The Need for Speed No situation may be as illustrative of how quickly Morris can deploy the company’s resources as its weekly Monday meetings. All of the project managers, major subcontractors, and suppliers walk Morris through each line item of the company’s jobs. “It gives us an idea of where everybody will be for the next four weeks,” Morris says. “If we have a conflict, I can move people around. For instance, if we have a greater need for carpet at a site in Savannah, Ga., I can move our carpet guy from Calabash, N.C., to Savannah.”
Morris can do this because he and Jeff Bostic own two-thirds of Carolina Apartment Products (CAP), its primary supplier, and has longstanding agreements with its subcontractors. During the past 10 years, Bostic Construction has brought on product managers to purchase supplies, such as plumbing, insulation, flooring, hardware, shelving, doors, and stairs, and prepare them for installation. While Bostic Construction is CAP’s main “customer,” Morris would like for it to sell to more outside builders.
In addition, most of the subcontractors joined the company in the early 1990s, when Morris promised steady work if they agreed to a flat fee. These subcontractors give Bostic Construction predictable costs and allow it to skip the bid process for each job.
However, the company’s most valuable asset may be its speed. Because the framers, bricklayers, concrete pourers, and drywall hangers have worked with Bostic Construction for so long, the familiarity leads to speed and efficiency. “These guys are world-class sprinters for us,” Morris says. “They have always set the pace. They feed on the volume we provide, and they love knowing where everything is.”
Building Models
CAP’s role at Bostic Construction goes beyond that of a mere supplier. The partnership allows the company to construct unit mock-ups in a 140,000- square-foot warehouse in Sanford, N.C., which improves efficiency and speed. By building a model unit ahead of time, the company knows the quantity and size of each product it will use. Mock-ups also can reduce errors that may come about in the construction process, such as a framing mistake. “My framer is so fast that he can frame 300 units in three weeks,” Morris says. “If there is a mistake, it will be repeated in each unit. If we eliminate mistakes in the beginning, we don’t have to go back and fix them. Going back to fix them takes time, something you don’t budget for.”
Having to assemble a faucet or cut carpet at the jobsite also can slow subcontractors. For example, Bostic Construction uses the measurements from the mock-up to cut each piece of carpet for a project in the warehouse. When the carpet gets to the jobsite, all the installer has to do is lay the carpet in the correct room. “The beauty of it, particularly with something like carpet, is that your carpet installer is not unloading it in the parking lot, cutting it there, and wasting time,” says Jeff Bostic, president of Bostic Development and vice president of Bostic Construction. “When you can avoid doing little things like that at the jobsite, it saves you time and money.”
These efficiencies can add up over time. In fact, one of the company’s investors, Ken Brown, marketing director of Carpets of Georgia Inc. and American Home Showplace, both in Dalton, Ga., thinks these efficiencies will help the company, at least temporarily, survive in a weaker economy. “With its cost efficiencies, it has turned multifamily building into a science,” he says. “While some people may need a 90 percent or 95 percent occupancy to get a good return, Bostic Construction can still get a good return on lower occupancy because they build so efficiently.”
When the different components of the company’s organization – vertical integration, mock-ups, and preassembly – are added up, it can mean noticeable time savings in the construction process. A good example of this is in Auburn, Ala., where it is building a 192-unit off-campus student apartment. Framing began in late April, and the project should be finished in late July. “Ordinarily, this will be a 12-month job, but we can do it in five months,” Morris says.
This process has helped the company earn confidence of its long time associates in the financial industry, such as Central Carolina Bank (CCB), the company’s primary bank since 1991. “Bostic Construction has systems in place where it can build cheaper than the typical builder,” says Al Garvey, commercial real estate manager for CCB. “This certainly helps it cut down on its carrying costs and build quicker.”
