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Mechanical Contractors Enhance Efficiency With Prefabrication

Up until 2009, Cincinnati-based TP Mechanical used prefabrication for its industrial, commercial and institutional projects sparingly—attributing about 4 percent of total field labor hours to the shop. But with the growth of coordination, drafting and 3-D modeling, the company saw the potential for additional fabrication opportunities.

“We moved into a new 45,000-sqaure-foot facility and we made a very concerted effort to equip it with the right machinery and state-of-the-art software,” says TP Mechanical President Bill Riddle. “Now we’re averaging 20 percent of field labor hours in our fab shop.”

In the past five years, the shop workforce has grown from 12 people working one shift per day to about 40 people working two shifts daily. Riddle’s goal is to funnel enough work to the shop to warrant three shifts.

Shapiro & Duncan, Rockville, Md., is experiencing similarly impressive growth in the Mid-Atlantic region, where it has completed more than 2,000 commercial, government, institutional and high-rise residential projects during the past three decades. The firm opened its first prefabrication facility in 2002 and, upon realizing how well it was working, invested in a 51,000-square-foot shop in Landover, Md., just five years later.

“We saw it as an industry trend,” says Mark Drury, vice president of business development for Shapiro & Duncan. “We couldn’t get enough skilled craft professionals, and we couldn’t control workin the field as well. We were already doing coordinated 3-D drawings, so fabrication was the next step.”

Other drivers included incessant pressure from clients to keep prices as low as possible, the ability to meet lean requirements, the lack of skilled labor and the safety benefits of working in a controlled environment. Today, Shapiro & Duncan fabricates components for every job it wins, and CEO Sheldon Shapiro estimates the firm’s prefab operation has tripled in the past decade.

“The economy hasn’t been very good for the last five years, but the amount of prefab we’re doing has grown, as has the detail of the work,” he says. “To give you an idea of the culture change: We used to ask what we’re going to prefab; now we ask what aren’t we going to prefab.”

Less Waste and Higher Productivity
In a sign of TP Mechanical’s commitment to prefabrication, the company recently underwent a two-year process to be certified by the International Organization for Standardization (ISO)—one of the first shops to do so in the Midwest. The certification reflects independent third-party verification of the shop’s quality management systems.

“It was a way for us to build and enhance our quality control,” Riddle says. “We’re doing the same procedures every time, which aids productivity.”

Standardization is key. TP Mechanical organizes its fabrication department into specialized work groups consisting of highly trained tTP Mechanical, Christ Hospitalechnicians who are singularly focused on the production and assembly of assigned units and modules. Additionally, automated equipment ensures the consistency and quality of every cut and weld. Each piece of pipe is utilized to the max, with software taking into account every length needed for a job. 

“There is a reduction of materials waste, as well as a reduction of packaging and shipping materials,” Riddle says. “Instead of sending nuts, bolts and washers to the site, a whole unit can be produced here and shipped out. Little by little, those things add up.”

Beyond individual components, TP Mechanical fabricates larger units, including the walls that house medical gas equipment for health care facilities, or piping and packaging entire pump and boiler systems. Work done onsite five years ago now can be completed in-house more safely and with better quality control.

Looking ahead, multi-trade prefabrication—requiring shop-level collaboration among mechanical, electrical, insulation and other subcontractors—is expected to gain momentum. Shapiro & Duncan has done this on some projects it controls (i.e., when the electrical contractor works under Shapiro & Duncan) in order to prefabricate entire mechanical units. Not surprisingly, this approach requires more culture change.
Shapiro & Duncan, UK
“Multi-skilled prefab has to originate in the beginning of the project. It has to be a defining feature of how the project is going to be designed,” Drury says. “We invest a lot of intelligence upfront to do the drawings and coordination because once you prefab, it has to be right. A lot of owners and designers are used to passing off the grunt work, and once the design is partially completed they’ll bring in more experienced people to take over. That investment should be done at the beginning.”

To help bridge the gap, Shapiro & Duncan organizes shop tours and hosts lunch and learns to show general contractors and clients how BIM is being used in real life—not just as a showpiece for the owner to fly through, but as a tool for productivity, quality and sustainability. Indeed, as more subcontractors have adopted BIM, coordination drawings have become more accurate, which in turn makes prefabrication more accurate.

“It’s not an expense for us to do BIM because we offset those costs in the prefab shop,” Shapiro says. “We save time, we don’t need as many people onsite to do the work, and the general contractors love that we’re not in their way onsite.”

Mechanical systems delivered just in time on skids can take less than a week to install. Overall, Drury estimShapiro & Duncan, Autodesk Fabrication CADmepates the company has seen productivity improve up to 13 percent compared to a few years ago.

Impact on Personnel
Even with all the known benefits of large-scale prefabrication—from accelerating installation time to ensuring pricing accuracy and eliminating weather delays and schedule conflicts—it can take time to convince in-house staff that this is the way of the future.

“There was a fear our fab shop would eliminate jobs,” Shapiro says. “But instead, it allows us to do more work, safer, at a higher quality level, and hire more people.”

One early project helped the company and its employees see the possibilities: A school system wanted a unit ventilator project completed over spring break. Every contractor told the owner it couldn’t be done, but Shapiro & Duncan was up to the challenge.
TP Mechanical, OSU
“The electrician, insulator, controls contractor and others completed their work together in the shop, and the onsite installation ended up finishing a day or two early,” Drury says. “It was a big selling point for the prefabrication process, for our people and for the school system.”

This year, TP Mechanical drastically reduced onsite installation of components for a utility plant supporting student housing construction at The Ohio State University (OSU). In addition to its usual services, TP Mechanical functioned as the prime contractor handling the underground work, tie-ins, building slab and construction, and electrical coordination. Workers fabricated 40-foot-long skids in the shop—shrinking fieldwork for the turnkey job from six months to six weeks.

“We have done a lot of work with OSU over the years, so they know our capabilities, but I think we surprised them a little on this job. We put ourselves in an even better light,” Riddle says.

There are positive labor results as well, which is crucial given the fact young people are entering the trades at a slower rate than workers are retiring. Riddle estimates 40 people working in his fab shop equal about 60 people working onsite. “Contractors are going to have to depend on prefabrication as the skilled worker shortage continues,” he says. 

Drury concurs, noting that it’s important to have the right mix of seasoned employees and “dTP Mechanical, OSUigital natives” involved in the prefabrication process. For example, Shapiro & Duncan’s 12-member CAD team ranges from recently graduated tech whizzes to foremen who have logged 30 years in the field. 

“This is a way to attract millennials,” Drury says. “They like to see the application of technology; they get engaged with things like the automated cutters being driven by the CAD program.”

As for existing employees, Shapiro says: “If they have the right attitude and a willingness to learn, they will succeed at Shapiro & Duncan.”  

Invest in Standardization; Maximize Productivity

Denver-based Maxim Consulting Group, LLC has been helping construction firms develop and streamline their prefabrication operations for the past eight years. Following is Managing Director Michael McLin’s insight on prefabrication trends and best practices.
Why interest is rising: We’re in a price-driven market, and supply and demand has been out of whack since the recession. When the economy is down, prefabrication is used to be more price competitive. When the economy is coming back, prefabrication is a strategy for contractors to do a larger volume of work without having to increase their workforce in the field.

Who’s getting involved: Companies with $10 million to $15 million in annual sales are getting serious about single-trade prefabrication. Larger companies are starting to focus on multi-trade fabrication.

The importance of pre-planning: In addition to finding space to build a prefabrication shop, the most critical business investment that needs to be made to drive scalable prefabrication is establishing a consistent design and pre-planning process. The development and implementation of standards is necessary to ensure consistent output at each step: design, pre-planning, prefabrication and installation. Standards also allow for the identification of constraints in the process that are slowing throughput. Additional resources should be applied to remove or minimize the constraints so design, pre-planning, prefabrication and field installation are in balance. The integration of these business processes is a complex task that must be executed at the executive level or with the input of outside expertise.

Productivity outcomes: Too often firms approach each job as if it was special. They need to stop thinking about prefabrication as unique to each project and start thinking about it like a manufacturer ofstandard products. Best-in-class organizations can pull 20 percent to 40 percent of their annual field labor hours into the prefabrication facility and execute the work at an average cost savings of 25 percent. Prefabrication also allows contractors to meet more aggressive schedules, which adds value for the owner and the general contractor. Companies that have standardized products and design assemblies have an opportunity to approach the engineer, owner or facility manager and compare what was specified to what the contractor manufactures and say: ‘If we’re allowed to use our standard product, we’ll be able to give the owner money back and the general contractor gets a quicker schedule.’ It’s a win for everybody.

Documenting costs:
As companies start incurring up to 40 percent of field labor hours through the fab shop, it’s a significant cost component that must be tracked. Companies must modify their cost controls to ensure the design, pre-planning, prefabrication and field installation costs can be budgeted and tracked in each disparate work step, as well as aggregated to
understand the total installed cost. By doing so, contractors will be able to evaluate their bid units and incorporate prefabrication into their pricing instead of pricing the work like it is stick-built and then arbitrarily cutting labor, which is the industry norm now.

The value of vendors: Many contractors try to manage the supply chain and beat up vendors on price. In reality, vendors are supply chain experts that can bring tremendous value to contractors through logistics support, process integration and vendor-managed inventory. Contractors should stick with their core competencies; don’t reinvent the wheel and try to become the expert on everything. The implementation of vendor partnership agreements and vendor-managed inventory is gaining momentum and should be looked at closely by a company considering how to improve its prefabrication operation.

Joanna Masterson is editor of Construction Executive. For more information, email masterson@abc.org, visit www.constructionexec.com or follow @ConstructionMag.

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