How Contractors Can Use Continuous Improvement to Tackle Inefficiencies
See more in this section
  1. Home
  2. Company
  3. News
  4. How Contractors Can Use Continuous Improvement to Tackle Inefficiencies

How Contractors Can Use Continuous Improvement to Tackle Inefficiencies

07/22/19

As the construction industry changes, a contractor can evolve its business using an ongoing, solution-focused review process called Continuous Improvement (CI). However, the success of CI will depend on the culture of the company.

At Miller Electric Company, a national contractor, employee engagement has been key to driving progress. Popular, practical improvements depend on feedback from the whole team, and according to Miller’s Pre-Construction Manager, Marshall Stowers, the best ideas can come from anywhere.

“Someone will catch me in the hall or see me on a jobsite and stop me and say, ‘Hey, I just thought about something that might be a good Continuous Improvement initiative for us to work on.’”  

One local branch suggested posting a “crew talk board” in the field — a weekly, detailed, work plan, visible to everyone. While it has improved communication, it’s also led to benefits Marshall didn’t expect. 

“We’ve had crews where people see, I've got two days to get this done, [and say] ‘I can get it done in a day and a half -- watch this.’ It creates a competitiveness that we're seeing some efficiencies come from.” 

How Efficient Is Your Jobsite?

A successful and profitable install is the heart of a contractor’s business, but according to MCA the average electrician ends up spending 40 percent of their time on the job managing materials.

The long supply chain connecting manufacturers to a jobsite often has spots of rust – small process breakdowns that lead to wasted work and resources. Shipments can arrive damaged or incorrect, extra inventory can pile up or be misplaced, and valuable equipment can sit idle. Skilled workers can spend time waiting on deliveries, and redoing work that wasn’t done correctly the first time.

Meanwhile, in the back office, an average purchase order costs $75 to process. Each PO then generates an acknowledgement, which turns into a delivery, and an invoice, and possibly a return — a compounding cycle of cost and labor too expensive to ignore.

According to a number of studies, only 35 percent of an organization’s time is spent on work that adds value or keeps the business running. The rest is divided between unnecessary work and time spent not working, either authorized (e.g. holidays) or unauthorized (delays). 

By targeting these areas of waste, contractors can close the efficiency gap in their business. “You're making a conscious decision to identify areas where you have room for improvement and then you work to make them better,” Marshall said. “Sounds pretty simple, right? Not always the case.”

What Is Continuous Improvement?

Of the many ways to think about organizational change – Six Sigma, Lean, Total Quality Management, and more – Miller Electric prefers a strategy called Continuous Improvement.

It’s a practical four-step cycle of “Plan-Do-Check-Act”: identify an issue, implement a solution, measure the results and learn from the outcome.

The process is structured, but open-ended. Although an issue might get resolved, better solutions are always possible in the future. 

It also starts small, focusing on specific examples of waste which add up to create broader efficiency problems.

In one Graybar study, a contractor used CI to address an unusually high number of returns, and saw POs drop 80% in frequency and 72% in cost. Before using the CI process, they spent five hours a week handling POs; afterward, it only took 30 minutes.

But despite the potential benefits, only 20 percent of contractors surveyed by Graybar have attempted a CI project.

How Miller Electric Built a Culture of Continuous Improvement

“The fact of the matter is, not everybody in an organization wants to change,” Marshall said. “There are a lot of companies out there, and a lot of people, that are content — happy doing things the way they currently do them, and the way they've always done them.”

It’s important to get the backing of senior management who can allocate the time and money necessary to push through a major improvement. 

“Cultures, just like people, can take five years to change, and that's a big investment,” Marshall said. 

Engaging Miller’s C-suite, however, wasn’t enough. The entire company had to get on board.

Acronyms were a quick, catchy way to unite employees around a common purpose – T.E.A.M stood for “total excellence across Miller”.

Now, Miller regularly asks for feedback on new improvements from field employees, in addition to management. Each quarter, foremen and apprentices gather for separate meetings, pulling folding chairs up to a long conference table and sharing stories from the field. 

“We take time to talk about some of the challenges they're up against … and really engage them to have a voice in what kind of initiatives we work on,” Marshall said.

Collaboration Leads to Efficiency

Often, these conversations reveal problems further up the supply chain which need the attention of a logistics specialist.

A distributor can make improvements in the purchasing process that help cut the time workers spend managing materials on site in half.

Traditional pallet shipments, for example, take a long time to unbox and inspect -- especially when they contain fragile parts like lighting fixtures. Graybar began delivering unpacked and sorted fixtures to Miller jobsites, arranged in carts that could be moved within 30 feet or 30 seconds of key work areas. Custom QR codes on each cart directed install according to the project blueprint. On a similar jobsite, carts like these have reduced the average fixture install time from seven to two minutes.

Similarly, Graybar began delivering wire on moveable, customized, SmartReels®, sorted and ready to pull. 

Graybar and Miller also streamlined the prefab ordering process, creating “bundles” of parts so Miller employees could simply order a quantity of common assemblies, instead of a list of individual items.

With input from all along the supply chain, Miller’s CI strategy continues to add up practical changes for big gains in overall efficiency.

As they focus on new problems, the CI process stays constant – so each solution makes the team better at tackling the next issue they find.

“Our industry is constantly changing, and we have to be ready to change with it,” Marshall said.

If you’re ready to implement a continuous improvement process in your own company, contact your local Graybar representative to schedule a Supply Chain Waste Walk and see how we can help.