Published In June 2001
From Louisville, St. Louis, and Leavenworth, Kan., the three contractors profiled—last month, this month, and the next—are working to become even more lean and efficient. They’re including the Web in their plans, not because it’s “hot” or because of product pricing, but because they think it will help. Last month’s article described the wisdom of waiting before becoming too Web-reliant, given the elimination of many construction Web vendors. However, electrical contractors are preparing to make the Web an important part of how they will conduct business in the future. Sachs Electric, featured this month, regularly uploads and downloads CAD drawings in working with architectural firms, as it has for years, and design/build work is a mainstay for the company. Sachs Electric: Re-engineering processes Sachs Electric is a national contractor, a company ranked 17th among all electrical contractors nationally in 2000, with $135 million in sales. Beyond the numbers, Sachs has a reputation for staying on the cutting edge. Perhaps a sign of what many readers will do in the near future is that, three years ago; Sachs engaged in a major effort of re-engineering company business processes. “We began to search for a new enterprise resource planning (ERP) system three years ago,” said Clayton Scharff, the company’s 37-year-old president and chief operating officer. “When we started to do that, it became apparent we were going to completely replace our legacy systems with a new one. “At that point, anything, literally, was possible.” Sachs hired a management consultant firm to lead the company through a “facilitated re-engineering.” Under this process, the Sachs people took each area of company operations apart—“re-engineering the process as if there were no constraints,” Scharff explained. The consulting firm’s people ran the meetings and helped the Sachs staffers to get to where they needed to go. In the process of going through the company, process by process—over several years—Sachs executives and managers found many places where the things it wanted to do could be made easier via the Web. Customer interface Sachs’ idea of a project collaboration Web site is a bit different from what vendors are promoting to the construction industry. The company has set up “site-specific private Web sites, as interfaces between our customers and ourselves,” Scharff said. Example: Sachs is in the “rack-and-stack” business, involving the staging of Digital Subscriber Line Access Multiplexer (DSLAM) central office equipment for telecommunications companies. It receives signals from multiple-customer Digital Subscriber Line connections and puts these signals on a high-speed backbone line using multiplexing techniques. Yes, it’s the voice/data/ video business—but a few steps beyond. The Sachs job here is to assemble, test, burn-in, report to customers, and make the equipment completely ready for central office installation. “We have a staging facility that does that production work,” explained Scharff. “We have a customer that may have multiple sites across the country. At any given time, they want to see which central office equipment is ready to ship—for whatever reasons, including whether or not they want to ramp-up or ramp-down. “On the Web, they can see real-time where we are in testing and burning. This is the information they want. We have an assistant at that facility—she’s sitting in the middle of the fabrication facility—she does nothing but post results and log jobs in. As soon as she’s done with a given entry, she hits ‘enter’ and it’s on the Web.” Sachs got into this “customer interface” Web business a few years ago, out of necessity. “We had a customer with 1,100 locations around the country, with the work occurring in a relatively brief time” Scharff remembers. “The customer had many, many coordinators. They all needed key information to do their job—where does this stand, is this one ready to move in, and so on. “As a result, we were bombarded by phone calls. Our project coordinators were so tied up just by answering the phone trying to update these people. That drove us to the Web.” Having demonstrated—to itself—the utility of these customer-contractor collaboration sites, Sachs continues to put such private Web services up today. Project collaboration You might think that Sachs would be among the leaders of the construction industry’s project collaboration bandwagon. But the collaboration site use is driven by others, not by electrical contractors. “We’ve not seen wide use of them,” Scharff reported. “We’re working on a project in Detroit, putting in new instrumentation and monitoring for 400 remote sites for the city’s wastewater system. This project is so big, and so involved, that a data center is being set up for collaboration for all participants, by a team of us and the other contractors.” Procurement “A number of vendors and distributors are building an HTML interface to their system,” Scharff noted. “It’s the usual names in our business, GE Supply and a host of others. You can install their software and come up on a browser, and see inside their system. There’s an online order entry system, too. “Here’s our problem with that: It doesn’t have the bang for the buck if it’s not getting into my system. Sure, it makes it a bit easier to order stuff. But we’ve not found anyone who has a Web interface to easily integrate with our system. “What I find is that a lot of people overstate things. But when you get deeply into it, you find that they don’t easily interface with anyone’s system. Yes, there is some estimating software that gets updates from it. But when it gets into your ERP system, what you want is line-item detail in your cost system without re-entering by your people.” As a result of disappointment with what’s available, Sachs is working on a pilot project on procurement. It would allow the company to upload the line-item detail on a product purchase from a vendor. On-site Sachs employees (superintendents and foremen) would be given a card with a unique identifier (a bar code) for purchases. “This would allow for approval on-site,” said Scharff. “Our people can say, ‘If I don’t like what I see [the items delivered, or their condition], you don’t get my card.’ The implementation of this has taken longer than we had planned, but we are in the final round right now (February).” Futureware As a large company, Sachs is looking at ways to get key information more quickly for everyone—the company and its employees. “We are beginning to design an internal intranet,” he said. “We’re going to start posting human resources material and safety information, including benefits and more. We’ll have postings about jobs, bid results, and the like. We plan to work on this over the next year or so.” As in the case of Sachs’ project scheduling, the United Electric’s view of collaboration is different from what is generally marketed to the construction contractor. With time and scheduling as keys to the auto plant shutdown jobs, United wants to see all the way through, to the manufacturing operations of its original equipment manufacturer (OEM) equipment suppliers. Next month, in the third-part conclusion, United Electric’s plans for Web use will be explored. SALIMANDO (email@example.com) is a Vienna, Va.-based freelancewriter. He also writes a monthly e-commerce column for www.tedmag.com.