Optimal Operational Model for Electrical Contractors

The purpose of this research was to investigate the productivity improvement principles used in various industries and to suggest implementable models for use in the electrical construction industry. The research was very successful. The procedure used was to interview the decision makers of various industries and electrical construction companies and develop a useful model. The one-on-one interviews made available an unprecedented amount of information, which has helped to develop the optimized operational model. One of the most important conclusions of this research is this: The productivity improvement principles that have helped other industries — such as automotive, manufacturing, commercial airplane production, and retail — can be used very effectively in the electrical construction industry. Productivity can be improved by using improved operational models that can streamline the following three areas of operations:

• Material management
• Labor management
• Financial management

In order for an electrical contracting company to run as a professional business, a minimum number of required business processes need to be in place:

• Processes of project management
• Processes of financial planning and management
• Processes of support activities

All these processes need to be made visible for better manageability. The cores of these processes should be connected by three characteristics of productivity and profitability:

• Time
• Cost
• Quality (scope and performance)

This research discovered three types of electrical construction companies:

• Traditional
• Transitional
• Professional

The Wal-Marts of electrical contracting are appearing on the horizon. The electrical construction industry can no longer operate profitably as mom-and-pop shops. The industry is behind in four areas:

• Productivity
• Employment of a young and educated Workforce
• Application of more productive work processes
• Reliance on profitability-increasing management processes

The results of this research will help the electrical contracting industry to understand and use its historical strength while learning from other industries to improve on its weaknesses. These results are applicable to the progressive electrical contracting companies and CEOs who have constantly been seeking better ways of operation.



Perry Daneshgari


Michigan State University

Publication Date:

February 2002

Format & Size:

Soft cover; vii and 27 pages

Index Number:


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