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Almost every new contractor sets out to become the best in town. Few achieve that distinction. Often it is due to well-intentioned but misguided efforts. Slashing prices to perform the same work as everyone else does not cut it. Saying your firm offers fast, friendly, fair service is not impressive when every business owner makes the same promise. Customers do not listen to what you say. They watch what you do. To becomethe contractor of choice, it takes more than a low price and a clichéd promise. It requires a customized business model, one that offers individual solutions to individual clients.
The growth of the design/build market would seem to lend itself to separating an electrical contracting firm from the rest of the fray. Some contractors see design/build as an opportunity to enter a market in which they have more control over profits and projects. That may not always be the case.
Positioning an electrical contracting firm as having design/build capabilities without the professional expertise to back it up can lead to irrecoverable loss of money and reputation. With customers able to communicate to thousands of other potential customers through the Internet, it is crucial to have a reputation of integrity.
As one industry expert advised, “A firm needs to ascertain if it has the technical chops to deliver a design/build project. You can’t afford to oversimplify it. Where’s the engineer fit in? Unless someone on staff is a PE, it is going to be necessary to hire an engineering consultant. Then, if you really want to grow into this business, it’s going to require an investment in a CAD workstation as well as professional marketing.”
And no one walks alone
References abound to the team concept involved in the design/build project delivery. In her article, “Teaching Teamwork Skills,” (Electrical Contractor, February 2007), Jennifer Leah Stong-Michas wrote, “Electrical contractors are critical team members and need to be cognizant of the specialized role they can play in the successful pursuit of work by the team.” This team typically includes the general contractor, the subcontractors, project manager and architect/engineer.
Electrical contractors have access to another player who is a well-kept secret. Unusual, considering the contributions this potential player can bring to the design/build table. Impatiently waiting in the background, hand outstretched and waving like a 6-year-old trying to get the teacher’s attention, this prospective team member shouts out, “Pick me, pick me!” The contractor passes by daily and does not notice the abundance available from this valuable resource—the electrical distributor.
“Electrical contracting firms don’t always realize how much value electrical distributors can provide,” wrote Dr. Thomas E. Glavinich in his article, “Understanding Distributors’ Value” (Electrical Contractor, March 2002). “Electrical distributors provide the firm with access to products, inventory management, logistical support, short-term financing through trade credit, technical expertise and information, training and much more.”
Right you are, Dr. Glavinich. And here is an overview of some of the services distributors offer. Most of these services would cost thousands of dollars if outsourced, but most distributors offer them for free, simply for an opportunity to be part of the design/build project delivery team. Visit www.ecmag.com for the full text of Glavinich’s article. Simply type the headline into the search box.
Here is an overview of a few of the services available from most electrical wholesalers:
- Thinking outside the branch or vendor-managed inventory: Most distributors expand their reach by finding ways to take inventory outside the warehouse. An on-site job trailer with consigned material is not exactly a new idea, but this form of inventory management is ideally suited for the design/build project. Materials sell at predetermined prices only when the contractor uses them. The distributor maintains the inventory on the premises, saving the contractor time and money by keeping workers on the job site. When the project ends, the contractor does not have to worry about leftover materials or restocking charges. In a design/build project, most of the time, the contractor knows early on what material the job requires. This enables the distributor to preorder items with long lead times so they will be available when the job is underway.
- Have parts, will travel: Another means of getting material to a job site so the contractor can keep workers on task is the “Mobile Branch.” For example, Rexel Inc. converted a 30-foot-long truck into a mini supply house on wheels. According to Mike Williams, area manager for Rexel Inc., Miami, the goal of the Rexel Mobile Branch (RMB) is to “get the right material in the right place at the right time. If we can eliminate the delay and expense it costs one of our customers to get a product to a job, then we’ve taken a step closer to that goal.” The flexibility of the RMB makes it the perfect solution for design/build projects that require inventory specific to the job.
- Back to school: Contracting firms that want to secure their future in design/build know the importance of training. According to a survey prepared by Renaissance Research & Consulting Inc. for Electrical Contractor, the most requested types of training relate to National Electrical Code (NEC) changes, sustainable or green technology, and LEED certification. Again, drawing from their powerful network of resources, distributors can arrange training for electricians and, in some cases, bring it straight to the job. According to Tim Gleeson, Southeast Division marketing manager for Rexel, future plans for the RMB include possibly using it as a classroom on wheels, providing on-site education for in-field electrical professionals and keeping workers on the premises. The goal would be to collaborate with manufacturers, bring in new and improved products and show customers how to profit from them.
- Connect to the network: “Can you imagine undertaking a project where your firm has to deal with the hundreds of manufacturers that supply everything from simple everyday materials like raceway and wire to sophisticated equipment like a UPS? It would be impossible unless your firm actually developed all of the contacts and capabilities that a typical electrical distributor has,” Glavinich said. Distributors have a collective of professionals eager to make available their expertise and services to electrical contractors. Most of these services are free of charge. Drawings and spec sheets are readily available to the project engineer to use in the design phase of the design/build project. Makers of distribution and control, lighting and communications products are just a few of the manufacturers who have professional engineers on staff that can provide design assistance to contractors.
- A few dollars more: Some distributors are making longer-term financial arrangements beyond the traditional 30-day trade account.
- A lease is a terrible thing to waste: There are plenty of high-tech tools available that make a contractor’s job easier and more productive. However, for a small- to medium-size contractor, some of the products can be expensive (sort of like copper wire). That is when an electrical distributor can step in with an affordable leasing program. Leasing or leasing to buy equipment for a design/build project allows contractors to reduce costs and improve cash flow, and it enables them to use the latest technology without a large investment. (Now, if someone would come up with lease-to-buy program for copper wire … .)
- It’s who you know: Positive word-of-mouth is vital in this market. One professional engineer who owns his own electrical contracting firm tells of a time when he received a referral from the local supply houses. The owners of a new manufacturing plant were moving to town and went to the electrical wholesalers to ask about electrical contracting firms with design/build capabilities. Two of the suppliers gave them the name of the engineer’s company. The new owners contacted him and decided his firm was the right one for the job. That is another reason it pays to stay on good terms with your local supply houses. It is not uncommon for new businesses to turn to the distributors for referrals when seeking an electrical contractor.
- Manage this: Some distributors have the systems in place to keep track of design/build projects. For example, Graybar’s Project Manager provides the contractor with order acknowledgement, product lead times, order release dates and project drawing status from first submittal to final approval. The program can customize data in the appropriate format for project delivery.
Support your local supply house
Any one of the above services would be an expense to the electrical contractor if not for the distributor willing to provide most of them for free. The technical, financial and marketing resources available through most distributors clearly place them as a “value-add” in the design/build project delivery basket.
One contractor said his design/build projects came as the result of long-term relationships with owners of supply houses.
“We have a history of work inside their buildings. We know the plant, the people, the processes. We know what the owner expects.” He said he understands the value of the “no-fee” services offered by electrical distributors. Like most design/build contractors, he does not charge a professional fee for his services in the design phase of the project.
The increased pace of commerce is at least partially responsible for the accelerated growth of the design/build project delivery method. For instance, in the case of a manufacturer constructing a new plant or adding a process to an existing factory, the sooner the project is operational, the sooner the company is making money. The fast-track, overlapping design/construction phases of the design/build project delivery ensure optimum profitability. It is not that the physical construction takes place any faster on a design/build. It’s that, instead of the linear approach of design/bid/build, some of the phases of the design/build project delivery overlap or occur simultaneously.
“All of this is not to say that design/build is better than the traditional design/bid/build method,” the contractor said. “Some industries have special criteria that must be met in addition to and outside of the Code. Healthcare, for instance, has its own set of specs and regulations. In those instances, certified professional engineers specialize in the design and construction of particular institutions. So, design/build isn’t a one-size-fits-all. Each situation is unique.”
Survey says ...
Maybe it is not for everyone, but a survey sponsored by Electri International—the Foundation for Electrical Construction—revealed eight out of 10 contracting firms stated that they would “develop the full capabilities necessary to provide [design/build] services” within the next year. The fact that contractors are “chosen” to be part of a team in the design/build project delivery method gives a completely new meaning to the phrase “contractor of choice.” To win, you’ll need an edge, an ally, a secret weapon. That is where the electrical wholesalers come in. They are in business to serve you. Look for the one that has the services compatible with the demands of the design/build project delivery and the temperament compatible with your team. Look for the one with the enthusiasm of a 6-year-old, hand waving, shouting, “Pick me! Pick me!” EC