During a panel discussion at the 2018 NAED National Conference in Chicago on May 19-22, several local electrical contractors shared their perspectives on technology, online competitors, professional pain points, and opportunities for distributors to further support contractors.
One area in which distributors can deliver added value lies within one of the most buzzed-about practices in the contracting industry today – pre-fab. An increasingly popular strategy in today’s construction market, which is feeling the pinch of contractor labor shortages nationwide, the prefabrication of products for specific jobs – either done by a manufacturer or by the contracting firm itself — helps save contractors time and money in the field, improves project efficiency and productivity, and offers contractors greater control over the product and installation process. Following, tEDmag.com followed up with several of the NAED contractor panel participants for their input on ways in which they’re using pre-fab activities to boost their bottom line, specific types of pre-fab support their distributors offer, and some of the services they wish distributors would provide.
Adding Value
Mark Barthel, President of Springfield, IL-based Springfield Electric Supply and host of the contractor panel at the NAED National Meeting, confirmed that pre-fab activities by contractors are on the rise. “Our customers are looking at pre-fab as a way to reduce the labor piece and enhance their profitability on the project,” he said. “As a distributor, we get in on the projects early to partner with the contractor and use pre-fab as one way to enhance profitability. We typically work with the manufacturers that provide pre-fab solutions to create value for the end customer and are seeing many more opportunities for pre-fab solutions in general.”
Luke Fenner, Director of Operations at Maron Electric Company, a 92-year-old electrical contracting and design/build firm with locations in Chicago and Skokie, agreed. “We’re incrementally adding these opportunities – the more we can pre-fab with certainty, we will,” he said. “Ultimately, the sooner we can complete tasks, the more it limits our exposure on overtime and improves throughput; the practice also helps to better utilize our different tiers of labor.”
For Maron’s team of 210 electricians, certain pre-fab activities have proven particularly effective. For example, “We’ll do as much ‘wall rough’ as possible, which involves putting all of the pieces within a bracket in a box and sending it exactly where it’s going to be used,” Fenner said. Specifically, “we’ll assemble supports for a conduit rod with an anchor and a box on the bottom; these items typically come separately but we’ll assemble and then paint them, a practice which aligns well with our layout process.”
At B&Z Electrical Contractors, a 32-year-old full-service electrical contracting firm based in Woodstock, IL, president John Barger said that his team doesn’t utilize pre-fab practices that much – “we specialize more in customized build-outs of high-end residential, hospitality, and other projects than in production work,” he explained – but confirmed that contractors everywhere are making use of the approach wherever they can. “You can pay people in your shop to do this work for much less than a journeyman electrician in the field can – in some cases less than half of an electrician’s rate – and do it in a controlled environment,” Barger said.
Among shops that engage in pre-fab activities, Barger said that the pre-bending of feeder and service-size conduit, in particular, offers the possibility of huge savings. “You can pre-bend huge sections in the shop and then just couple and hang them in the field, layering all other mechanicals on top,” he said. “I’ve also seen large shops out west bending branch circuit conduit and preparing box assemblies using bar hangers; electricians just need to screw in the mounting plate, which already has a junction box attached with back support.” Barger said he’s also seeing a lot of manufacturer-driven pre-fab activities involving the use of ethernet cables for lighting control, a practice which can save contractors significantly on wire and labor costs while increasing the efficiency of the system.
Understanding Bottlenecks
At Maron Electric, as at most contracting firms, pre-fab activities are carefully analyzed and only pursued when the labor savings they deliver outweigh their total costs. “We like to have manufacturers do certain things for us at the factory level, but we’ll also do our own based on our labor rate analysis,” shared Fenner, who added that his firm prefers to leave certain tasks to those channel members better positioned to provide those services. “For instance, our distributors are great at logistics – e.g., the getting there and getting back – which isn’t our strong suit,” he said. “We look to them to pick up products, hold them at their location, and then deliver them to the project site. We’re a flow shop and our warehouse isn’t built around that kind of storage model; they’re more capable of that than we are.”
Looking ahead, Fenner encourages distributors to spend more time out in the field watching the installation of products used on various contractor projects. “If distributors were a little closer to the product side or our process, they might be able to suggest solutions that could impact things we do often,” he said, noting that a 1% savings on a product or practice their firm employs in high volume could be more significant to them than a huge savings on a small item or infrequent practice. “Distributors need to better understand our bottlenecks,” he said.
Barger agreed. “It’s helpful for distributors to be knowledgeable about the job-specific products that could be pre-assembled and then sit down with manufacturers to discuss opportunities for contractors,” he said. “Our distributors always try to help us, but we’d love for them to tell us more about their capabilities and for manufacturers to share examples of what other contractors are doing so that we can better understand what’s possible and available,” Barger said. “We’re definitely seeing a lot more pre-fab out there, but it’s still pretty new to the industry.”
Tagged with contractors, value-added