Viability – Being a Low-Cost Producer

Viability is about sustaining long-term success across decades. For Reed Family Companies, that means consistently being a true low-cost producer: delivering quality projects at lower cost, while never compromising on service, safety, or integrity. This is how we set ourselves apart from competitors who may be bigger but not better.

Often the biggest producer isn’t necessarily the best as some companies can become impersonal, less responsive and more problematic as they grow. The key to our viability in this ever-changing market is to avoid becoming just another low-quality producer. That’s where we continue to set ourselves apart from most of our competition.

Most of our construction projects are what’s known as “low bid” projects. We win the bid by being the low bidder on bid day. A well-known phrase used in construction for decades is, “The bidder who makes the most mistakes…gets the job”. Although it’s both ironic and funny, there’s plenty of truth and risk in this phrase. We set ourselves apart not by cutting corners, but by tracking our competition’s bids, reducing errors in estimating, and continuously improving our processes. This discipline ensures we remain competitive while growing our market share and this is a key to our continued success for decades to come.

Once we win a bid it is critical that our thought process, during the bidding phase, is passed along to our construction teams in the most effective way possible. We do this through a handoff meeting between our estimating team and our construction team. The goal of this meeting is to clearly identify the risks and opportunities on a project before we even begin planning for construction. By communicating about the risks right out the gate, we limit that risk as much as possible so that it does not end up costing our company money. By discussing opportunities, we give our construction team a chance at not only building a project to budget but also a better chance at beating that budget and making more money for our companies. Although not perfect, we have streamlined this process over the years, and it shows in our bottom line.

Now comes what many people call the fun part, construction, the building of the project. When all goes well, which is about 50% of the time, we execute as planned, give a good quality product and make the money we planned on. 25% of the time things don’t go as planned and that’s where having good, experienced people makes the difference. We leverage that experience and our relationships with agencies to solve problems, manage the organized chaos and minimize profit fade while still serving our customers with respect and integrity. Finally, 25% of the time we capitalize on the opportunities previously identified, maximizing our production which lowers our operating costs. The end results is building a good quality project ahead of schedule with higher than anticipated profit margins.          

Remaining viable means more than winning low bids, it means executing smarter, building stronger, and creating efficiencies that keep us competitive for decades to come. Every project we complete is proof that being a low-cost producer does not mean being low-quality. Instead, it means discipline, innovation, and efficiency working together to secure our future. That’s the power of Viability as part of our SERVICE principles.