Tactical partners can help contractors adopt cost-saving Lean practices
There are a number of ways to grow an electrical contracting business.
Land more jobs. Expand your geographic base. Develop new specialties.
None, however, are as sure a route to growing profits as learning and adopting Lean construction practices.
Simply put, Lean practices, developed by Toyota in the 1950s and popularized by MIT researcher John F. Krafcik and others in the 1990s, is the art of reducing waste. Wasted materials. Wasted time. Wasted energy. The result is greater efficiency, lowered costs, improved safety, improved quality and improved customer satisfaction.
Lean practices have spread widely through manufacturing plants in all industries, resulting, in part, in more than a doubling of non-farm labor efficiency in some industries since the 1960s. Today, studies estimate that only about 12 percent of worker energy on a typical manufacturing floor is wasted.
The construction industry, on the other hand, has not been as quick to adopt lean practices, and statistics there tell a very different story. Various studies estimate that 57 to 66 percent of labor time on a typical construction site is non-productive, and a whopping 10 percent of construction materials are wasted.
The discrepancy is rooted in the fundamental differences in manufacturing and construction operations. A manufacturing floor is fixed. It is usually devoted to producing one or only a few different products. The labor force is relatively constant. All of that makes it easier to streamline manufacturing processes, introduce just-in-time parts inventories, educate the workforce on the new way of doing things and generally reduce the amount of wasted work and wasted space on the floor.
The Construction industry is the opposite. No two projects or project sites are exactly alike. Labor forces can shift significantly from one job to the next. Different projects may call for a different mix of suppliers with different ordering requirements and different abilities to meet timely demands.
In short, introducing Lean practices into the construction environment is challenging. Challenging, but far from impossible. The key to success is careful planning, targeted education and the selection of tactical partners who know how Lean processes work and are capable of supporting them, regardless of the variations inherent in construction jobs.
Becoming such a partner is the driving force behind eFab™, a creation of ABB Installation Products, Inc., formerly Thomas & Betts.
To understand how eFab™ or any other effective partner can help an operation achieve Lean efficiencies, it’s important to identify where the main causes of inefficiency exist on a typical construction site. Studies performed by Clemson Department of Construction Science and Management Professor Roger Liska found that efficiency is lost on construction sites due to three major faults:
n About 20 percent of efficiency is lost waiting for materials or equipment. Some of that time is lost trying to extract building materials jammed into overstocked and poorly organized staging sites. More is lost waiting for a supervisor to interpret drawings or to direct the next step in a vague process. More is lost shifting between multiple tools to build assemblies that could have been built more efficiently offsite.
n Another 20 percent is lost due to poor processes or poorly designed systems.
n Another 15 percent is lost by crowding workers into too tight an area or by assigning them to work on spaces that aren’t ready for their work.
eFab™ is designed to help electrical contractors minimize those inefficiencies by providing a system that is relatively easy to use and easy to adapt to any site, significantly cutting the variables that can be inherent in construction projects and, consequently, cutting into the learning curve that can be associated with adapting to a Lean system. The system is built around prefabricated rough-in electrical assemblies, combined with design help to streamline the process and just-in-time delivery to keep the worksite clean and clutter-free.
In short, this is how it works:
n Design. eFab™ engineers and consultants can work with the contractor to break plans into properly configured prefab elements for the walls, ceilings and floors. Assemblies can also be configured online in 3D or chosen from a selection of preassemblies. Ideally, workflows are also mapped and shipments of assemblies are planned to arrive in small quantities as needed, according to the work plan. For example, in a repetitive project such as a hotel, complete pre-assemblies might be boxed and shipped room by room, along with plans for installation.
n Pre-assembly. Assemblies are prefabricated by special teams at ABB’s Athens, TN, plant and packaged according to the specifications of each job.
n On site and on time. The order is delivered directly from the factory to the jobsite at whatever timing is deemed most efficient. For example, if crews can finish a complete floor in a few days, preassemblies for just that floor could be shipped, boxed for each room, so no staging area storage is required. The next shipment might be scheduled to arrive shortly before that floor is finished so the cycle can continue as efficiently as possible.
The result, when fully adopted, is a project with no crowding, no searching for parts, and quick-to-install assemblies that fit into an efficient and well-planned work flow.
The cost savings can be dramatic. For example, custom-designed assemblies of components can save more than 50 percent on in-wall rough-in installation costs, partly by speeding on-site work and partly by reducing waste. Special eFab™ assemblies can reduce overall material costs by up to 40 percent.
The potential effect on a project’s bottom line can be dramatic as well, even if the full potential benefits of Lean processes are only partially realized. One often-quoted researcher, Construction and Management Science Professor Lauri Koskela of the University of Huddersfield in the United Kingdom, estimated that an increase of only 10 percent in productivity in a company where labor payroll is 35 percent of total revenues can result in a doubling of net profits for a firm that’s used to operating on a 3 percent net.
Even with partners like ABB and eFab™, of course, a contractor who is new to Lean processes will experience a learning curve — the new workflows must be clearly communicated to work supervisors and crews, who need to get on board with the processes in order to maximize their efficiencies. But, since many Lean concepts are already inherent in the eFab™ combination of design, pre-assembly, and on-time delivery, it is much easier for most electrical contractors to achieve efficiencies that approach the efficiencies of the manufacturing industry, even on a hectic construction site.
ABB Installation Products is proud that its eFab™ product provides the opportunity to introduce Lean practices throughout the construction industry, assisting our electrical contractor customers to adopt efficiencies that drive cost savings.
“It’s important to learn from experience, not just with eFab and Lean construction but in contracting in general,” as Global eFab Market Development Manager John Archer puts it. “Typically, the first job with eFab leads to some improvements and some mistakes. The second is better. The third is better yet. The important thing is, once you go down the road of adopting Lean practices, you are always getting better.”
Colin Ross is the eFab™ group director for ABB Installation Products. Based in Memphis, TN, he and his team work with electrical contractors across the U.S. and Canada.
Matt Stevens, “Increasing Adoption of Lean Construction by Contractors,” Proceedings of the International Group for Lean Construction, Oslo, Norway, June 2014
T.M. Viana, et al., “Impacts of the Application of Lean Construction to Reduce the Generation of Waste and Improve Processes in Construction,” International Journal of Science and Engineering Investigations, May 2017
Donna Liquidara-Carr, McGraw Hill Construction, “Industry Perceptions of Lean Construction,” 16th annual Lean Construction Institute Congress, October 2014
L. Koskela, “Fifty Years of Irrelevance: The Wild Goose Chase of Management Science,” Lean Construction Journal, IGLC Special Issue, 2011
Rebeca Ayala, product manager, PlanGrid Construction Productivity Blog, February 2018