Perhaps it is incremental. Maybe it is all in. Either way, making one’s operations more productive can equate to profit and growth. Practices such as Lean Design and Construction, Agile Methodology and Continuous Improvement are popular paths. A clear eight-point action plan that borrows elements from each might be the ticket to productive productivity.
Headquartered in Clayton, Mo., Graybar is a leading North American distributor of components, equipment and materials serving the construction industry. Its “Eight Practical Steps to Improved Productivity” are based on successful methodologies and valuable input from electrical contractors and others.
“A lot of contractors have been on a productivity journey for decades and continue to innovate over time,” said David Moeller, director of customer markets, Graybar. “But we also find many others who continue to struggle. We think these eight steps can help.”
Graybar’s steps are:
- Recognizing efficiency must improve
- Top-down buy-in
- Choosing your productivity approach
- A review of existing processes
- Redesigning processes
- Making supply chain improvements
- Introducing digitization
- Measuring productivity/ongoing improvement
These steps dovetail with the National Electrical Contractors Association’s NECA-1025 initiative, which challenges members to increase their market share 10% by 2025 through labor productivity, innovation, technology and other actions.
If adding efficiencies, better processes and tighter run operations are goals, collaboration is essential. Once acknowledging a need to improve efficiency (No. 1), the road to success typically begins with a champion in the organization (No. 2). A champion inspires employees and fosters change that builds over time. Typically, that person is an owner or other committed executive.
“Workers such as project managers and journeymen are typically laser-focused on what they do in their specific areas,” said Quintinus Henry, director of quality and service for Graybar. “Everyone has their way of doing things, be it the front office, warehouse, staging and handling. Bigger-picture concerns need to come from further up in the organization. The leadership of the company is what drives this.”
ERMCO Inc., based in Indianapolis, serves commercial, industrial and residential markets. James Potts, senior vice president of operations, started his career with the company as a college intern. From the beginning, he saw a company committed to efficiency.
“A successful commitment to productivity does start at the top,” Potts said. “Our CEO, Greg Gossett, and others really set the tone for years, so much so that we see productivity now driven from the bottom up. For instance, crews out in the field often suggest fabrications (assemblies) that will make for a better install. We have built a culture of ‘give it a try’ if we think a tool, process or approach will allow us to do something better.”
Alan Creel, vice president of preconstruction, Miller Electric Co., has found the same.
“A culture of better, faster and more efficient has to be a mindset. I think Miller has thought this way since its inception in 1928. I did some field work for Miller in high school and joined the firm right out of college. I have seen productivity practiced on a continuous basis and built through a sharing of ideas at every level of the organization.
“Safety is one example of bottom-up productivity. Installer suggestions have often led to better practices and a strong safety culture. Their feedback has given us a lot of gold in many areas,” he said.
Based in Jacksonville, Fla., Miller Electric serves multiple markets from institutional and civil to healthcare and manufacturing.
Deciding on productivity processes is the next step (No. 3) in Graybar’s plan. While Miller Electric is a member of the Lean Institute, Creel said his company views productivity as a philosophy more than a rigid protocol. The same is true for ERMCO. Lean-like practices might be most evident in each firm’s just-in-time approach to fabrication, manufacturing and distribution.
Understanding how you work
An examination of company operations can help reveal the necessary and the unnecessary. In a process review (No. 4), Graybar suggests examining incidence rates and inventory management that includes downtime due to stock shortages. If in place, how integrated is your enterprise resource planning (ERP) software? Is it effectively addressing accounting, procurement, project management, risk management and compliance and supply-chain operations?
“When we partner with contractors, we will conduct an on-site operation walkthrough, documenting what we think can be done more efficiently [and] be improved,” Henry said. “Contractors may not agree with all our recommendations but adopting some gives them a start.”
During or after a review, ideas can start to percolate (No. 5).
“We’ve asked ourselves what has made this process so successful and what can be repeated,” Potts said. “What can we avoid? We look at technology that helps us be more efficient. For example, we went to a new accounting program and added a project management subsystem. We standardize good data that has shown itself to be consistent. We also upgraded our labor tracking so our on-site crews are the right mix of skill sets and skill levels. Our prefab operation is custom-build.”
Miller Electric has integrated various ERPs using an overlay of Google apps across the company’s communication platforms.
“For instance, we export financials to the Cloud and use ‘My Miller’ with links to our divisions and departments ranging from BIM [building information modeling] and prefab to human resources,” Creel said. “Needed forms, completed reports, project updates, are all accessible. Individuals can discover how an effort or division is performing against budget down to cost codes. We are always looking for new ERPs that will help us manage our firm across departments with better, more precise and easy-to-understand information.”
A better supply chain
So many productivity gains can be found in the supply chain (No. 6).
“Too often, contractors look at supply chain in terms of directing the contracted firm, ‘We need you to do this at our direction,’” Moeller said. “Working as partners is a different mindset. Look at it as leveraging the supply chain. Everyone gets ahead. Supply-chain redundancies can add 25% to cost.”
Whether in partnership internally, with vendors, or with third-party distributors, working together seems essential to meeting ever-challenging construction needs on and off-site. The pressures of meeting tighter deadlines, working with tighter margins and ever stringent safety practices can require some new thinking. Two heads or more can be better than one.
“A big win for us has been employing Graybar’s SmartStock inventory management system,” Potts said. “Stock is tailored for the specific need of a said project, put together at our warehouse, and delivered to the job site.
“One example of this just-in-time approach has been with lighting fixtures that now come delivered to the site ready to install in a ceiling. It is such an efficiency advance for us. Efficient wire pulling is another improvement where we use Graybar to supply prepopulated reels specific to the needs of the project. This is especially helpful when we take on out-of-state projects,” he said.
Miller similarly uses Graybar to handle much of its inventory management.
“Having a third party handle certain day-to-day aspects of our supply chain frees up things like staffing,” Creel said. “We can add people to our prefab operation or spend more time on installation at a job site.”
Shepherding digital technologies (No. 7) to advance operations is yet another thing to decide when working to improve productivity.
The advantages of BIM and its application in assemblies design was cited by both Potts and Creel.
“Parts and fabrications modeled correctly are manufactured correctly,” Potts said. “Installation then goes smoothly.”
Creel added that BIM data can be informational and shareable from designer to specifier to warehouse staffer to installer. It can be a game-changer, but it is important to recognize that there will be a period of trial and error. That is what leads to better mastery of any newly adopted technology.
“It’s only through mistakes that we learn,” he said.
Potts also cited other digital tools that help his firm.
“We have embraced scannable tracking (e.g., QR codes) so inventory can be traced, including tools,” he said. “We use iPads for field staff, so they have instant access to documents. On a job site, we also set up foreman stations equipped with big monitors so information found on mobile devices can be screened and better viewed by teams. Our iPads also have a timecard app.”
It is important to track productivity and create an ongoing improvement process (No. 8) so gains continue to grow.
“We’ve had a core process in place for 25–30 years called MPU (manpower utilization),” Potts said. “Its implementation has benefited from technology advances over the years. We apply it to manage labor costs and labor usage on projects against earned value. We can now granularly employ MPU down to job function. Projects that extend beyond three months receive monthly reviews. We measure smaller projects, too. In our shop, we also measure the cost in the manufacture of parts and assemblies against the budget of a job. We evaluate BIM costs against budget, as well. Even our office staff workload is tracked.”
Miller Electric engages in monthly and quarterly project reviews, applying productivity measurement tools and earned value analysis.
“We can look at what was installed and its installation time, man-hours measured against a baseline,” Creel said. “An array of codes is applied on major projects so we can track productivity against many measures.”
In the end, productivity means change, and change can be hard.
“Do not let short-term costs blind you from long-term benefit,” Potts said. “You will be missing long-term return on investment and that could be a problem in this business. If you are not careful, you might end up on the outside looking in. Take that journey to discover what is the best investment to make for your business.”