I need an explanation for this Management question to help me study.
“First Come, First Served”: Resource Challenges for Sunrise Restorationt
Sunrise Restoration and Remodeling is a small, pri- vately-owned construction business specializing in restoring residential properties that have been dam- aged by fires and floods. Sunrise has a few dedicated project managers working diligently to oversee clean-up and reconstruction for many properties at a time. Each customer’s project is unique, depending on the extent of damage and scope of work. Once Sunrise sends an estimator out to assess the scope of work, the project is transitioned to a project manager for completion.
Much of the restoration work is completed by expert construction workers who are subcontracted by Sunrise Restoration. It is very challenging to find high-quality, reliable, consistent, and available contractors with the number of homes in need of repairs. Sunrise has worked with many companies only to find that they cannot use them again because they rushed through a job and the quality of work was terrible. Their database of approved contractors is very limited and diminishing. They are constantly looking for new subcontractors, but finding good options is usually the result of trial and error. This inconsistency and lack of available subcontractors has led to challenges in providing realistic time estimates for jobs (different contractors provide varying time estimates). Completing jobs on schedule has been challenging.
Due to the continuous demand for technical con- struction resources, Sunrise has recently hired two techni- cians on staff full-time. These technicians are generalists who can perform many construction activities, but they each have their own restrictions according to levels of expertise and physical limitations from past injuries. Therefore, although each technician is available 40 hours per week, they are not able to complete some tasks. Techni- cians are intended to be a supplemental human resource, working in addition to the subcontractor experts.
Sunrise Restoration and Remodeling wants to keep project costs low and profit margins high. To incen- tivize project managers to keep costs down, the owners pay project managers a commission for coming in under budget and a percentage of the difference between the
budgeted project amount and actual costs spent. The commission is paid upon project completion. Therefore, the project managers are constantly seeking the cheap- est resources they can find without sacrificing quality standards and they want to finish projects as quickly as possible. It is up to the project managers to find subcon- tractors for their projects and they do not like to share with the other Sunrise project managers. For completing work, they also want to use the in-house technicians as much as possible because the labor hours billed to their projects are much lower than the subcontractor rates.
It is obvious that the Sunrise project managers are competing among each other for external resources: low- cost, high-quality, and fast subcontractors. Additionally, they are experiencing increasing conflicts as they all want to utilize the same two Sunrise technicians. Company owners established a “first come, first served” policy when it came to project managers reserving the two in-house technicians. Often, the first project manager to assign a technician to a specific job site on a specific day and time has priority for that technician to work on their projects. One project manager, Tyler, was getting very frustrated with another project manager, Ken, for continuously tak- ing both technicians for his own jobs, leaving Tyler’s job sites without technician support. Ken often called the technicians and got verbal confirmation of their availabil- ity for weeks at a time, leaving them available for every other project manager for only a few hours each week. As a result, Tyler’s subcontractor costs and total project costs were quickly rising, and so were his frustrations.
Sunrise also owned equipment, stored in their warehouse, to be utilized for cleaning or drying dam- aged job sites. One morning, Tyler called one of the technicians, Dave, to go pick up an industrial air mover and a dehumidifier from the warehouse before meeting him at a job site. Dave agreed. (Per Sunrise’s “first in line” policy, Tyler verified at 5:00 pm the day prior that the equipment was there to use.) Soon enough, Dave called Tyler explaining that the equipment was not at the warehouse because Ken took it to use for one of his
projects. Ken got to the warehouse first. Now, Tyler’s project would experience a one-week delay because no other work could be done until cleaning is completed (a 3-day long task) and Tyler won’t have a technician available for his projects until early next week.
Frustrated, Tyler brought his concerns to the Sun- rise owner: “I don’t know why we have to share techni- cians. The process for assigning them on a first come, first served basis isn’t working for me. It’s not working for getting cleaning equipment to my job sites, either. I think we need to buy another set of cleaning systems. We also need more technicians. On top of everything else, Ken has now started poaching my subcontractors for his jobs- he took my tile guy yesterday. We are con- stantly competing for the same resources.”
The owner responded to Tyler, “Well, this is the way we’ve always done things and nobody else has ever complained. A little competition never hurt anyone. I like that you all have a sense of urgency to get your jobs completed, but I don’t have any more money to hire technicians or buy more equipment. What if I were to get the extra people and cleaning machines, but they just sat idle in the warehouse? I can’t afford that. I’m open to suggestions, but I don’t have a lot of money to invest in some fancy project software. You know it’s up to you to find your own subcontractors as well. Come back to me when you have a solution instead of a pile of problems.”
Case study Questions :
1. Describe some of the resource constraints that Sunrise and its project managers are facing.
2. Is Sunrise’s current method of prioritizing resource assignments viable? Why or why not?
3. How could technology alleviate some of Sunrise’s resource management issues?
4. Would Tyler’s suggestion to hire additional technicians and purchase more equipment solve the resource problems at Sunrise? Why or why not?
5. Put yourself in Tyler’s position and make a one page proposal for the Sunrise owner. Outline the current issues b riefly with corresponding detailed recommendations for action. Your actionable improvements must be specific, address your (Tyler’s) concerns, align with the owner’s priorities, and outline the benefits of your solutions in a persuasive manner.