RESIDENTIAL: Building Based on Relationships

Summit Sheet Metal Ltd. installs complete HVAC systems for high- and low-rise residential buildings — all without having their own shop for fabrication. Photos: Summit Sheet Metal Ltd.

There was a time when Summit Sheet Metal Ltd. was working toward owning and operating their own shop.  But co-owner and project manager Phil McDonald said that the closer they got to that goal, the more they began to realize it didn’t make that much sense. The Port Coquitlam, British Columbia-based company has been able to operate lean and efficiently without a shop. While it might seem to buck the norm, McDonald said they’ve made it work to their success.

Summit installs complete HVAC systems for high- and low-rise residential buildings, as well as within the commercial and institutional sectors. They also do some custom work, such as architectural flashings. Though they don’t handle the fabrication in-house, they are able to supply the materials by working closely with another fabricator.

As far as why they decided against adding a shop, McDonald said it boiled down to a “pros and cons list” in which many more cons were in their minds. These included adding significant overhead costs like a larger building, new skilled labor, the purchase of machinery, extensive utility costs, and more. 

McDonald said that even the ongoing maintenance of the equipment was a big consideration. 

 

“For many years, we were working toward having a shop, but the closer we got to making it a reality, the more we saw the ways in which our business would have to change,” McDonald said. “We came to realize that owning a shop is almost like owning a second company, and it honestly just didn’t make sense for us.”

McDonald said that the company would have needed a building four to six times larger than what they were already in, and that alone was daunting. 

They handle a lot of projects (at press time, they had 16 going at once), and finding the space for the volume of fabrication they do began to seem unattainable. Yet, McDonald said they would constantly have to be taking on new jobs to maintain a healthy cashflow to afford the shop. 

Having shop employees would have also been a big change.

“In addition to the crew in the field, we currently have three office staff members: my business partner, myself, and our office manager,” he said. “If we added an office, we would likely need a foreman, someone handling data input and likely a sales team that could bring in enough work to keep the shop busy.”

While all signs have pointed toward the shop being a no-go, McDonald said that doesn’t mean it has always been easy. In fact, he said that it wouldn’t work had they not found the right shop to work with for their fabrication.

 

“Obviously, when you are relying on another company to do your fabrication, it has to be one that meshes with you and that you really trust,” McDonald said. “It took us a little bit, but we found a really good fit.”

McDonald said making it all work has largely come down to lots of planning.

“We constantly emphasize to our team that we must always be thinking ahead,” he explained. “When there have been emergencies, they’ve come through for us. But we’ve really focused on getting everything submitted in advance.”

Since the company’s crew all come from an installation background, he said that not having an in-house shop is of no impact to them. And he said that as long as the product produced is high-quality — and makes it to the jobsite in a timely fashion — clients are not concerned about where it’s fabricated. 

“This model might not work for everyone, but it has definitely been the right path for us,” McDonald summed up. “It allows us to focus on what we’re best at while continuing to operate in a lean and highly efficient way.”