Dynamic Estimating: Increasing Profits by Increasing Accuracy

Blog Dynamic Estimating

While the home building industry has generally been slower than others to adopt new technology, today’s market conditions are requiring builders to reassess their systems and processes to become a more profitable and efficient builder. As a result of this trend, we’re seeing more builders take advantage of dynamic estimating to increase their bottom line.

Traditionally, builders have estimated material requirements in more of a static way: count, calculate, and store for every plan. This can be a slow error-prone process. You perform the takeoff with each plan, make the necessary calculations, and then manually enter this information into a system. Any time a designer comes back with changes, it’s back to step 1.

Becoming a more profitable builder with dynamic estimating

With dynamic estimating, you’re developing the logic that converts measurements into very specific items that you purchase, and you do this with a process instead of static spreadsheets or data within an ERP system. Because you’re tying any changes to a process instead of to numbers in a spreadsheet, one change propagates throughout the whole system.

For example, if you have a new labor surcharge on the brick needed to build your homes, each plan needs to be updated individually. With dynamic estimating, information is updated once and flows throughout each house plan to produce a bill of materials (BOM) and purchase order in minutes—accurately.

By deploying only what your business needs, dynamic estimating provides tools for efficiency improvements as well as the data visibility and analysis that will empower you to reduce costs, increase net margins, and scale operations without adding staff—all while reducing cycle times, minimizing variance, and closing homes closed.

Through dynamic estimation, you can easily manipulate calculations and selections without going back to your takeoff each time a change occurs in your design. And you can import various takeoff methods such as spreadsheets, 2D takeoffs, and 3D BIM models, apply the estimating logic, and export BOMs for each plan a builder is working on.

As our industry continues to incorporate advanced technology in productivity measures, it’s vital that we become more predictive and proactive in evaluating our workflows to increase efficiency and effectiveness. Simpson Strong-Tie’s Pipeline estimating logic software creates an interactive experience with ERP software such as ECI’s MarkSystems to create more accurate and intelligible builder specification sets. By creating synergies between the platforms, MarkSystems ERP and Simpson Strong-Tie will make it easier for residential builders to forecast material requirements and reduce variances and project times, ultimately helping them drive down costs.

Watch the on-demand webinar “Improve Accuracy and Profitability using Dynamic Estimating” to learn more.

Scott Lang

About the Author

Scott Lang consults with homebuilders and lumber and building material dealers to help them understand how dynamic estimating, combined with industry standard systems, can help them realize significant gains in efficiency. To help explain software solutions to potential clients, Scott relies on his degree in Computer and Electrical Engineering from Purdue, as well as 8 years writing software, 10 years of experience in the homebuilding industry and several years of experience selling software to companies of various sizes.