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Aussie
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  Reply # 1617081 24-Aug-2016 22:44
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In the cabinet-making business (where I'm currently employed painting kitchen/bathroom/corporate cabinetry at a furniture polishers) wastage does apply to labour. The amount of time to re-cut a piece, re-sand a piece, re-paint a piece, is 90% labour/time and 10% materials. There's various reasons for it, but as an example, 3 pieces of dust in a satin finished drawer front means a rework. 3 pieces of dust in a gloss finish means the extra labour for a polisher. 3 pieces of dust on a high end clear-coat, rework.

 

Lump in the material (common in MDF, melamine products), re-sand, re-prime, re-paint. Or rebuild. 

 

Dust, bad materials, cutting faults happens, who pays?  Because if it's not charged to the end user, everyone just chases it down the chain until prices get higher at the supplier end and, as it's impossible to keep things 100% perfect at ANY stage, customers will pay more than 10%in the long run.

 

I know of a company with a $100,000 paint matching machine, and they WILL NOT guarantee a perfect match, due to variance in base products. 

 

 

 

Lucky you're not in the glass industry, they account for 20+% in breakage, and charge accordingly!


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  Reply # 1617087 24-Aug-2016 22:53
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kjae738:

 

"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.....

 

 

 

 

Let me put it another way. If anyone else doing the same job would have had the same problem, it's billable to the client. 

 

(If they had booked another cabinetmaker would they have likely faced tyre changing costs, or tools not suitable for job etc)

 

 


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  Reply # 1617115 25-Aug-2016 01:49
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In any field, the customer pays for the time spent working on the project. The supplier provides an estimate or a fixed-price quotation for doing the work; I'm talking about the Labour component.

The estimate includes some provision for rework due to mistakes, changes to requirements etc. the estimate is meant to be indicative of the expected cost, so the customer knows, within reason, what they will be paying. The actual charge is for all of the time worked.

The quotation is fixed; the customer knows exactly what the final charge will be up front. When calculating the fixed-price quotation the supplier factors-in the contingency up front, and accepts some risk due to his/her expertise and experience. The customer knows he/she will probably pay more than for an estimate, but has absolute certainty of what they will pay.

If the supplier is good, the customer will pay less in a T&M situation and more for a fixed-price project. In my line, customers with a relationship with us like T&M and newer customers and the Government like fixed-price. I make a higher per-project margin on fixed-price.

I don't charge my customers to learn, or to fix mistakes that are inside my control; the former is built into my charge rate and the latter is being professional.




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  Reply # 1617120 25-Aug-2016 07:00
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blakamin:

 

In the cabinet-making business (where I'm currently employed painting kitchen/bathroom/corporate cabinetry at a furniture polishers) wastage does apply to labour. The amount of time to re-cut a piece, re-sand a piece, re-paint a piece, is 90% labour/time and 10% materials. There's various reasons for it, but as an example, 3 pieces of dust in a satin finished drawer front means a rework. 3 pieces of dust in a gloss finish means the extra labour for a polisher. 3 pieces of dust on a high end clear-coat, rework.

 

Lump in the material (common in MDF, melamine products), re-sand, re-prime, re-paint. Or rebuild. 

 

Dust, bad materials, cutting faults happens, who pays?  Because if it's not charged to the end user, everyone just chases it down the chain until prices get higher at the supplier end and, as it's impossible to keep things 100% perfect at ANY stage, customers will pay more than 10%in the long run.

 

I know of a company with a $100,000 paint matching machine, and they WILL NOT guarantee a perfect match, due to variance in base products. 

 

 

 

Lucky you're not in the glass industry, they account for 20+% in breakage, and charge accordingly!

 

 

 

 

@blakamin For glass industry they account 20+% for breakage but will that include the cost if you are the sole reason for breakage. For example if you had finished making an object with glass but after it hardenes, on your way out you accidently hits the desk and the glass falls and breaks. Does the 20+% account for negliegence/innocent mistakes but the tradesperson? I know that glass sometimes breaks on its own and maybe the 20+% is to cover for that. I'm not really too sure.


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  Reply # 1617167 25-Aug-2016 08:39
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Wow, OK, so this grew in conversation since my answer/opinion. Some really good points have been made.

 

I think @networkn is pretty sharp on it though.

 

And I used the term ignorance/innocence somewhat flippantly I think. Also in some ways how I used the word margin, too. My contracts do contain a contingency sum for items that are unforeseen.

 

An example of this that I recently encountered is where some slippage occurred on a building site, and a day was spent clearing this before trucks and work could continue on site. This cost money, and was completely unforeseen, but was integral to the project being completed. I don't believe having a flat tyre on your way back from the hardware store would fall into this but there is an argument around it.

 

The contingency sum itself is agreed upon before the contract is signed and prices locked in. So it is factored into the contract price, but does not necessarily get used. At completion of the job, if no contingency sum has been used (never happens), then the client gets a cheaper job, however they are mentally primed to have already spent it from the start of the work.

 

I suspect if you were making a on-off piece for your client then you would need to allow a larger contingency sum than if you were making your hundredth wall unit in the month.

 

 


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  Reply # 1617172 25-Aug-2016 08:43
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freitasm:

 

 

 

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.

 

 

 

 

Contract variation!

 

Customer pays. 

 


Why is it that lawyers get to charge for every 15 minutes but IT people don't?


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  Reply # 1617235 25-Aug-2016 10:44
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surfisup1000:

 

freitasm:

 

 

 

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.

 

 

 

 

Contract variation!

 

Customer pays. 

 


Why is it that lawyers get to charge for every 15 minutes but IT people don't?

 

 

 

 

We charge in 15 minute blocks!

 

 


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  Reply # 1617353 25-Aug-2016 13:23
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A better approach is to work out cutting plans, then budget for the sheets or lengths you need, knowing that some will be offcuts/wastage.

 

Customers shouldn't directly pay for extra time or materials due to unreasonable errors by tradesmen.  Those should come out of the margin on hourly rates and materials across the business.





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  Reply # 1617380 25-Aug-2016 14:07
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Perhaps @MikeAqua is more in context to the trade.  Just because you need 10 metres of wood for a job, doesn't mean you only need to buy 10 metres of wood.  If you need 4 lengths of 2.5m but the wood comes in 3m lengths there is 4 x .5m that you have to buy but can't use which is an accurate description of wastage in my opinion.

 

 





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  Reply # 1617575 25-Aug-2016 20:40
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kjae738:

 

 

 

 

 

@blakamin For glass industry they account 20+% for breakage but will that include the cost if you are the sole reason for breakage. For example if you had finished making an object with glass but after it hardenes, on your way out you accidently hits the desk and the glass falls and breaks. Does the 20+% account for negliegence/innocent mistakes but the tradesperson? I know that glass sometimes breaks on its own and maybe the 20+% is to cover for that. I'm not really too sure.

 

 

It covers everything... Glass that breaks on the truck, glass that breaks in the factory, glass that breaks while being installed. It's the way businesses work.

 

If you send your cabinet out to be stained, you don't know how many people are handling it. One mistake from anyone, ANYONE, whether it be the lacky on the forklift, to a tradesperson, gets covered. Sometimes what you call "Negligence" is just a mistake. Humans make them. Negligence is measuring wrong, not an accidental knock in a factory that causes damage. That's what the 10% is for.


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  Reply # 1617884 26-Aug-2016 14:05
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StarBlazer:

 

Perhaps @MikeAqua is more in context to the trade.  Just because you need 10 metres of wood for a job, doesn't mean you only need to buy 10 metres of wood.  If you need 4 lengths of 2.5m but the wood comes in 3m lengths there is 4 x .5m that you have to buy but can't use which is an accurate description of wastage in my opinion.

 

 

 

 

Exactly and the customer would normally be charged for 4 x 3m lengths.  Some places even offer you the offcuts if you want them.





Mike

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