The song on the B-side of a pop single was never expected to be a hit. In the heyday of 45-rpm vinyl recordings, it was the A-side that got all the attention. We see a parallel for this in the way people look at electrical contracting.
In that view, labor productivity is much like the A-side because it is the principal factor in determining whether any job will turn out to be the equivalent of a musical hit.
Likewise, electrical products are very much like the B-side. From that vantage point, cost savings related to material purchases (or “buy-outs”) will only moderately contribute to a job’s success, and to a far lesser extent than labor savings.
This traditional thinking about electrical construction labor and material was formed long before the peak in popularity of 45-rpm records. We believe that, like them, it has a big hole in the middle. It is time to focus on the flip side of electrical construction.
Rather than focusing on incremental improvements in labor productivity, turn your attention to massive improvements in material management. Every product ECs install begins in a manufacturing plant and continues through to distributors.
From there, ECs carry every product on the last mile of that journey to its final installed location. If ECs envisioned their role as managing this segment in the pathway that products must follow to reach their permanent placement, unnecessary “material handling” would vanish. Lost time would disappear. Productivity would soar.
With our “product pathways” concept in mind and for the benefit of some solid experience in material management systems, we enjoyed a coffee break with Maria Davidson, co-founder and CEO of Kojo, San Francisco.
You have quite a background. You spent your childhood in Israel, moved to London at 13, graduated from Oxford, worked throughout Southeast Asia and now live in San Francisco. You were previously on the Forbes “30 Under 30” list and were voted an Ernst & Young Bay Area Entrepreneur of the Year this year. What prompted you to plunge into our industry with its material management issues?
I started Kojo to help make it faster, easier and more sustainable to build our cities. When we got going, we spoke to thousands of people who worked across all stages of getting a building off the ground to figure out how we could make the biggest difference.
What we learned was that materials management issues were by far the biggest unaddressed problems holding people back. We knew we needed to solve this.
Describe how electrical service and maintenance contractors would put a system like yours to work in their everyday operations. What are the first steps they would take? What are the first rewards?
The first steps are getting the field and office onboarded. The rewards are immediate: field teams cut 38% of the time their foremen spend on managing materials, and office teams see manual data entry time cut by 75%.
From your experience, how would electrical service and maintenance contractors describe the return on investment this kind of software provides? Usually, they might think in terms of cost savings. But there must be many opportunities for revenue enhancement.
In addition to streamlining how field and office teams work together, most contractors also see 3%–5% savings on materials they request for a quote. They can also cut down up to 90% of the materials waste on their projects.
Being able to confidently show you have a scalable system that increases your ability to deliver projects on time and on budget helps both win more projects and recruit top talent.
We have advocated for service-oriented ECs to think of their role as carrying products on the “last mile” in a long pathway that began at the factory and ends where the products are installed. How do you see software like yours supporting that “flip side” business model?
There’s a huge opportunity for contractors to turn how they manage materials from an afterthought to a unique strength for their businesses!
When the fans in a football stadium stomp their feet and chant in unison, “We will, we will rock you!” they demonstrate the inherent possibilities of every flip side. “We Will Rock You” was released in 1977 by the British rock group Queen, on the reverse side of “We Are the Champions.” Both songs are regularly sung in sports venues. By exulting fans, their medley is a metaphor for what can result when the two fundamental sources of ultimate success in construction—people and products—are intelligently connected.
About The Author
MCCOY is Beliveau professor in the Dept. of Building Construction, associate director of the Myers-Lawson School of Construction and director of the Virginia Center for Housing Research at Virginia Tech. Contact him at [email protected].