• Newsletter Subscriptions
  • Magazine Subscription
    • Image
    1. Construction
    2. Business Management

    Mastering the Electrical Work on a Mega Project

    July 23, 2012
    Overcoming the challenges of managing an extensive electrical project

    Imagine being given the task of managing a 500,000-hour job scheduled to take place over the course of four years. Most contractors and electricians would jump for joy if they landed a project of this magnitude. An undertaking of this scope, however, carries with it a myriad of challenges and complexities. To help you realize the many factors involved in such a large project, let’s analyze and review a job that IES Commercial secured in 2009.

    Ecmweb Com Sites Ecmweb com Files Uploads 2012 07 207ecm Mc Apic1

    Put simply, a large job is really a group of small ones strung together. Nevertheless, this particular $65 million endeavor was greater than the annual revenue of 90% of all the electrical contractors in the United States and Canada. Managing such an enormous project requires extraordinary skill and know-how. Day-to-day challenges on a variety of issues include:

    • Resources — in this case, an unknown labor force
    • Schedules
    • Purchases
    • Billing and cash flow
    • Productivity
    • Subcontractors
    • General contractors
    • Turnover
    • Substance abuse
    • Cost
    • Lack of visibility at the task level
    • Coordination with other trades
    • Material price escalations
    • Job-site logistics, including tool and material movement.

    The required tools for management and mitigation of the technical, business, and integration risks have to be in place, trusted, and used if you want to safely navigate the difficulties of such work. In addition, plans for organizational structure, reporting structure, information flow, and other elements must be made. Although the tendency of many contractors is to treat this type of project as “a typical job,” this mind-set can lead to major problems and financial loss. Let’s review the processes and procedures that were used in this example to manage the risks and potential pitfalls.

    Setting the Stage

    Because this particular electrical project stretched over four years, it would be tempting to compare it to working on four individual $16.25 million projects per year — but it’s not that simple. The difference on this project was that supporting infrastructure had to be shared with all other projects running simultaneously.

    To organize this massive job for daily, weekly, monthly, and annual management — in addition to the traditional project and cost tracking tools — we set out to add quality and integration tools to assure continuous monitoring and correction during the job progress. Mitigation of the risks was clearly divided between:

    1. Technical Risks, which are electrically driven, such as: Code; inspection; design (including architectural, structural, and MEP systems); installation requirements; durability testing and QA/QC; contamination testing; electrician’s knowledge; as-builts; and submittals.

      The above risks were managed with industry-standard procedures, processes, and tools.
    2. Business Risks, which are monetary in nature, such as: invoicing; timesheets; material purchases; subcontractor’s payments; bonding; insurance; change orders; cash management; project organization structure and personnel; and profitability.The above risks were managed with IES’s existing business and financial management systems.
    3. Integration Risk, which is defined as bringing and aligning all of the pertinent elements needed to install the job, such as manpower, material, and money.

    These risks possess the most critical and unknown factors during the progress of any large or small project. Any mishaps at the intersection of the three elements listed above are due to integration risk. These included but were not limited to:

    • Coordination with other trades for design, layout, and physical work space
    • Scheduling of work
    • Reporting on work and quality of work
    • Response to changes onsite
    • Material problems, including logistics, and lay down areas
    • Managing requirements of the daily work, the entire project, the company, and the environment, such as the general contractor, engineers, and architect/owner.

    Managing the Work

    Work Environment Management™ (WEM) was the tool used to manage the integration risk throughout this project. WEM relies primarily on usage of the newly developed ASTM standard for construction Job Productivity Measurement (ASTM E2691) as a feedback mechanism (see “Measuring Productivity in Construction” from the March 2011 issue of EC&M or visit http://ecmweb.com/training/measuring-productivity-construction).

    Starting with the project schedule, the following elements of integration were set in place:

    • General’s scheduled-plan (GSP)
    • Work breakdown structure (WBS)
    • Job productivity measurement (JPM) — Set up, usage, and reporting
    • Electrical scheduled-plan (ESP)
    • Three-week look-ahead scheduled plan
    • Short interval scheduling™ (SIS) — set up, usage, and reporting
    • Change management process and protocol.

    For this article, we’ll explain IES’s approach to setting the elements in place for managing the integration risk of this project.

    Initial Setup

    Due to the size of this project, one of the first elements of WEM that was built was the WBS. This helped the project team see the project from the vantage point of the true work. IES had received little information on the GSP early on, but the job still had to be built. By putting together a WBS (Fig. 1), the job became visible and manageable in smaller sections. Once the WBS was created, the JPM baseline was established, and the project manager for IES could then track job productivity on a weekly basis.

    In addition to the JPM setup, establishing SIS tracking was critical for the project, because it would be physically impossible to know what obstacles 100+ electricians encountered on a daily basis. The initial SIS reporting was set up to come in from a handful of lead electricians. However, as the project grew and became more complicated, the project manager decided to expand the usage to 15 field managers, each providing input on their crews’ ability to finish scheduled work (on a daily basis) — and what was getting in their way of doing so.

    With the JPM and SIS tools in place, the job became more visible for tracking the special and common causes of variation on the project’s overall productivity. A weekly review of both measurements involved the project manager, senior project manager, and east region director of operations.

    Review of the Job Information

    In the weekly review of the project, the job’s overall productivity was reviewed and analyzed. Figure 2 shows the overall job productivity trend for the entire project. From here, the trend was broken down into cost codes to see what was driving the overall trend (Fig. 3).

    Figure 3 shows how the cable tray was specifically problematic, revealing less-than-anticipated productivity from the labor productivity reference point. However, heavier weighted cost codes, such as feeder wire and feeder conduit, were performed with higher-than-expected productivity on the project. Because those codes comprised a higher weight of the project’s overall budgeted hours, they helped the overall job productivity stay above baseline, as noted in Fig. 2. Special causes of productivity variation were identified, explained, and noted for further investigation on a weekly timetable. For example:

    • Cable tray (the blue line in Fig 3) became problematic because of the amount of coordination that was needed in the field to install it. Photo 1 shows an example of the tight space in the ceiling with multiple systems, including cable tray.
    • Branch conduit (the yellow line in Fig. 3) trended slightly downward due to working in congested areas on the job site where other trades were present. Photo 2 shows other trades’ material being in the way of areas where branch conduit needed to be installed.
    • The feeder conduit cost code (the purple line in Fig. 3) went very well on the installation, according to the crew and work observations.

    Ecmweb Com Sites Ecmweb com Files Uploads 2012 07 207ecm Mc Apic2

    SIS outputs were also reviewed in this weekly meeting to determine what obstacles were causing daily ups and downs in scheduled work. The overall job’s Pareto Chart of obstacles showed that 11% of total scheduled hours of work was impacted by obstacles. The largest obstacle was “other trades not complete” (Fig. 4).

    Half of the trade interferences and waiting on trades was due to working with the masons. When the masons were laying their courses of brick, IES employees had to “stand by” and wait to insert their conduits. This resulted in a great deal of non-productive time, which affected the schedule. When the project manager and his field managers saw this, they approached the masons to see if they could get a little better “forecast” of what walls they planned to work and when so they could layout their own electrical daily work schedule in a more efficient manner. Once the mason interference declined, the job productivity increased (Fig. 5).

    Absenteeism plagued the job daily, which is to be expected when trying to manage a crew this large. To combat this issue, the project manager used SIS input to determine if there were common absences or issues causing absence that needed to be addressed. Upon closer assessment, it was discovered that the relaxed procedures regarding personal days off (PDO) without adequate advanced notice to supervisors and foremen for coordination purposes could have caused superposition of how many people can take PDO at the same time, leading to unwanted consequence of absenteeism. MCA’s own research from SIS data across the country indicates that absenteeism is one of the top five reasons for not completing work according to the schedule.

    Using the WEM Output to Manage Integration Risk

    In addition to weekly reviews of productivity trends and obstacles, the project manager also used the original WBS and weekly input from the JPM observed % complete to develop an ESP that coincided with the GSP.

    The senior project manager and the east region director of operations were able to use the trends showing up in the JPM outcome as a reference point. Additionally, they were able to pinpoint areas where they needed to escalate issues or help respond to problems the job had encountered. They were also able to correlate the WEM reporting with overall project financial health in a quarterly “audit” process.

    Conclusion

    Running a large project is not unlike running a company, with the difference of pace and the amount of risk involved in one large undertaking. The technical and business risks alone on a job of this magnitude must be planned and managed with your company’s best people and quality procedures. However, it’s crucial to understand that the integration risk is the largest unknown and has the fewest tools available in the industry to manage. Setting up a WEM system is a first step to making this risk visible. IES’s success on this project was its usage and response to the information provided by these types of processes and measurement/tracking tools.  

    Dr. Perry is president and CEO of MCA, Inc., Flint, Mich. Moore is vice president of operations. They can be reached at [email protected] and [email protected]. Werner is east region director of operations for IES Electrical; Warwick is a senior project manager. They can be reached at J[email protected] and [email protected].

    Voice your opinion!

    To join the conversation, and become an exclusive member of EC&M, create an account today!

    Continue Reading

    Sponsored Recommendations

    Latest from Business Management

    In the typical facility, the plant manager has X amount of discretionary spending power that can be directed toward a single purchase. At each level of management down, discretionary spending is stepped down into smaller amounts. Anything beyond a given manager’s limit must be appealed to the next level up. For example, the Plant Engineer can’t quite swing a purchase of $5200 but the Plant Manager can approve it. This informal arrangement reduces corporate overhead and improves operational efficiency. It does not address whether the spending decisions would make financial sense to the Chief Financial Officer, but the cap at each level keeps any mistakes to a reasonably acceptable loss or misallocation of resources. Beyond the Plant Manager’s limit, there is usually a formal process for getting spending approval. It typically involves filling out a Capital Request (or similarly named form). In well-run companies, the form is very structured. It mostly wants some basic information that will give the reviewer(s) the ability to justify not just the purchase but also the cost of acquiring the capital to do so. Because the funds will typically be borrowed by the corporation, the cost of capital must be balanced against the return on investment. There will be at least one person crunching the numbers to make what is called “the business case” for the proposed spending. Making the business case is something you should do, in some way or another, when considering spending within your approved limits. If the spending is above your approved limits, then the manager above you will need a bit beefier of a business case. The business case must take into account the value obtained versus the money spent. Consider the purchase of a thermographic camera. If you intend to purchase a mid-range camera but nobody at your facility is trained and certified in its use, the purchase is probably a waste of money. You’d be better off getting an entry-level camera and then arranging for a path toward certification if you intend to have that ability in-house and it makes operational and financial sense to do so. And generally, it makes sense to have a person or two with Level I certification so they really understand how to get the most out of a camera system that’s beyond the basic level. On the other hand, if you were a manager at an electrical testing firm with several Level III Thermographers you would be wasting your thermographers if you decided to “save money” by equipping them with only basic or even intermediate camera systems. Your firm needs to be able to troubleshoot problems when that important client calls in a panic. Your thermographers need the tools to do that job, and “cost-saving” on camera systems won’t cut it. Presumably, your clients are smart enough to already have basic camera systems; they just don’t have the expertise to use advanced systems. Sometimes a different logic applies to other types of test equipment. In the typical plant, maintenance electricians need sophisticated DMMs. If they lack the training to use the features that are needed for most effectively keeping equipment running, simply choosing a less capable DMM they already know how to use is not the answer. They need the appropriate DMM along with the training on how to use those features correctly. So far, we haven’t looked at the need to crunch any numbers to make the business case. What we have done is think about the match between the purchase, the problem that needs to be solved, and the ability of the user to solve the problem using that purchase. This sounds like a common sense approach that everyone would naturally take, but people often lose sight of the reason for the purchase in the first place. The tendency is to either go all out on something they can’t use or don’t need, or to “save money” by shortchanging the end users with something that doesn’t allow them to do what they need to do. What about those numbers? When you do a purchase request, a bean counter is going to try to determine the cash flows involved (typically in monthly periods). If you write something like, “The payback period is three years,” they don’t find that helpful. Lenders care that a loan can be serviced, and cash flow is the critical factor in calculating whether it can. Thus, beancounters don’t use payback to determine whether they can afford to borrow. They use the Internal Rate of Return (IRR) or Modified Internal Rate of Return (MIRR). Formulas for both IRR and MIRR have been in spreadsheet programs for over two decades, but before that they were determined using a Business Math Calculator (about $150 in 1990). And before that, they were laboriously calculated by hand. The cash flows that are charted will be either additional revenue generated or losses prevented. To help the person who figuratively wears the green eye shade, tie the use of the test equipment to a revenue stream. A major appliance plant in Tennessee has several production lines that collectively produce $1,560,000 per hour of revenue. Thus each minute of unplanned downtime is quite costly. If the plant electrical engineer there wanted to upgrade test equipment in a way that exceeds the Plant Manager’s spending authority, he needs to help the green eye shade guy do the math. He can cite short case histories from the past two years and briefly explain how having X capability (present in the new equipment, absent in the existing equipment) would have saved Y minutes of downtime (which the green eye shade guy will calculate out in terms of revenue and cash flow). The green eye shade guy also needs to know whether each case history is a one-off that will never recur or if it’s representative of what to expect in the future. You can settle this question with a brief explanation. For example, “The responding technician did not have a [name of test equipment]. Consequently, he had to arrive at the same conclusion by other means to the tune of 24 minutes of downtime he would not have incurred if he’d had a [name of test equipment]. This problem occurred once on Line 2 and twice on Line 4.” Now the green eye shade guy can simply add up the downtime, monetize it, and create the cash flow analysis. And it’s really good for something like a power monitor. For example, “In this particular case the plant did not have a monitoring system capable of detecting short-term bursts of power, which we call transient spikes, and alerting us. Transients happen with no notice, and usually without being detected. The motor shop forensic report shows the main motor failed due to winding insulation failure caused by transients. With a power monitor detecting and reporting those transients, we would have been able to intervene before outright failure, on a scheduled basis. That would have reduced downtime by 57 minutes twice last year alone.” Making the business case for your smaller purchases means simply thinking about what you are trying to accomplish and then making sure you are spending the funds correctly to achieve that goal. But as you go up the food chain, you need to make the picture more clear. And when you appeal to corporate for approval, you need to provide reasonably accurate downtime savings numbers that can be converted by them to revenue loss prevention in specific dollar amounts.
    Man staring at wall with hand-drawn question marks and money bags on it
    ID 4102068 © Igor Lovrinovic | Dreamstime.com
    Natural gas tank
    Courtesy of Weifield Group
    Weifield Group

    New

    Sponsored