and client too understands why it is important to have contingencies.

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