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Best Practices - EC Industrialization
As of March 24, 2017
February 3, 2015
The electrical contracting (EC) industry is consistently working to identify the next step in work quality, efficiency and cost effectiveness. Those on the cutting edge are increasingly examining industrialization as that next step, including lean production, prefabrication and supply chain integration. Electrical contracting industrialization entails seeking business efficiencies through the adoption of prefabrication operations and increased collaboration through the supply chain.
In July 2013, ELECTRI International presented Santa Clara University with an Early Career Award to investigate the determinants and best practices of EC industrialization. The final report is entitled Industrialization of Electrical Contracting: Prefabrication and Supply Chain. Throughout the project, Principal Investigator, Hisham Said, Ph.D., worked with a taskforce of electrical construction, supply, and manufacturing professionals to provide the initial input, guidance and results validation.
Prefabrication is utilized in this study as a measureable indicator of the industrialization level of electrical construction firms. Accordingly, the study addressed three main objectives:
1) Identify and collect best practices of electrical contracting industrialization in terms of prefabrication and supply chain management.
2) Identify industry-related prefabrication feasibility determinants that are out of the electrical contractor’s control, including economic and market parameters.
3) Identify firm-related determinants of prefabrication feasibility within the EC’s control, including operations management and supply chain collaborations.
The first phase of the study included various data collection tasks including semi-structured interviews, site visits, acquisition of case studies, an online questionnaire, and obtaining relevant local economic data of the respondents’ metropolitan areas.
The second phase included suggesting a set of best practices of electrical contracting industrialization, supply chain integration, and prefabrication. The proposed best practices are grouped into:
- Prefabrication operational/design requirements that include BIM, labeling/packaging, assemblies standardization, prefabrication scope identification, project delivery system, and prefabrication capacity planning.
- The role of vendors/distributors that includes partnership agreements, material management services, and preassemblies kitting.
- The role of manufacturers including training workshops and customized prefabricated cataloged assemblies.
The third phase involved the utilization of the collected questionnaire responses and economic data to develop logistic regression models that demonstrate the factors that lead to successful prefabrication integration.
The investigation found that prefabrication has a very strong significant dependency on the availability of BIM capabilities within the firm, also strongly correlated to the size of the firm.
Next, prefabrication is very dependent on the unions’ acceptance of outsourcing and the strength of the vendor relationships. Finally, prefabrication is somewhat dependent on local economic growth, electricians’ hourly wages, and industry competition.
Two models were developed during this research. The first suggests that prefabrication feasibility is dependent on three variables: the union local’s acceptance of prefabrication outsourcing, building information modeling capability (BIM), and the strength of vendor relations with the electrical contractor. The second model suggests that prefabrication feasibility is dependent on six variables: the unemployment rate, average number of employees in the local electrical construction firms, average local electricians’ hourly wage, the union local’s acceptance of prefabrication outsourcing, BIM capability, and the existence of vendor partnership. Both models had the same 75% prediction accuracy when applied to the testing data group.
Data was further analyzed to obtain a better understanding of the developed models beyond what was specifically reported. The final report, Industrialization of Electrical Contracting: Prefabrication and Supply Chain, is summarized by two major identified opportunities for improving current industrialization practices:
- Promoting win-win relations between IBEW union locals and industrialized ECs, and
- Increasing implementation of lean principles.
This study confirms a very positive attitude within the EC community towards prefabrication as a central piece of business industrialization. Close to 93% of electrical contractors (including those with or without prefabrication facilities) register a positive attitude. However, 42% expressed a positive attitude towards prefabrication while noting that it does not work for every contractor.
The report identifies the critical prefabrication feasibility determinates and suggests best practices for those ECs willing to move from a positive attitude into a successful prefabrication operation.
The full report is available at http://www.electri.org/research/industrialization-electrical-contracting-prefabrication-and-supply-chain.