While there may be marginal improvement in the U.S. economy, the electrical contracting business has not yet recovered from a slowdown that has hurt businesses across the spectrum, often lowering margins and slamming once thriving businesses into painful contractions.
Despite the economic cloud still hanging over the industry, however, there is room for hope. After Plato, Sir Walter Scott once said, "Necessity, my friend, is the mother of courage, as of invention." He uses the words courage and invention almost synonymously. If he were alive today, Scott might simply call it thinking outside the box.
Innovation comes in many forms, and various electrical contractors have approached it in different ways. Robert Ford, president of sister companies Robert Ford Electric Co. and Coulter Engineering, both established in 1976, recently developed a new approach to his business that might not have occurred to him in the absence of a back-breaking recession. Until then, Robert Ford Electric and Coulter had a clear division of labor. The former did, for the most part, design/build electrical contracting; the latter did solely the engineering for Robert Ford Electric.
Several months ago, Ford was called in by a developer to re-evaluate an engineer's design on a design/bid/build project that would have cost well beyond what the developer was willing to spend. Ford put Coulter on the assignment, and within very short order, its engineers identified $200,000 of savings on a $2 million project. The developer was gratified. Ford said he was happy, too.
"We had created a new a profit engine," he said.
After a discussion with his senior management, he decided to authorize Coulter to offer value-engineering services to developers and contractors seeking to isolate and eliminate unnecessary costs, as well as to enhance performance wherever possible.
Ford said the poor economy, combined with the now stingy lending practices of banks, has made it ever more important to deliver on cost and effectiveness.
"The electrical and mechanical trades constitute about 30 percent of construction costs, representing a significant opportunity to improve cost efficiency. With Coulter Engineering, we have the expertise to quickly review plans and drawings, apply value engineering principles, and help constrain costs. Moreover, we don't charge unless we can help you," Ford said.
Ford said his firm’s offering of value engineering with no upfront fee is unique.
"I've searched everywhere, and I can't find anything like it. And it was a leap for us. It took some guts. Heretofore, when someone would ask us to review drawings someone else had done, we would decline unless we were awarded the job. We also wanted to avoid legal liability that might accompany that kind of review. When we got past that, however, we realized, with the success of our first venture, that offering value engineering services could be a win for everyone, from developers and architects, right down to the subcontractor, who is often the first and last one asked to reduce costs," Ford said.
"When you think about it, the average engineer doesn't start a project with a primary motivation to reduce project costs. He's going to design the job based on his habits and perception about how things should be done. A designer might, for instance, put in a 400-amp line, thinking 'the owner may want it later,' even though all the developer wanted was a 200-amp line. Nobody in the process is aware of the designer's decision and will only discover it when there is a cost overrun," Ford said.
"The key word for us," he said, "is value. We maintain the quality the owner expects while reining in the costs." Ford said the construction background and engineering expertise combine to deliver a rare but common sense approach to construction work.
"What's more, we do it for free,” he said. “Only when we can find significant savings do we charge a modest fee, a percentage of the savings we identify. But, if we don't, there's no charge. It's a no brainer."
However, he noted that, while the method works well for commercial or large residential projects, it is impractical for smaller jobs.
The initial reaction to his value engineering offering is enthusiastic, Ford said. It is helping to keep his business in the black now, but he is optimistic that, once a recovery takes hold in the construction industry, demand for it will skyrocket. So, in this case, necessity not only produces invention but profit as well.
William Russell, in the electrical contracting business for 37 years and now with Foundation Construction in Jackson, Miss., also brought two skill sets to his innovation, but, in his case, the second was not the advanced degree in engineering earned by Robert Ford, but rather mechanical skills acquired while working as a young man in his father's ice plant in Mississippi.
"I was always working with my father in the plant, fixing equipment, trucks, and cars," Russell said. Those skills helped him design the Universal Strut Pipe.
Recounting how the idea first occurred to him, Russell said, "We were working on a job installing pipe to be used for 13,800 high-voltage wire, when we discovered, more than 50 pieces of pipe into the job, that we had a bad batch of pipe. The seam in the pipe was sharp as a razor blade. So the pipe had to come down. That was going to take two or three days."
So, Russell, on a Friday afternoon, went back to his shop and started work on a device that would reduce the time wasted removing the pipe to a minimum. A weekend of work produced the Universal Strut Pipe Buddy, which lines pipes up with each other, holds them in place, and prevents them from "walking."
"That Monday, we used the tool to take the bad pipe down. Even though it was strapped down and in place, it took only two men on a scaffold two and a half hours to take the pipe down. It might have taken four men two to three days to take it down otherwise. The supplier could not believe we had done it so quickly. It saved thousands of dollars in labor costs," Russell said.
The invention, which rolls on stainless ball bearings, can be used with Powerstrut, Unistrut, Kindorf, or similar pipe, according to Russell. He has patented the Pipe Buddy and sells it for around $200 each.
There is, apparently, room for innovation in how the electrical contracting workforce is structured and deployed. Perry Daneshgari, chief executive officer of MCA Inc., a Flint, Mich.-based consulting company specializing in, among other things, product development, waste reduction, and productivity improvement, said that the construction industry lags far behind other industries in workforce analysis and allocation.
"A journeyman electrician," he said, "can easily spend half his time doing tasks that are more appropriate for a less skilled, lower paid worker. That's clearly an inefficient use of his time"
Daneshgari's company developed the ASTM E2691-09, Standard Practice for Job Productivity Measurement. He said the industry has been "stuck in an old paradigm" and needs to learn how identify and manage opportunities for lower skilled and unskilled works to reduce the cost of installation. This "segregation of work," he said, would make electrical construction much more efficient and increase profit margins.
Contrary to what some critics say, this kind of self examination is not meant to "dumb down" the work force, Daneshgari said. It is meant rather to allow the highly skilled to devote their talents solely to those tasks that require them, including supervision of lower skilled workers in the more mundane tasks.
Prefabrication, he said, represents a fortune in reduced time and labor cost. While the electrical construction industry has been making strides in that area in recent years, he admitted, it still has a long way to go. He encourages those contemplating the potential of prefab to view a YouTube video on the 15-story Ark Hotel constructed in China in just six days, a feat that might have taken nine to 12 months in the United States. The building, a soundproofed, thermal-insulated structure, designed to withstand a magnitude nine earthquake, was built entirely with prefabricated materials.
Sometimes courage and innovation require nothing more complicated than going outside of your comfort zone. Ed Ingalls, owner and president of Newington Electric in Newington, Conn., recently created Connecticut Electric Car, a new division of his second-generation electrical contracting company. Ingalls, who said he is finally seeing signs in his business that may indicate the economy is making a recovery, last July dedicated a few of his vehicles to Connecticut Electric Car and began lining up possible customers, including the state.
The company is already doing residential installations for the Chevy Volt and Nissan Leaf and is about to begin doing the same for the BMW i3, but he said commercial applications offer a great deal of opportunity as well. Such retailers as Walgreens and Kohl's are beginning to install charging stations to provide convenience for their customers. Ingalls is directing much of his marketing effort toward points of interest within the community, e.g., "museums, parks, aquariums, any place where people might be staying for a while and might need their cars recharged in the meantime." Such installations might help address what is called "range anxiety" among electrical vehicle owners afraid of running out of charge with no place to plug in.
Ingalls said that business thus far has been steady, and he expects it to grow quickly. Although only 17,000 electric vehicles were sold in the United States last year, he believes that manufacturers have shown they are committed to producing more of these vehicles. He also believes that his company has a nice head start in positioning itself to handle demand for the charging infrastructure.
"Once the consuming public understands the beauty of these cars, the demand will be there. They're not for every consumer, of course, but for the person who, for instance, has a 15- or 20-mile commute to work every day and few other driving needs, it's ideal."
Ford, Russell, Daneshgari, and Ingalls have widely varied backgrounds and work experience. What they all have in common is belief in the necessity of innovation, regardless of the form it takes.