Technology Reduces Material Redeliveries and Pickups

Before implementing new technologies, the construction industry has a strong need to understand exactly how a solution will fit into the business and what benefit or return on investment can be expected. As with all technology, there are some who are early adopters and others that follow along after it’s proven.

Shingles on rooftop

A building products distributor headquartered in the northeastern U.S. first learned of aerial roof measurement reports after their vice president attended the International Roofing Expo. It was there that he was introduced to EagleView, the company that invented and patented the technology in 2008.

When he was first approached about incorporating EagleView Roof Measurement Reports into the company’s business process, the vice president understood that the technology could be a very powerful resource. He agreed to participate in a trial program to track and measure the impact that aerial roof measurement technology could have on the business.

The Technology

EagleView Roof Measurement Reports were created in 2008 and later patented by EagleView Technologies, the leader in aerial imagery, data analytics and GIS solutions serving multiple industries.

The measurements in EagleView reports are derived from patented 3D technology and high-resolution EagleView imagery (formerly Pictometry). The patented technologies and algorithms ensure that the numbers are extremely accurate. The reports provide exact measurements for the entire roof including pitch. The length diagram includes detailed measurements for ridges, hips, valleys, rakes, eaves, flashing and step flashing. Waste can be easily determined using the calculations provided on the waste table.

The reports are available for both residential and commercial properties and are delivered via email as a .pdf file. Contractors have the ability to customize a cover page creating a powerful, professional presentation. Reports can be ordered online or via one of EagleView’s mobile apps and the only information needed is the property address.

Evaluating Existing Conditions

The first thing the distributor’s vice president needed to do was to invite a group of contractors to participate in the trial and to analyze the number of redeliveries and pickups related to their accounts. He lined up seven contractors who agreed to use the measurements provided by EagleView when placing material orders for their jobs.

The number of new job deliveries for the group during the prior month was 25. This group consistently required redeliveries on average for 46 percent of their jobs and needed materials picked up on an average of 37 percent of their jobs.

With an average shingle job value of $3,500, the 25 jobs represent nearly $90,000 in sales, or $22,500 in gross profit (assuming the company wants to obtain a profit margin of 25 percent). However, the gross profit starts to diminish when costs of redeliveries and pickups are taken into consideration. The cost of sending a truck to a job site varies depending on traffic, tolls, and time spent offloading and strapping back up, but it averages about $100 to $200 each time.

The distributor had to redeliver materials on 14 of those 25 jobs, resulting in costs of $1,820. An additional $1,300 had to be subtracted due to material pickups for overages. That $22,500 gross profit has now been reduced by $3,120, or a drop of nearly 14 percentage points, or more than three percent of total sales. These small costs added together equaled roughly the value of one shingle job, essentially reducing the number of sold jobs from 25 to 24.

The number of redeliveries and pickups experienced by the distributor were a result of inaccurate measurements. If a roof is not measured correctly or accurately, the amount of materials ordered will be incorrect, either over or under the actual amount needed. That’s not to suggest that the roofing contractors didn’t know how to measure a roof; they certainly do. However, the chance for error increases when measurements are gathered manually. In these situations, numbers may be transposed or mistakes made when determining the measurements.

The distributor decided to evaluate the use of aerial measurement technology over a six-week period and would keep track of the number to see if the use of EagleView Reports instead of hand measurements had any effect on material deliveries, redeliveries, returns, and pickups.

The EagleView Effect

In theory, if contractors use the precise measurements provided by the EagleView Report for every job ordered, the result for the distributor should be more accurate material orders. With more accurate orders, the expected result should be a reduction in the frequency of redeliveries and pickups.

After implementing EagleView Reports into their process, the distributor vice president tracked the contractors’ activity over a span of six weeks. He found that the seven contractors brought 31 jobs during the evaluation period, and there were only two jobs that required redeliveries. What was even more astounding is that there were zero jobs that needed materials picked up for return.

The 31 jobs equaled just about $110,000 in sales, or $27,500 gross profit (assuming 25% profit margin). With only two redeliveries, the distributor experienced minimal additional costs of only $260, with a less-than one percentage point reduction in gross profit. In the month prior to the contractors using EagleView reports for material orders, a 25 percent profit margin was reduced by three points to 22 percent because of pickups and redeliveries. During the trial program, the accurate measurements provided by the EagleView reports kept the gross profit percentage at 24.8 percent.

The vice president said it was a win-win situation for everyone involved. “The contractors are positioned as more professional with a nice presentation and the distributor benefits from the material delivery accuracy,” he said. “Feedback from the contractors was positive. They were very satisfied with the response times, saying they were able to cut down their lead times for generating estimates, and the reports served as a great presentation tool.”

The vice president was quickly able to understand the value that this tool would bring to his company. The distributor is promoting the use of EagleView Reports to contractors, encouraging them to incorporate their use as standard operating procedure for every job.

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