For Productivity, It's About Time We Focus on Time!
As the electrical construction industry slowly emerges from the economic downturn, much has been written about the need to increase productivity and overall efficiency. In fact, the construction industry as a whole has been viewed in very unfavorable light in terms of matching the productivity gains of other United States industries and businesses. “Underperforming,” “flat,” and “multiple factors behind” are just some of the unflattering descriptions for construction performance in this area.
Electrical contractors face numerous challenges in the years ahead and trying to figure out how productivity and efficiency measures apply to their business, much less implementing them, need not be such a torturous struggle. Maybe we need to convert these outside measures into something that everyone in our industry understands: What has been a part of the electrical business since its beginning? Time! What does the electrical business feel comfortable measuring? Time! What typically makes up 30 to 50 percent of a project estimate? Labor hours or time! Or, looked at another way, what accounts for 30 to 50 percent of your sales dollars or the money you run through your balance sheet? Time!
Yes, from an organizational standpoint, it can be that simple. And from an organizational standpoint, simplicity and understanding can provide the impetus to a powerful focus. If something represents 30 to 50 percent of an organization, doesn’t it deserve a lot of attention? Think of the airline industry. Fuel now represents 40 percent of each airline company’s costs. It’s a big deal, and when the airlines tried to collectively just pass the cost of the fuel on to their customers, they almost all went bankrupt. At the same time, it’s now very easy to get each airline—from the CEO to frontline employees—thinking about reducing fuel usage.
So now that we are focusing on time, how are we in the electrical business dealing with time? Actually, with a fair amount of gusto! Building information modeling (BIM) and prefabrication are almost pre-requisites for the larger jobs, and numerous contractor managers and their employees are using tablet computers and various phones and apps to track and manage labor hours. Being able to quickly recognize that a job is even one hour above its estimated level is becoming more common.
This is excellent progress. However, these techniques have more to do with managing time—that is controlling labor hours, engineering hours, and prefabrication shop hours to the project estimates. What about significantly reducing time? This is by far the greatest opportunity for electrical contractors and the greatest hurdle.
In the manufacturing and heavy industrial world, business and quality guru Dr. Joseph Juran gave us his simple Juran Trilogy: Planning, Control, and Improvement. These major activities are part of each business function such as financial and quality, and each major activity requires different tools and methods. For example, in the area of control, a “sporadic spike” needs to be dealt with as a special cause that is not part of the prescribed operation. The huge gains in quality and productivity made by manufacturing companies were the result of focused improvement projects using specific improvement techniques that dramatically shifted process performance far beyond the normal boundaries of control (See Project Improvement Diagram below).
Tools for Project Hours Improvement
In the electrical construction world, we have project hours planning, project hours control, and project hours improvement. It is this latter activity—project hours improvement—that is lagging in our electrical business but represents the greatest opportunity. Dramatic reductions in project hours will only come about as a result of the right tools and methods that are implemented in a fashion that helps electrical work; all done within a company culture or environment that allows for these dramatic improvements to succeed.
What tools and methods are we talking about? The headliner is cycle time reduction (CTR). CTR is all about reducing time but in a grind-it-out, no-fancy-software way. Just like the name implies, CTR focuses on reducing the amount of time it takes to complete one unit of a product or service. It could be a focus on how long it takes to install one light fixture, how long it takes to install one length of conduit, how long it takes to engineer a particular project, or how long it takes to complete a particular service call.
Let’s face it: What contractor makes a living year after year by installing one light or one section of conduit? Typically, much electrical work—especially the big projects—involves the repetitious fabrication and installation of hundreds, if not thousands, of lighting fixtures or the installation of thousands of sections of conduit or hundreds of solar panels. While the location of each installation changes, the electrical business is much about doing repetitious work. And therein lies the gold of CTR: Significantly reduce the time it takes to install one unit and apply those efficiencies to every similar unit installed.
It is very important to note that CTR studies the actual work and actual process done by actual people, which means that it is not done in a conference room or by computer simulation. Would National Football League coaches prepare their teams by playing a video game? No, real coaches watch film of the real games and analyze specific positioning, timing, and reactions of the actual players. It is interesting to note that some companies have filmed their project work for further analysis but that occurs only after a thorough onsite study. Several other tools enhance the power of CTR. These are the seven types of waste and value-added/non-value-added. Both tools are used specifically for the analysis of the cycle time once all the data for the current process being studied has been gathered. In other words, make sure a detailed listing of the work performed, along with any distances traveled and materials used, has been captured on paper before digging into the waste. The types of waste (correction, over-production, motion, material movement, waiting, inventory, and processing) are very powerful if used in an organized and productive fashion. Observations of the application of waste reduction in the electrical business indicate that sporadic and inconsistent implementation have resulted in less-than-expected improvements to date.
Value-added and non-value-added can be used to analyze and improve a repetitive process and also can help dramatically improve a lesser occurring but longer process such as engineering a project. This tool asks “what does the customer want to pay for” and sheds great insight into what work tasks or steps may actually be needed and what steps can be combined or eliminated—thus reducing time.
Technical Aspects of Implementation
We have talked about the specific tools to use for project hours improvement. Now, what about that key step towards saving money called implementation? The two important areas here are the technical aspects and the behavioral/cultural aspects. The technical has to do with “getting it done” in the electrical contractor environment. Industries where the operations are more static, such as a manufacturing plant, have a bit of an advantage due to the ease and the length of time available to study the processes and make improvement. It is easier in a manufacturing plant to have a team of people work a week or more to improve a process, and they can come back a year later to make more improvement on the same system. Relative to our airline discussion—the airports don’t move!
In electrical contracting, projects are numerous and relatively short in duration and can be located anywhere within the business footprint of the con- tractor. Also, it’s very difficult to take managers, engineers, and workers away from doing the work for long periods of time. Moreover, we have the law of diminishing returns—the closer we get to the end of the project, any savings in time will be less than optimal. These structural givens are no doubt a part of the reason for construction’s lower productivity improvements to date.
It can be done! The experiences from companies making dramatic reductions in project hours point to accomplishing these improvements in a project-by-project fashion. In other words, it can be extremely difficult to try to reduce project hours in lighting installations across the board in one giant focus— typically there are differences in each project. However, a sharp focus on lighting installation on one project can be very successful. CTR can be accomplished within 1-2 days. Upfront planning can be used to organize this CTR effort at the start of the project with the participation of a minimal but key group of employees. The same activity can then be repeated for other projects. The key here is to adapt the time reduction tool to the circumstances of the business.
Behavioral and Cultural Aspects
Our discussion has focused on technical tools and the technical strategy, or battle plan, for implementation. But what about the people? What about the human element to this project hours improvement effort? Like all total quality management processes, CTR requires the participation and input of all employees involved in the process. Making dramatic project time improvement is not a tell. Rather, CTR involves those electricians doing the work, the engineers on the project, and all levels of management. Those wondrous “aha” moments of recognizing a path to significant improvement can only be reached by including the people directly involved on the project.
So how do you convince the veteran supervisor, the veteran project manager, and the veteran electrician to not only take a deep look at the work but that their ideas and suggestions will be implemented? A good part of the answer comes from the establishment of a conducive company environment for substantial improvement activity at all levels. An excellent example of this environment is the Toyota Production System with an inverted organizational pyramid. This inverted pyramid is simply “total organizational focus and support for the front-line employee.” Think of it as an organization chart turned upside-down.
It’s not a new organizational chart, just an attitude! What is the end result of every installment of the TV show “Undercover Boss?” Through tears and hugs, every CEO describes what they learned about the importance of the front-line work done by the employees and how the company bureaucracy actually makes it more difficult for these employees to be able to do their jobs and contribute to the bottom line.
What is actually needed is a graying of the lines of demarcation between all levels of the organization to improve communication, trust, and ownership. Having teams and team leaders is great, but the organization needs to have a beacon, a driving force of behavior. A companywide focus of supporting the front-lineworker—in our case, the electricians— accomplishes this. Remember when we recognized that upwards of 50 percent of electrical contracts consist of labor hours? This front-line employee support environment connects the dots between income and output.
With regard to productivity and efficiency, the electrical construction industry has a bright future if contractors can keep things simple and meaningful to the organization. After all, this business has been about time and people since its beginning. Just remember to include the Juran Trilogy and the inverted organizational pyramid to achieve those gains in productivity.
Wayne Niebroski is President of Pathways to Improvement, LLC, an Arizona company focused on implementing rapid improvements that reduce costs and enhance profitability. Prior to his current position, Wayne was a Quality, Manufacturing, and Employee Relations Executive in a Fortune 20 automotive company for 25 years. He is a certified Affiliate and Trainer of the Total Quality Institute in Reading, PA.
Niebroski’s session, “Improving Productivity to Win Bids and Increase Profit,” will take place Thursday, September 26 at 1:15 p.m. at the 56th Annual IEC National Convention & Electric Expo in Portland, Oregon.