Chapter Corner

Lean Construction Techniques Help Define Costs for More Competitive Bidding

Posted in: Features, January/February 2016

lightbulb.gifThose words are familiar to every independent electrical contractor who considers bidding on large, institutional projects. How does a contractor accurately bid on a project, considering the intensive work needed to assemble the thousands of products that route, support, protect, and terminate the electrical system?

Many electrical contractors are finding that adopting lean construction techniques allows them to estimate costs more accurately. As a result, 40 percent of electrical contractors now consider prefabrication and modular construction a core part of their strategic initiatives, while 82 percent of contractors use building information modeling (BIM) in some form and expect their BIM use to increase by 50 percent over the next two years.

It’s no surprise, then, that two-thirds of the top 50 electrical contractors have committed to using lean construction techniques. What is more surprising is that a third have yet to do so.

Lean construction methods for electrical systems installation include prefabrication and modular construction, which significantly reduce the extent of labor required at the job site. Electrical contractors typically make a net profit of two to three percent on facility construction projects, but can double that figure by increasing labor productivity by five to ten percent. Reduction in waste, such as parts and materials being scrapped and labor time being used inefficiently, is the purpose of lean construction.

Improving operational efficiency for electrical components installation has led to the use of rough-in systems that are specially designed made to order and project specific. These rough-in systems reduce a substantial number of touch points as well as the amount of waste. The goal is to supply the project site with only the minimal and essential amount of parts, materials, equipment, labor hours, and space to enhance the value of the project to the contractor.

In addition to the use of rough-in systems, costs may be reduced through the use of electronic tools that enable easy access to drawings and personnel for project planning; accurate estimates for initial costs; design tools, such as BIM; packaging and labeling that conforms tojob-site use; and the availability of parts, materials, and equipment through a widespread supply distribution network. An example of an electronic tool that integrates configuration of rough-insystems, cost estimation, BIM, packaging, and shipping is eFab™ by T&B®, an online tool that facilitates the design, assembly, and procurement of electrical boxes and related products under the Steel City® brand.

Installations in walls and ceilings represent a substantial portion of a facility construction project’s labor hours and profitability; reducing the former will enhance the latter. Whether the contractor is seeking to enhance profits or look for cost reductions that will enable more competitive bidding, both on-site labor and waste are critical.

Waste can be found in any materials, parts, space, or labor hours that exceed what is absolutely needed for a wall or ceiling installation. One method of using lean construction to reduce on-site installation labor hours is to have rough-in components, such as electrical boxes, pigtails, brackets, rings, and fittings assembled in advance to conform to the project’s specific needs. The use of preassembled rough-in systems can save as much as 50 percent of rough-in labor costs as well as provide a quick, easy, and safe wall or ceiling installation.

Another advantage of using preassembled rough-in systems is the reduction of parts and materials waste by reducing on-site inventory to only those assemblies needed for the specific facility construction project. The result is as much as a 40-percent savings in direct material costs. When these assemblies are shipped, packaged, and labeled specifically for the facility construction project, there is less waste in product packaging as well as fewer labor hours spent on material handling.

The use of online tools, such as T&B’s® eFab™ prefabricated rough-in assembly configurator, can facilitate determining the number and configuration of wall and ceiling assemblies, their packaging and labeling, and scheduling of shipment to occur one day before they’re needed. Online storage of computer-aided design (CAD) files, 3D models, proposals, bills of material, specifications, and quotations enables the contractor to have access to information about thousands of rough-in components for facility construction project planning.

The combination of using prefabrication and modular construction with BIM and online tools can save the contractor 40 percent or more on rough-in installations in facility walls and ceilings. These costs occur in both materials and labor throughout the whole operation: installation, job layout, material handling, and cleanup. 
Whether the contractor is seeking greater profitability or greater competitiveness, cost savings are possible with lean construction methods that improve the operational efficiency of electrical systems installations in facility construction projects.
Given the intensive labor needed to assemble thousands of products that route, support, protect, and terminate a facility’s electrical system, the benefits of lean construction are particularly significant for wall and ceiling installations. 
In addition to cost reductions, lean construction methods provide a more accurate accounting of what products are needed for the specific facility and installation. This enables the contractor to bid on the basis of what materials are actually needed without having to allow for waste. This accuracy gives the contractor the leverage to bid competitively, while ensuring that material costs will be covered.
Lean construction also increases profitability for the contractor by enabling greater operational efficiency in the allocation of parts, materials and labor. It also enables a more accurate accounting of what parts and labor are actually needed for the installation, which provides the contractor with information to make the bid more competitive while ensuring that the contract will be profitable if awarded. 
John C. Archer is senior program manager for eFab™ at Thomas & Betts, a member of the ABB Group. He holds a Bachelor of Science in architectural engineering from University of Memphis.