Monday, November 15, 2021

November 2021 State of the Industry Report (Vol. IX, Issue 2)

 Progressive Contactors 

In 2000, Dr. Perry published The Optimal Operational Model for Electrical Contractors, translating his knowledge and experience from outside construction into acumen that would help move the construction industry forward.  After 20 years, we are trying to move past page 2.  How will we know we are there?  Check out our research and publications on Industrialization, giving lead indicators to industry-wide metrics that would indicate if your business or the industry as a whole is moving the needle.

That being said, we have worked with thousands of companies in construction, and all started as “Traditional”, but through their vision and hard work, have grown into a Transitional model and some even to Professional.  The pathway to get there is laid out in the same Optimal Operational Model research starting on page 19.

We are proud to watch the Progressive Contractors listed below start or continue down the path.  If you’d like to join or learn more, our semi-annual Symposiums are the best chance.  Read more about the upcoming one later in this SOTI.

RPE Contracting, Inc.

RPE Contracting, Headquartered in Florence, SC with branches across South and North Carolina, began their journey with Agile Construction® “officially” in August 2021.  Although Scott Rivers (President) had “read the book”, he has engaged our full team with his to support the current growth he has led as well as future growth and infrastructure needed to see through his vision of being the “Megacenter of the Southeast”.  As a full MEP service provider with a centralized prefabrication facility, RPE may be one of the first trade contractors to effect the megacenter model.  We will be facilitating 6 Kaizen Events for rapid and data-driven problem solving and process design in November.

Staff Electric 

Staff continues to pursue the Professional Model  as a company.  Their Agile Summary (indicating project health in terms of productivity and stable job-end projections) has turned more “green” than it’s ever been, which reflects in the company’s financial results.  The leadership team continues to require that Agile processes and principles be understood and used by the project teams, and through the Design Team infrastructure, the voice of the processes (good, bad, and ugly) resounds throughout the company.  A brief overview of their accomplishments year-to-date:
  1. DCI™ & TPAC™ : company-wide usage of the two newest tools in the WEM® suite, allowing visibility to their pipeline, backlog, and project financials.  This full transparency does put an end to “Horse Trading”, but it’s more rewarding to learn from true performance gaps and compete with system-level data.
  2. Kaizen events:
    • Branch Kaizen: maintenance and monitoring of the process developed and implemented in 2020, which saved nearly 10%, using Agile Construction® data to drive problem solving on the company’s biggest field productivity losses.
    • Change Orders: referencing data from JPAC® over the past 3 years that MCA analyzed to show that change orders cost money that isn’t recovered, the Project Management Design Team led a Kaizen event to fix that problem.
  3. Budget: Staff enters their 3rd year of having a company-wide budget, expected to be one of the few contractors to use a Dynamic Budgeting process in 2022 to align the company’s financial management to real-time events.
  4. Prefab: despite the growing pains of becoming professional, Staff continues to lead the pack with its innovation in both strategy and execution.  Strategy sessions are between Prefab and the foreman reviewing the project layout and design, focusing on the needs and timing of the project.  This allows the foremen to utilize the company database on prefabrication to develop optimum solutions for the project.

Lemberg Electric

Lemberg Electric has made major headway in their progress towards their strategic focus of expanded education and practice of Agile Construction® principles within the company. To summarize their accomplishments to date:

    1. Project Scheduling and Project Management training: Most recently, senior leadership at Lemberg Electric committed to a two-phase training customized by MCA, to enhance the organizational and managerial skills for their project managers, project support staff, and field leaders.
    2. Company-wide expansion of Agile Construction® principles continues to be a priority for the company. Through the new engagement of their Signs Division, and continued immersion of Service managers and field personnel, more of the company’s field and project support personnel are able to operate with Agile methods and tools. 
    3. Prefab: Lemberg has begun transitioning the layout and operation of the prefabrication shop to a fully functioning part of their project fulfillment process. Following MCA’s assessment and layout recommendation for prefab, MCA is working with Lemberg Electric’s prefab managers to improve prefab processes from prefab identification, classification, and ordering to prefab shop capacity planning, production schedules, and on-site delivery. The focused effort on prefab will help Lemberg to support prefab on larger projects and to expand prefab usage across the entire company.

Allfab Electric

By name, Allfab Electric in Omaha, NE seems new, but in reality, it’s a continuation of Kevin Lytle’s passion for Prefabrication, and one of the most tenured practitioners of Agile Construction®. This is not your ‘normal’ contracting company. Allfab will work to create safer work environments by maximizing prefabrication and working towards the Industrialization of Construction®. Companies can work with Allfab Electric for their prefabrication needs as a standalone supplier. Allfab Electric is aiming to be a construction megacenter. Reach out to Kevin at ((402) 510-2379), or visit their website at (www.allfabelectric.com) to find out more.

Electric Company of Omaha 

ECO continues to gain momentum with Agile Construction®, while its employees take the reigns of learning and using the full benefits of JPAC® and SIS®.  With several field foremen transitioning into PM roles, their ability to manage work with a data-driven approach will expand.  They are the first company to get the “Single Point of Launch (SPL™)”  process off the ground, led by Glenn Biehl and their Field Design Team, to expand the approach of Agile to any size and type of project with the same disciplines of planning and externalizing work®.

Dixie Electric, Plumbing, and Air

It all started with the Agile Construction® Book .  John Yelverton’s is the most well-worn and tabbed one we’ve seen.  After 3 years of significant growth in the Construction division of Dixie and continued success of its Service division, here are a few things that Dixie is planning to continue making the pages of that book come to life:
  • Consistent quarterly Project Status Reviews (PSR’s), a version of MCA, Inc.’s recommended project audit process to understand the job and its risks going forward at every 25% increment
  • Prefab expansion, by bringing in one of the best field foremen to augment Michael Jones’ work in getting the shop up and running.  Michael’s learning and implementation after attending multiple MCA Agile Classes, Symposiums,  and visiting other Agile Practitioners is a model to be followed.
  • Usage of MCA, Inc.’s “CFO for Rent”, led by Jennifer Daneshgari, as a service bringing MCA, Inc.’s experience and interest in its customers’ financial success to companies that may not need a “full time CFO” but can rely on Jennifer and the team to complement the existing financial managers’ work and responsibilities.
  • Embarking on a deeper relationship with Mayer (soon to become part of Rexel), to leverage each other’s strengths to reduce the cost of providing construction to end users.  John & Noble Yelverton and Wes Smith (Mayer President and MCA CEO Forum member ) evaluated their commitment to each other that started in early 2021 and plan to expand the relationship on pilot projects yet this year.

 Aldridge

Aldridge Electric, a long-term Agile Construction® Practitioner took their Agile commitment to another level in 2021. With a company-wide Agile Construction® Immersion leader sessions, where all Executives, Managers, and Leaders, as well as Superintendents from their locations and projects across the country, were included to regroup and define how to get the company to the next level of Agile Construction® usage and to improve the connection and feedback to the field. In addition, it was the first year where the whole estimating group was included in training and Agile Construction® interactions to kickoff the EAE® process and feedback within Aldridge Electric.  Aldridge had 65 participants in Agile 101 and 18 in Agile 201 this year.

This commitment resembles the need for “maintenance” in any process or mission.  When MCA and Aldridge first started this journey in 2014, it seemed like everything should be “smooth sailing” in short order.  However, with changes to the business both externally and internally as well as MCA, Inc.’s continuing evolution and learning, the two companies continue to grow together, with a significant potential to make Industrialization of Construction® happen, in markets beyond commercial construction.

Work Environment Management LLC certified as Women's Business Enterprise

Work Environment Management (WEM) LLC has been officially certified by WBENC as a  Women's Business Enterprise (WBE). 

WEM, LLC is authorized to sell MCA, Inc’s software WEM, LLC customers can use the Buy-Track-Save™ model and see results quickly. Buy JPAC® and SIS®, Track your productivity and be on your way to Save. WEM, LLC has a proprietary onboarding that is unique for software sales. They are with you every step of the way on launching the software, and therefore savings, for your company. Then when you’re ready, WEM, LLC can also provide scheduling services to help with your business transition and support your communication with your GCs/customers. For more information, please
contact info@wemsoftware.com.

WEM, LLC. is excited to provide an update on the progress of some of our clients with representation on the East Coast, West Coast, and the South!

In-West Electric out of Goodyear, Arizona is very successful in using the Agile Construction® tools over several years. They’re the strongest user on any size job. They’re also interested in and are the champion of our Agile Project Support class with the first one on November 11th.  
 
Oregon Electric Group (OEG) joins the WEM, LLC family as of November 2021, with a pilot project utilizing JPAC® and SIS®.
Frischhertz Electric out of New Orleans is demonstrating greater usage of the Agile Construction® Tools to actively manage dozens of jobs. The company increasingly uses the tools on smaller jobs with fewer labor hours. No job is too small! One hour of planning can save up to 18 hours in the field – a huge saving for small jobs!

All-Brite Electric out of West Haven, Connecticut continues their Agile Construction® journey.  All-Brite has invested in the additional Agile Support package which means support on job reviews and more tailored guidance on the tools. The next steps for them will be continuity of the tools within the team and sharing the benefits of the Buy-Track-Save® model across the company and on more jobs. 

Dodd Electric, Nashville, Tennessee, kicked off their Agile Construction® usage in Spring 2021 and are expanding their Agile Construction® training throughout the company.

 

CEO Interview Summary

The job of a CEO is all-consuming, intense and complex – spanning across a variety of organizational topics and involving a wide array of stakeholders. Hence, time is the resource of acute scarcity for every CEO, and the way CEOs allocate their time and prioritize their involvement is crucial for the success and sustainability of the company. Despite the significant economic and social importance and contributions that many private businesses and their CEOs across the U.S. have, the majority of research has been performed with executives and CEOs of public companies. 

MCA’s R&D Department initiated a research in 2021 to investigate “CEO Success” in smaller and privately-held companies, as a service to the CEO Forum  that was initiated by Dr. Perry in 2015.  Here are the premises of the investigation:

  • The CEO’s work is often not understood or visible
  • Although CEO’s are in rare company with each other, they are not alone and could use an interface to learn from each other
  • The CEO-Forum was built to focus on the position, not the person; what are the key traits that lead to CEO success?
  • Investigate and use results to benefit closed companies

After mapping all members of the CEO Forum, MCA R&D developed the lowest common denominators of CEO behaviors and how those map to personal, company, and society success.  We have developed a CEO Litmus Test that allows CEO’s to position themselves and potential future leaders for their organizations.

Contact us to learn more about the research study and if you are interested in participating in an interview.  We will be working through the CEO Forum to publish a white paper of the full study results through MCA R&D. 


MCA Symposium 2021/2022 Highlights and Completion of the "Data Driven" Series

MCA’s Summer Symposium in Chicago was offered as a hybrid event for the first time in MCA’s history. This allowed us to bring together industry-leading contractors both virtually and in person. To exchange ideas on the latest on Agile Construction® usage. During our Summer 2021 Symposium we focused on: Agile Construction® - A Path to Industrialization Data-Based Project Installation where we welcomed nearly 40 participants from 9 different companies, during this event we covered topics that’ll show how the construction industry is on the journey to use science. As W. Edwards Deming, a famous data scientist, has stated, “without data, you’re just another person with an opinion”. The first step in the journey is to observe. Once there is an observation, then creation of a mathematical formula, after reservation and gather information, the following steps are taken.
    • Categorize
    • Quantify
    • Measure
    • Validate
We also discussed topics like getting buy-in from your team, having the skilled labor doing the skilled work, and using data to drive your decisions on the job site. Showing the benefits to solving the issues on the jobsite.

Which leads us to our Spring 2022 Symposium, focusing on Path to Industrialization: Data Driven Closure of a Job we will help you navigate topics like Improving your Cashflow for future jobs based on data, gaining long term benefits for future jobs, and being able to reduce all three types of risk.

2022 Symposium Flyer Click here.
To learn more about upcoming events please visit our website frequently.

Research Corner

How Industrialized is Construction?

As part of our 2020 research project, MCA, Inc. developed an “Industrialization Index” and Self-Evaluation questionnaire that allows companies to evaluate their own status of industrialization. The Industrialization Index Self-Evaluation is a 15-question assessment to determine the degree of industrialization (score between 0 and 100%) along the five steps of industrialization. The questionnaire evaluates which and how frequent certain practices, measurements, or operational models are applied within an organization, and creates an individual score for each of the five steps as well as an overall industrialization score based on the given answers. The score can help companies locate where the currently stand on the spectrum from traditional, transitional, and industrial, and help identify the areas for improvement towards industrialization.


Overall, the results from a total of 92 local and national operating contractors across the U.S. of all sizes who completed the self-evaluation suggest that the majority of contractors still operate in a traditional and people-focused model that is largely technically oriented and relies heavily on tacit knowledge of individuals, particular of skilled-trade labor, their experience and memory (see Figure above).

Read about a detailed discussion of the Industrialization of Construction® in our upcoming publication “How Industrialized Are You? Measuring Your Company’s Progress” in CFMA Building Profits Magazine (Nov./Dec. 2021), or contact us directly with any questions about the Industrialization Index Self-Evaluation.


Research Projects

a.     “What’s Next after Prefab?” – A focus group study for ELECTRI

In the first quarter of 2021, MCA conducted a new format for ELECTRI International research in form of a Focus Group. We facilitated a focus group discussion on “What’s Next after Prefab?”  After conducting so many studies on Prefab, ELECTRI asked us to investigate where its members truly stand today and then guide a forward-looking session that would help the participants see the gap of where they are today vs. “What’s Next.”  Approximately 34 registrants expressed interest in joining the discussion, representing a cross-section of large and small electrical contractors across the country, including distributors and manufacturers who also joined to represent the supply chain. 

In essence, the industry, driven by owners and end users, is demanding an increased amount of work to be done using prefabrication, increased quality in the prefabrication process, and a significant increase in the demand for planning and coordination across trades facilitated with enhanced use of BIM tools and standardized quality controls in an extended multi-trade prefab environment. This future environment will be based on the principles of Externalizing Work® but will look very different as complete systems and subsystem fabrication replaces simple assemblies, and as multi-trade coordinated fabrication planning, assembly and installation become the expected norm.

    The final report from the focus group is forthcoming, and a brief highlight is now available through our CFMA Channel, in an article just published this week that we will be posting to our website soon.

 

b.     Industrialization of Construction®: Signal or Noise? Threat or Promise?


MCA’s 2020 research project “Industrialization of Construction®: Signal or Noise? Threat or Promise?” investigates how Industrialization will continue to unfold in construction and provides a means of getting and staying ahead. During the research, MCA, Inc. developed a guidebook and two self-assessments to help contractors to move forward on the trajectory towards Industrialization.
      
 • Get the Research Report: Click here.
 • Contact us for any questions



c.     Estimating with and Pricing of Prefabrication

Contractors need a practical way to quantify the benefits and cost-saving potentials of prefab. A Prefabrication Calculator will help contractors translate the total savings from prefab and Externalizing Work® into an equivalent composite rate as a practical method for “pricing” estimates with prefab to provide owners and estimators a way to account for prefab when bidding new work. This deep-dive prefab study focuses on risk mitigation, higher predictability of cost, quality of work, and profits.

• Get the Research Report: Click here.
• Contact us for any questions about the prefab or the research study

TPAC™ - Tracking Profit Accounting with Control

Do you think horse trading goes on in your jobs, or in your company?  Independent of your answer, read our article on the topic to see for yourself. After decades of work in the field and productivity measurement using JPAC® and SIS®, MCA’s development team worked on a new product in 2021 called TPAC™ to put an end to horse trading.  TPAC™ focuses on improving owners and project manager’s control over their projects’ financial performance with more accurate, earlier and more reliable projections of the end-of-job results. TPAC™’s strength comes from its unique capability to interconnect with JPAC® and use its unique productivity-based labor cost projection methodology, when available; or accept the essential field data as used by JPAC®. Meaning that whether or not you are a current WEM Software user; TPAC® is your strongest source of reliable financial projections for every regular. Nothing else you have tried can produce a more accurate projection and reliable project financial status. 

Contact our Sales Department for a demo and pricing information – either as a complete package or as an add-on to your existing WEM Software subscription. 

DCI™ - Digitalization, Commonization, and Interconnection

DCI™ is the next-generation Agile Construction® software application for the construction industry providing a digital solution to translate each of your team members’ tacit knowledge into explicit knowledge. Through consistency of processes, procedures, and tools and by interconnecting all involved functions and data sources, such as Estimating, Procurement, Project Scheduling, Work Breakdown Structure, JPAC®, Accounting, Financial Reporting you gain a seamless data-driven tool for work environment management (WEM®), data analytics, and strategic decision-making.

In August 2021, MCA Inc. released the “Pipeline & Backlog” module as the first component of DCI™. More than an effective construction CRM, this module provides input control, resource planning and strategy insights for executive planning and decision making. Having this level of visibility of potential and future work provides your business an ability to benefit from enhanced workflow management for capturing market opportunities, meeting budgets, beating estimates, achieving your highest project profitability.

The upcoming v.1.3 release in November will include features to manage multiple proposals per project, bid versioning & bid revisions, a redesigned project and proposal page, as well as many other performance and usability improvements.

Click here or contact our Sales Department to request your DCI™ demo today!


Publications

We published more articles in 2021 than any prior year, due to our ongoing work to connect theory with practice, science with application, and principles with models. With our new website release at www.mca.net, finding all of our articles will become much easier. During the past quarter, the following articles have been added to our 2021 publications:
    • EC&M Jobsite Intelligence (June): Invisible Decisions – Part 2: The article summarizes the extend of lack of visibility in job-related issues and decision-making by pointing out that field personnel experience twice as many obstructions in performing their daily work as managers realize. The article offers step-by-step guidelines for uncovering the hidden issues that kill job productivity and demoralize field personnel.
    • CFMA Building Profits (July/August) – SUPPLY CHAIN DISRUPTION: Are You in the Construction or Logistics Business?: This article will explain various procurement models, their advantages and disadvantages, and their requirements for success. 
    • EC&M Jobsite Intelligence (August) – How to Maximize Your Money with Change Orders: In this article we summarize our research with industry partners  on derailing the original project schedule and flow, not recognizing and reporting these changes promptly, and extra labor costs that’s consumed by existing labor overage or productivity losses already present in the original scope of work. 
    • CFMA Building Profits (September/October) – Are Preventers the Real Heros? Preventing Risk Pragmatically with Data: This article will review a reliable process of risk management in the construction industry and help you build a system to measure, correct, and project to reduce the risk of unknown outcomes.

    "Well done! We’ve certainly seen the benefits of the systematic planning and processes throughout all phases of construction and cost projections since we first started working with MCA. In many ways our risk mitigation is drastically better than it was within the last 10 years. There are simply far fewer surprises at the end of the job than there used to be! Keep up the good work!" ~ Mike Regan, FB Harding Inc.

    • IEC Insights (September/October) – Change Orders- A Curse or a Blessing?: This article will highlight change orders and how to use change orders to your advantage by identifying the three risks that are associated with change orders, how to create a change order checklist and how to reduce the risk that is associated with change orders.
    • EC&M Jobsite Intelligence (October): Pitfalls of Owner Supplied Material: This article outlines the three models of procurement that has been identified through industry research, as well as the three types of risk that you are trying to manage on a job.
    • CFMA SUPPLY CHAIN DISRUPTION: Are You in the Construction or Logistics Business? Read what Fred B Sargent, President of Great Service Forums, had to say about our recent article, published in the August issue of CFMA magazine.

    “This is packed with so much knowledge that, if a college or university were delivering it, they’d make it into a two-semester course! It’s worth reading word‐for‐word to avoid missing something, there’s simply so much to it. Luckily, that describes the reading technique of most finance and accounting people. This is a seminal article about the real nature of construction in 2021. It begs for a sequel.” ~ Fred B. Sargent, President of Great Service Forums    

    Visit our MCA publication section to view and read all of our latest articles and publications (and more)!

    Other publications you might also be interested in:

    • New Book Preview: Agile Methods for Continuous Improvement

    We are excited to announce that our MCA team is working on a new addition to the series of MCA’s Agile Construction® Books.

    The new book titled “Agile Methods for Continuous Improvement” builds on the Agile Construction® Principles and provide insights into the required supporting structure for Agile Companies and guide through the fundamentals and How-Tos of process design and process improvements.

    Outreach Corner

    Agile Classes Highlights

    Building off our virtual course offerings we are starting to transition back into face-to-face class offerings for 2021 and hopefully more in 2022. We continue to offer our most popular Agile Construction® 101 and 201 Workshops virtually for ease of participation across the nation. To date, we have hosted more than 18 individual workshops and classes during the first three quarters of 2021 with nearly 250 electricians, prefab managers, project managers, and executives participating in our education program.

    We continue to offer a large variety of courses throughout the year ranging from our most popular Agile Construction® or Project Scheduling Workshops. We are also always updating and expanding our education program and course offerings. Our new classes and workshops in 2021 are:

      • Agile Construction® 301
      • Project Support Agile Construction®
      • Agile Construction® for Executives
      • Prefabrication and Externalizing Work®






    Be sure to check our Course Catalog to see a full list of course offerings and visit our website to stay up to date on upcoming class offerings.


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