In Part 2 of this Verify Infield conversation, host Jacob Edmond and guest John Van Erem, Executive VP at Adams Group, dive deeper into the real-world strategies that separate high-profit millwork companies from the rest.
This episode goes beyond definitions and digs into plant vs. non-plant produced work, install pitfalls, margin per hour, and the silent killer—slippage. If your shop’s profitability feels like a mystery at the end of every year, this one gives you the math, the mindset, and the metrics to make real change.
About Our Guest
John Van Erem is a financial strategist and operations expert at Adams Group. He’s also an instructor with AWI, where he teaches cost modeling and project management with a no-BS, results-first approach. John is passionate about helping millwork teams use real numbers—not guesses—to improve margin, productivity, and profitability across the board.
What You’ll Learn in This Episode
- Plant-Produced vs. Non-Plant Produced Work: Not all revenue is created equal. Learn how high-profit shops generate more work in-house, reduce outsourcing, and keep their production floor full to protect their margins.
- Why Install Work Is a Profit Killer: AWI data shows that most firms lose money on installation. John explains why even high-profit firms take a hit and how smarter staffing and subcontracting strategies can reduce the damage.
- Margin Per Production Hour: The Metric That Matters: This is the metric every shop should track monthly. It ties contribution margin to your capacity and shows you how much value your team is generating per hour.
- Capacity: Your Shop’s Hidden Profit Driver: Understanding and filling your available production hours is critical. John shares how missing just 20% of capacity can cost a shop $1.4M per year in lost revenue and margin.
- Why Slippage Destroys Profit: Moving work out of a time slot without replacing it is revenue you’ll never get back. John outlines how to track slippage and why it’s the most overlooked threat to profitability.
- How High-Profit Firms Plan Jobs by Time Slot: The best companies don’t just sell projects—they sell time slots. This shift in thinking helps them forecast revenue, plan capacity, and prevent margin erosion.
- Strategic Project Pairing: John explains how you can offset low-margin jobs with high-efficiency ones in the same period to keep your average margin per hour on target.
- Why Indirect Labor Should Be Your Focus: Learn how indirect costs sneak up and kill your bottom line—and why moving tasks (like drafting and install) from indirect to direct cost categories can dramatically improve accountability.
- Tactical Change Orders & Install Billing: Struggling to get paid for rework, storage, or missed schedules? John shares how high-profit firms use proactive change orders—and bill for schedule changes—to recapture lost dollars.
- Year-End Surprise: The Real Cost of Slippage: John breaks down a shocking example of how slipping just 20% of production can flip your company from profit to loss—even if you hit your revenue goal.
Where to Learn More
- Get the full PowerPoint presentation here: https://drive.google.com/file/d/1cvF34bmYwQ9qYi8Wq8Mq0Wgram-H-kKt/view?usp=sharing
- Find out more about the AWI Cost of Doing Business Survey: https://awinet.org/codbs/
- Learn more about Adams Group: https://discoveradams.com/
- Follow John on social media
- LinkedIn: https://www.linkedin.com/in/johnvanerem/
Final Thoughts
What gets measured gets managed—and high-profit firms are measuring everything. From install losses to labor efficiency, John shows how data-backed decisions can stop profit leaks before they start.
If your shop is growing but the bottom line isn’t, this episode will help you rethink your math—and your model.
📌 Missed Part 1? Catch it here: https://duckworksmw.com/podcasts/if-the-math-aint-mathing-part-1-revenue-cost-and-margin