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The construction industry has been identified as consistently having had negative productivity growth since 1965. One of the factors significantly contributing to the low productivity within the industry is absenteeism. The annual cost of lost productivity due to absenteeism in the construction industry is estimated to be $1.3 billion. Absenteeism is defined as an employee’s habitual absence from work—usually intentional and without any good reason. 

Absenteeism is costly for electrical contractors. Since the cost of absenteeism on some electrical construction jobs has been as high as 20% it significantly impacts the overall profitability of an electrical construction project.  

With labor costs making up as much as 40 percent to 60 percent of an electrical contractor’s overall costs, a stable and productive workforce is essential.  

Below, we look at the economic impact of absenteeism on labor productivity.  

1. Loss in Revenue as a Result of Not Meeting Project Deadlines

Having fewer workers on site could cause delays in construction projects. Every day a project is delayed, additional costs are incurred to support the project. The burden of the costs lies on either the owner of the project or the contractor or both and translates to losses in revenue. Due to shrinking profit margins, electrical contractors need to do whatever they can to improve their profit margins. This means decreasing the rate of absenteeism.  

Unplanned absenteeism not only contributes to decreased revenue through project delays but also equates to inadequate planning— a common pitfall for electrical construction projects.  

2. An Underutilization in Capital Investments (e.g., Tools and Equipment)

While overmanning (increasing the number of labor crews that are above the optimum) can lead to a shortage of resources, having fewer workers could lead to an underutilization of investments. Seeing that companies invest a lot of money in purchasing equipment, the amount should be recovered during the useful period of the equipment. However, underutilizing resources could mean a negative return on investment for the company. 

Productivity arising from the utilization of equipment can only be ensured if equipment operation is managed effectively— a factor that cannot be met when there is a shortage of workers on site.  

3. Lost Efficiency in Work Crews with New or Inexperienced Members

To meet project deadlines, electrical contractors are forced to replace absent skilled workers with new workers. This may cause performance and safety issues and a higher cost per unit as a result of paying for the shift differential. Introducing additional workers also means disrupting the rhythm of ongoing projects by the original team. This disrupts the workflow and task accomplishment by the work crew.  

Intensive training of the new workers is required to get them familiarized with the project and site. This eats into the scheduled total time of the project. The original team may also be forced to work at a slower pace to guide the new workers or allow them to catch up with the project. All these lead to work inefficiencies impacting labor productivity.  

4. Administrative Cost to Recruit, Process, and Train New Employees

It is less expensive to keep employees once they are in the door than it is to hire new ones. Recruiting, hiring, and training are expensive. And so, the best return on investment a construction company can make is to attract and retain its workforce.  

However, with fewer workers on site and approaching project deadlines, firms have no choice but to take in new workers. Electrical construction firms may end up spending more than planned on hiring and training new workers raising labor costs and undercutting project profitability.  

5.  Increased Demand for Administrative Time and Resources for Planning and Rescheduling

Hiring new employees to replace absent workers not only costs money but time. Employers have to devote substantial time and resources to hiring skilled workers.  

This includes time associated with talent searches, which require time spent writing job postings, interviewing, screening, hiring, onboarding, training, and redressing mistakes that new workers make during their training stage. The time spent training a new worker is a fraction of the time lost during the overall hiring process.  

6. Lower Morale

 Absenteeism and low morale among workers are correlated such that a high rate of absenteeism could cause low morale which in turn could result in a higher rate of  absenteeism. Within the electrical construction space, absenteeism has been observed to result in a loss of goodwill among employees. Employees who exhibit poor attendance tend to get disengaged from work with time. The opposite is also true such that employees who are not fully engaged tend to exhibit poor attendance. All these affect the productivity of the employees at work.  

This has a huge impact on the economy. Disengaged employees are said to cost the American economy as much as $350 billion per year in lost productivity.  

7. Increased Overtime and Employee Fatigue

When bids are sealed and the contractors land the job, a specific period is set to have the project completed. To be competitive, firms are forced stick to the projected time and complete the project as specified. Therefore when employees fail to show up, others are forced to take up extra shifts to meet tight project schedules. When this occurs, employees suffer from fatigue which consequently decreases their productivity at work. 

Studies have shown that on average, a 10% increase in overtime results in a 2.4% decrease in productivity. The reason being that as more output is achieved, the number of hours worked increases.  

In a variety of ways, absenteeism impacts electrical contractors and the electrical construction industry. It is therefore essential to address the issue in order to improve project profitability .

Learn more about other issues facing electrical construction firms today.  

One of the main challenges facing the electrical industry is declining gross profit margins. In 2018 for example, profitability of the industry had declined by 1% to 4.1% of revenue. This presents a need to implement cost-saving solutions within any project  to increase the chances of making substantial profits.

Value-added solutions like our bundled cable are major cost savers that cut down on time and labor needed for projects. However, using other solutions such as estimation software not only saves time and money but improves the accuracy needed to stay competitive on job bids.

Here is a list of the 5 best electrical estimating software that estimators and electrical contractors can use to increase their profit margins.

1. Esticom

Esticom is a cloud-based estimation software built for electrical and low voltage contractors. It is known to improve the speed and accuracy of the estimation process by digitizing the process. This platform helps contractors manage projects with real-time access to labor, pricing, plans, and material database. With this kind of data, electrical contractors can generate accurate quotes and update estimates in real-time.

Computing costs can be quite time consuming and require a high level of expertise that is hard to come by with the labor challenges facing the electrical industry. Using an estimating software such as Esticom provides an affordable and effortless way to provide estimates in a single integrated package to simplify the process and reduce the hassle involved in creating accurate estimates.

2. TurboBid

TurboBid is an on-premises estimating software solution designed to help small and midsize electrical contractors complete project estimates. This software not only helps generate bid estimates but also offers several pre-built assemblies, including material prices and labor units. This facilitates real-time planning as well as easy adjusting of labor costs across multiple quotes.

Turbobid also provides a way of saving on costs by including material items that reflect pricing for up to 5 selected vendors. Using this data, contractors can compare market pricing for items accordingly as they change.

Other than the features described above, the platform offers customizable reports and bid packages that allow users to generate formal proposals, quantity take-offs, and bid estimates.

3. Stack

Like Esticom, Stack is a cloud-based estimation software known to be flexible, fast, and accurate. It is designed for all business sizes and trades. This platform offers a pre-built database that gives the user in-depth lists of equipment, labor, and materials of all common construction items—data that can be quite useful in creating detailed estimates for submitting accurate bids. This ensures contractors stay competitive in job bids and prevents them from experiencing substantial losses as a result of bids. Besides accessing useful data, through Stack’s estimating software, contractors can quickly and easily upload digital plans and complete takeoffs.

Stack allows electrical contractors to eliminate costly bid errors and win more profitable work.

With all the features Stack offers, it still boasts of being easy-to-use. Since it requires minimal electrical estimators can quickly learn to user it.

4. Countfire

Countfire is a simple to use automated take-off software, purposely built for electrical estimators. It eliminates the long hours it takes contractors to manually compute estimates.

Some electricians estimate that it takes them up to 4 hours per sheet to compute estimates for larger projects. This is time that could otherwise be allocated to other more profitable parts of the project. Countfire allows users to automate the process, freeing up more time for electrical contractors to look for other bid jobs.

The platform offers automatic excel spreadsheet creation, automatic counting of multiple PDFs, linear and area measurements, and automatic breakdown of quantities into areas. Just like Stack, Countfire is easy to use meaning its users can quickly be trained to use the software to provide accurate and consistent estimates.

5. Electric Ease

As suggested by its name, Electric Ease is a cloud-based electrical estimating software that is easy to use, easy to implement, and easy to understand. It is an estimation platform built for the electrical industry and targets medium to small electrical contractors looking to streamline processes, create efficiencies, and update old processes such as Excel or pen and paper estimating.

The software offers users reports that show the parts and quantities estimated into the project as well as time allotted. This enables contractors to order parts ahead of time if necessary. Its processes are also automated such that the platform can automatically create estimates based on labor and parts requirements which eventually helps in being competitive in job bids.

Electric Ease is also known to be great for both experienced and new estimators mitigating the worry of having estimates computed by new electricians that may not be as experienced.

Learn more about other challenges facing the electrical industry today.  

The electrical construction industry is a competitive market to operate in. The foundation to remaining successful within this market begins with accurate estimates to improve profitability. Poor estimates can result in massive loss of profits for a company. One of the effects arising from inaccurate estimates is overages.

Overages refer to expenses incurred during construction that can increase the overall cost of the project. Such cost overruns could mean the electrical contractor either makes less profits or, even worse, incurs a loss.

This article highlights common factors that could result in overages.

1. Construction Errors

According to research, about 10% to 25% of project costs are caused by construction errors with billions of dollars lost through such errors each year.

Any errors that arise during the project need to be rectified and are typically costly. For example, if something is not built as it should be, or an error was made in the design, it has to be rebuilt. What this means is twice the originally estimated cost is utilized on one part of the project, and the contractor may have to pull funds from elsewhere to cover it.

The desire to maximize profits or reduce losses on an underbid job could be costly long term, especially if it results in call backs by unsatisfied project owners. Taking the time to work on the project as specified not only results in a successful project but also provides future job opportunities through recommendations by the project owners. By adding an extra level of scrutiny to the project and design, projects won’t have to suffer from overruns resulting from necessitated corrective work.

2. Wrong Assumptions

These include items that are assumed to be covered under a contractor’s or sub-contractor’s bid but aren’t. Project work based on inaccurate assumptions not only wastes financial resources but also time. The entire project could be in jeopardy and eventually fail if such assumptions are not corrected.

To avoid making the wrong assumptions, it is essential to have a clear communication in the plans, specs, and contracts as well as to document everything that comes up. Communication also includes getting input from stakeholders and key project team members to identify the project needs, set expectations, and identify risk mitigation strategies.

3. Inadequate Allowances

Construction contract allowances are itemized budget estimates provided by contractors and can be useful to help plan for cost of materials that are unknown at the time contract documents are executed. Provision of inadequate allowances is a common problem whereby electrical contractors provide estimates with low material allowances.

Sometimes electrical contractors put in unrealistically low allowances to keep their bids attractive. However, this only leaves room for costly losses and shrinking profit. Avoid this situation by setting realistic allowance figures.It is also helpful to pick materials early on, so the estimate reflects the actual costs of the materials. Another way to overcome this is to itemize and define allowance items clearly avoiding oversimplifying them or putting them in bulk portions of the project such as “landscaping.”

Read more on how to be competitive on job bids without having to be the lowest bidder.

4. Omissions

An omission refers to materials or work that is accidentally left out of the plans or in the specifications at bid time and are required to complete the project. Omissions could lead to loss of profits since the costs of the omitted items are deducted from the original contract value.

Avoiding omissions requires a high level of organization. Coming up with a checklist and detailed plans and specifications could be the difference between making profits off the project and incurring huge losses off a project that was intended to be profitable.

5. Price Changes

Price changes are almost inevitable. The cost of materials and labor may rise between the time the estimate is provided and the occurrence of the project. Labor cost changes could occur mid-project when more workers are added in order to complete a project on time. More funds are normally needed to hire these workers, affecting the profitability of the project. This is because labor costs are the largest non-material cost in any project.

Change in material prices, on the other hand, happens for a variety of reasons; one of them being supply and demand. When there is perceived shortage of materials, dramatic price swings happen, and it is best to avoid this by paying close attention to factors that could affect pricing when estimating costs.

Checking material prices before committing to a project allows time and room for negotiation with suppliers in order to lock in prices for the project. Such early planning is also helpful in ordering materials on time to avoid expensive costs associated with material availability and rushed orders.

6. Job-site surprises

Jobsite surprises occur when there are unexpected hidden conditions that could have been detected by a more diligent inspection but did not. Examples of these would be underground ledge or water problems or hidden insect damage or wood decay.

Discovery of an unknown condition has the potential to greatly increase the costs of the construction project. These unexpected discoveries can be minimized by doing a thorough inspection upfront. Bringing in a specialist who is trained to identify such conditions could save the project a lot of unexpected high costs which can translate into a higher profit margin.

7. Unplanned Change Orders

Change orders refer to an amendment within the contract that changes a contractor’s scope of work. An example of this would be introduction of new specs, fixes, or additional requirements after initial models have been completed.

Because of the complex nature of the construction projects, change orders are inevitable. But failing to plan for them can cause cost overruns. The additional time, manpower, and materials required to complete such added-on requirements may negate the original project budget.

Anticipating change orders ahead of time in the contract phase could help avoid cost overruns. Using construction software that helps simulate different solutions for scope changes pre-construction could also be helpful. The key to managing change orders is to be proactive— anticipate and plan for them to reduce the likelihood of cost overruns in the construction project.

Learn more about shrinking profit margins and other problems that face the construction industry.

On average, 35% of construction projects are predicted to experience a major change mid-project which often leads to work inefficiencies hence a decrease in productivity. One such change is overmanning which refers to an increase in the number of labor crews that are above the optimum. This is a resolution that electrical contractors turn to, when a project is behind schedule or needs to be accelerated.

Overmanning is normally a preferred resolution compared to overtime or shift work because it produces a higher rate of progress while eliminating the physical fatigue problems brought about by overtime and coordination problems associated with shift work. However, it introduces additional problems.

There is a false assumption that increasing the manpower on a site will lead to increased productivity. However, overmanning often decreases labor productivity in electrical construction but it is essential to look into issues such as overmanning because decreased productivity affects the profitability of any construction project since labor is the largest non-material cost in any project.

Below we highlight some of the negative impact that overmanning has on labor productivity within the electrical construction industry.

1. Site Congestion

This occurs when there is an unanticipated increase in the crew size on a job site. Several workers end up occupying and sharing the same space causing a stacking of trades— a practice that limits worker mobility on the job site.

Working in a confined space limits movement within a work site resulting in non-productive labor. Restricted mobility can also lead to decreased efficiencies as workers scramble for limited resources because of an increased number of workers.

Other challenges associated with such conditions include difficulty locating tools, increased loss of tools, prevention of optimum crew size, and additional safety hazards. Congestion could also lead to difficulty accessing the work site.

2. Introduction of Unskilled Labor

As project owners demand the same completion time, there comes a pressure to increase manpower. This then leads to hiring workers that may not be as skilled or properly trained to complete the project at hand. The replacement labor may not just be unskilled but costly as contractors are left with no other option but to increase manpower. The cost per unit work hour associated with the increase in labor is normally higher than the initial budget set aside for labor.

Additions to the team also bring about the need to train new workers which may be costly and consume more time, eating into the project time. Replacement workers are usually not familiar with the work site. The new workers do not only require getting familiarized with the size but also learning the work scope, tool locations, work projects, and so on. This affects the original team since they are forced to stop the work they are doing or move at a slower pace to show the new workers what to do or allow them to catch up with the project.

Inefficiencies also arise with the disruption of rhythm as new workers are added onto projects that were already ongoing. When workers are added to a new project, it leads up to breaking up the original team effort and rhythm. Productivity within a project requires that teams are working in sync and cooperate to complete a project by the predetermined completion date. Having new workers means time lost catching up on the requirements of the project as well as re-grouping teams as workers struggle to get on the same page.

3. Dilution of Supervision and Coordination

With an increase in number of workers, coordination and supervision become more difficult. Engineering questions and requests for clarification may not be provided in a timely manner due to greater demand within the originally placed period of the project. Such difficulties could cause errors and omissions within the project which trickle down to the cost of the project. Any errors could potentially bring up the overall cost as contractors work to correct them.

A dilution of supervision could also mean workers failing to show up when required. Absenteeism on some electrical construction jobs has been as high as 20%— a number that could be exacerbated by a lack of coordination with an unexpected increase in workers. With labor costs making up as much as 40% to 60% of an electrical contractor’s overall costs, it is essential to maintain a stable and productive workforce hence the need for a high level of coordination and organization.

4. Higher Accident Rate

Accidents within construction sites are normally direct results of unsafe conditions and activities which could be brought about by overmanning. For example, accidents could happen from working in close proximity to different teams and crafts. This results from noise, dust, exposure to smoke emissions and explosion zones or other hazardous risk. Exceeding noise and vibration of equipment are recognized to be factors that cause accidents within construction sites.

An unexpected increase in the number of workers could also translate to limited protective gear and equipment which potentially exposes the workers to site hazards. Poor site conditions stemming from congestion can cause accidental bumping into other workers or into tools lying around which could lead to injuries.

Higher accident rates cause workers to feel unsafe in their work environment which may lower morale.

5. Shortage of resources

Though the number of workers increases on a project site, the number of resources does not necessarily increase as well. What this means is that workers have to make do with the existing limited resources. An unintended downside of this though is that it can cause worker dissatisfaction due to poor work conditions.

Decreased productivity also results from inefficiencies brought about by insufficient quantity of tools to meet the needs of the project. In other cases, tools and equipment could be available and sufficient but end up getting misplaced or lost and difficult to locate as the site is congested.

Learn more about factors impacting productivity within the electrical construction industry.

The market volume of material handling equipment has been on the rise encompassing about 1.5 million units in 2019 up from 974,000 units in 2011. These numbers point to a rapidly and consistently growing market. This growth combined with the fact that material handling comprises more than 20% of the U.S economy, means that there has never been a better time to adopt these solutions.

Below we look at some of the benefits of using material handling equipment.

1. Save Money

With decreasing profit margins within the construction industry, saving money is a big consideration for logistics and manufacturing projects. Material handling equipment may initially be costly but is a huge money saver in the long run. Using such equipment delivers products more efficiently without stretching the budget or adding more manpower.

Reducing the number of people needed to sort, ship, and handle items not only saves money but dramatically reduces the time it takes to ship a package. What this means is that work gets done faster with less people.

Equipment such as robotic delivery systems help with load consolidation and route planning, which helps save on resource expenditures.

2. Maximize Space

Space within the production floor is important for ease of movement of staff, products, and equipment. Storage and handling equipment such as stackable frames help maximize space on the production floor as they help with holding products that are not being transported. In turn, this saves on storage space and maximizes space utilization on the production floor.

Using storage equipment such as stackable frames means materials can be stacked higher resulting in more space on the facility floor. Equipment such as Automated storage & Retrieval Systems (ASRS) that help with inventory storage and retrieval also maximize floor space by storing large volumes of material within a small footprint.

3. Decrease Product Damage

Manual movement of materials or products across the facility floor could result in product damage if the materials are not handled carefully.

Requiring facility staff to lift and transport goods manually increases the risk of product damage. For instance, this could happen when one accidentally drops products, hence destroying them.  This is where material handling equipment comes in, delivering products safely thereby decreasing product damage. This is also a money saver for the facility since damaged products could prove to be costly if the facility is required to replace and ship them all over again.

An example of such equipment would be forklifts that are meant to lift heavy materials, protecting them from accidental drops and damage.

4. Improved Customer Service

Shorter shipping and delivery times translates to more business and happier customers. Using material handling equipment ensures faster production and delivery times facilitating faster order fulfillment.

Ensuring that customers receive their shipments on time and undamaged, not only helps maintain the customer base but brings in new business through customer referrals.

5. Increase Work Efficiency and Productivity

Staying competitive within manufacturing sector (predicted to have a 1.9% growth in 2021), requires increased efficiency for operations and logistics.  Incorporating material handling solutions is one way to increase efficiency as it enables workers to focus on one project at a time. Without having to do everything at once, workers can prioritize projects which improves productivity.

Material handling systems also increase efficiency of floor staff through automating labor. Consequently, workers are able to accomplish more work in less time.  These systems are also able to increase the unit load by reducing the number of trips in a warehouse facility.

Material handling solutions not only increase work efficiency but also productivity. When workers are forced to handle bulk materials, they experience fatigue which often decreases productivity. Material handling equipment increases productivity by taking this burden off the workers’ shoulders. Equipment such as automated conveyer belts also increase productivity by speeding up the manufacturing speed and cycle.

6. Reduce Accidents in Facilities

Much of the material moved across a facility floor is heavy and comes in bulk. Manually moving such materials can not only result in product damage but also in employee injuries .

The construction industry is already known to present many hazards to its workers resulting in a higher injury rate compared to other industries. Construction activities such as lifting heavy and bulk materials could potentially cause lifelong injuries.

Reducing the number of materials to be handled manually reduces the number of potential back and hand injuries. Therefore, opting for material handling solutions is a measure that can help improve the safety of facility workers.

Systems such as automated conveyer belts use integrated automation to move materials around the manufacturing facility with little manual effort.  As the unit load increases,  lift trucks mitigate the risk of employees overexerting themselves in the event that  the total weight exceeds their physical limitations.

7. Attract employees and Improve Worker Satisfaction

Implementing ideal material handling systems that keep workers safe  will help attract good quality workers. This type of environment also attracts high caliber employees with experience and training to handle such systems.

Employees are also able to perform tasks with confidence since these systems help ensure accuracy, control, and safety. In turn,. this promotes a positive workplace culture and  a higher level of employee satisfaction.

Incorporating material handling equipment means that workers will have an easier time performing their job. They will be able to prioritize projects and accomplish more in a shorter period, promoting not only their satisfaction levels but also their productivity. When inventory is at the right place at the right time, workers are not forced to search for misplaced items. Employees also do not have to deal with damaged products which could result in frustration and lower morale.

Learn more about material handling equipment and how they can be implemented in any manufacturing and logistics project.

Productivity is a challenge within the construction and manufacturing industry. Increasing productivity within the construction and manufacturing space means increasing the efficiency by which processes run. One way to do this is by adopting material handling equipment meant to help with handling products and materials within a facility. Using these systems of equipment facilitates the handling of products more efficiently without stretching the budget to add more manpower, hence increasing productivity.

Material handling comprises more than 20% of the U.S economy and is relevant even in today’s ongoing Covid-19 pandemic. With the production of Covid-19 vaccines, ample manufacturing capacity is required which means that any manufacturing plant needs to scale up its processes and make them more efficient.

Therefore, material handling solutions are very important in today’s economy and with this comes the need to understand how to incorporate material handling equipment to any logistics or manufacturing project.

Here is a guide to material handling systems.

What is material handling?

Material handling refers to the movement, storage, control, and protection of materials and products in manufacturing, warehousing, distribution, consumption, and disposal. This process is normally useful in retail stores, warehouses, manufacturing plants, or in any facility where heavy or bulk materials are transported.
There are different types of material handling equipment based on the needs of the project. These types can be classified into 4 categories:

1. Storage and Handling Equipment

Storage and handling equipment are non-automated equipment that hold the materials when they are not being transported. The duration in which they hold these materials could either be short-term or long-term depending on the needs of the facility. For example, some materials are held at manufacturing facilities before they are shipped to their destination.

Using such equipment not only increases efficiency but also maximizes space utilization on the production floor. The increase in efficiency comes from the ease of material access. Storage and handling equipment helps the production team quickly access the materials and products they need and transport them as needed.

Examples of these equipment include:

• • Racks– there are different types such as sliding racks and pallet racks. They save floor space and keep materials accessible
  • Shelves, bins, and drawers– these are commonly used as storage solutions. They help with storing smaller materials
  • Stacking frames– these are a stackable form of equipment that can be used to save space without damage to the products
  • Mezzanines– these are elevated platforms installed between the production floor and ceiling to provide more space on the manufacturing floor. They can be movable and free-standing

2. Engineered/Automated Systems

Unlike storage and handling equipment, engineered systems are often automated. They are generally made of several units and help with storage and transportation of materials.

A popular example of an engineered equipment is an Automated Storage & Retrieval System (AS/RS) also called AS-RS or ASRS. ASRS is designed to buffer, store, retrieve product and inventory on demand. This system, just like other engineered systems, is advantageous in that it automates low-value and easily repeated tasks of inventory storage and retrieval

Other examples of engineered or automated systems include:

• • Conveyer systems– Conveyer systems such as automated conveyer belts use integrated automation to move materials around the manufacturing facility with little manual effort
  • Automated guided vehicles– these are mobile robots or computer-operated trucks set to move along predetermined pathways to move large materials around the warehouse.
  • Robotic delivery systems– these are automated systems that help move products along assembly lines or around the manufacturing floor

3. Industrial Trucks

Industrial trucks are often used to transport heavy materials or large quantities of materials around the manufacturing floor. Industrial trucks come in various sizes and forms depending on the need of the facility. Some industrial trucks are small enough to be hand-operated and some are big enough to be driven.

Other variations include:

• • Stacking trucks used to transport and load products
  • Non-stacking trucks used only for transportation and not loading
  • Powered industrial trucks that have a cab making it easier for the operator to pick up heavy materials
  • Power-assisted trucks lift materials using manual means and have to be pushed into position but can also be operated via controls

Some examples of industrial trucks include:

• • Side loaders– these are specialized vehicles that can work in the narrowest of aisles making them ideal for facilities with aisles that are close together
  • Walking stackers – they operate like forklifts but do not have a place for the operator to ride in
  • Hand trucks– these are also referred to as dollies. They have two wheels, a handle and a ledge on which to set boxes and are manually operated
  • Platform trucks– these are hand trucks with wider platforms and sit low to the ground. Unlike hand trucks, they come in both manual and electrical forms
  • Order pickers– these lift operators off the ground to higher hard to reach storage shelves or materials
  • Pallet jacks– often manually pushed, they are used to move things around the manufacturing floor. They are considered a very basic form of forklifts

4. Bulk Material Handling

As the name suggests, bulk material handling is used for storing, controlling, and transporting materials in bulk.

Some examples of bulk material handling equipment include:

• • Conveyer belts– automated conveyer systems are considered both engineered systems and bulk material handling; they usually move materials across the warehouse on the conveyer belt
  • Stackers– often automated, stackers will move products onto stockpiles
  • Reclaimers– these are large machines used to pick materials from stockpiles
  • Bucket and grain elevators– often called a grain leg, these machines move bulk materials vertically
  • Silos– these are towers used to hold materials (such as grains which is why they are hence often used on farms)
  • Hoppers– these are shaped like funnels and are used to discharge materials into containers

Understanding material handling systems is helpful when it comes to picking the right equipment for any manufacturing plant.  The type of manufacturing in the plant will determine the material handling equipment used.

To learn more about other issues facing the construction industry, check out our article highlighting 5 problems facing EPC companies. 

Construction bidding is highly competitive. A good bid though can make the difference between winning and losing a contract. Most contractors lose more bids than they win. Typically, general contractors win only 1 out of 6 bids and subcontractors winning only 1 out of 7 bids.

With shrinking profit margins within the construction industry, it is essential to address how electrical contractors can improve their construction bid process. There is so much more to crafting a successful bid than being the lowest bidder.

Below we highlight 5 ways electrical contractors can be competitive and successful on construction job bids.

1. Research

There are many resources available for discovering projects to bid on. For example, Dodge Analytics and ConstructConnect provide databases covering different construction projects for contractors, subcontractors, and engineers. These are both great digital databases for discovering the ideal job to bid on based on an electrical contractor firms’ size, internal electrical specialists, and revenue. For example, a project could require certain specialties that an electrical contractor does not have which means there is a lower chance of being selected for a bid.

Investing time and effort in bidding for certain projects that will result in overmanning, stacking trades, out-of-sequence work, or material lead time could translate to lower margins.

Thoroughly surveying the job site before entering a bid could help the electrical construction firm avoid entering into a costly project that the firm is not well suited for. Visiting the site could also help identify hidden costs that could arise and negatively impact the cost estimate of the project.

Politics plays a part in construction projects. Investigating how local planning rules could affect a building project is critical information for avoiding significant delays that will cause overage. For example, the local government could choose to alter zoning policies over a specific piece of land, bringing the construction project to a stop.

Doing research also means identifying the decision makers in the project. This ultimately helps the contractor establish trust and maintain a relationship with them. Establishing trust with the people you could potentially work with puts them at ease and in turn, they trust you with their project.

2. Utilizing new technology

The need for contractors to utilize new technology and software has been driven by the growth within the industry. Consequently, there’s a need to increase efficiency and improve profit margins. According to a report by Electri International, the number of technology solutions available to contractors has grown to more than two thousand.

Tech tools are not only changing how construction companies work with materials but also entire project processes. Technological advances are making such projects smarter. For example, using Building Information Modeling (BIM) to generate digital representations of buildings.

Contractors should take advantage of such digital solutions to improve their bidding processes. Within the bidding process, the right tools and technology could be used to systemize the process of coming up with a good proposal. These tools not only minimize the investment in time on the proposal but also maximizes a contractor’s efficiency to create solid bids. Tech tools can also be used in communication which is essential during the bidding process as well as scheduling and project management.

Some of the tools include:

• • • Bid Express: a free platform that hosts bids for agencies and organizations that want to post bids
    • Fieldlens: a mobile app that helps improve project communication between a general contractor, subcontractor, architect, and owner. Through this app, an electrical contractor can document job issues with photos and keep track of to-dos
    • Dodge Global Network: a website and a mobile app that allows construction professionals to search for projects and download construction plans
    • Autodesk BIM 360: a program that allows contractors to centralize their project data and is great for highlighting safety and quality issues as well as managing field data.

3. Improving communication

From connecting with the decision makers of a project to finalizing the bidding process, communication is key to the success of the process. Contractors who are unsuccessful at communicating with the project stakeholders, subtrades, and other professionals on the job site may well fail to win the contract.

Communication in the bidding process presents itself in several ways:

1. 1. 1. Be available in case of any questions
      2. Make sure everything is clear and if not, provide any clarification that may be required
      3. Listen to your clients
      4. Provide a single point of contact for the client

Communication goes beyond establishing a good rapport with the clients. It also includes making sure the contractor has a good internal communication system within their team to ensure the bidding process is as streamlined as possible. There are a number of good project management tools to assist with documentation, follow-ups, updates, and creating a transparent project timeline (see below on project timelines).

4. Time is of the essence

Rushing a bid could mean leaving out details and creating many avoidable errors. However, taking too much time crafting a bid proposal could mean competitors win the bid instead. It’s best to provide ample time to craft a compelling bid proposal. A pre-crafted, well-organized timeline for all bids will help a contractor stay ahead of the competition.

It’s also important to do research and give a detailed timeline to the clients. This increases the client’s confidence in the contractor’s ability to meet deadlines. However, ensuring that the project is completed on time is even more important in order to maintain the client’s trust for future projects.

An example of a timeline that could be helpful is:

Day 1: Put together the proposal.
Day 4: Submit the bid.
Day 8: Reach out to the client for some face-time.
Day 12: Remind the client about the submitted proposal.
Day 20: If awarded contract, execute the proposal.

The key to any timeline is staying on top of things and being ahead of the competition.

5. Set yourself apart from the competition

While crafting the proposal, the contractor may want to highlight what makes them unique and why the bid should be given to them and not their competitor.

Making sure an electrical contractor has a competitive advantage other than cost could be the primary driver for winning the construction bid. It is essential to highlight this differentiating factor within a proposal and show what makes the business stand out.

For electrical professionals, consider using value-added solutions that help reduce time and costs for the project. Ensuring a project is completed under budget will help ensure labor productivity and that the job doesn’t run over the projected timeline.

This will not only help the electrical contractor with the bidding process but will also mean less time spent on one project and the ability to bid on (and hopefully win) more projects as a result of having saved time.

Learn more about other obstacles that face electrical contractors and how to avoid them.

Industrial automation refers to computerized systems within manufacturing that handle different processes and machineries in place of human involvement. Most of the processes handled by such systems would be perceived as being repetitive, mechanical, or in other cases, both.

With modernization and technology, industries have started adopting automated systems to increase efficiency and productivity at work. The vast adoption of these systems has seen the industrial automation market growing globally reaching 127.04 billion dollars in 2018 and expected to grow to a staggering 296.70 billion dollars in 2026, according to Fortune Business Insights.

While these statistics show an increasing adoption of automation systems, they do not break down the numbers to the widely varying automation systems that exist. How then would you know what automation system is the right one for your business?
The right automation system for your business is determined by the labor conditions, competitive pressure, manufacturing and assembly specifications, work requirements and the cost of labor. Below we highlight the different types of automation systems, and the industries they are typically found in.

By looking at the types of systems mentioned below and considering the factors mentioned above, you should be better suited to pick the right automation system for your business.

Types of Automation systems

1. Fixed Automation

Also referred to as hard automation, fixed automation systems carry out a single set of tasks without deviation. Because of its function, this type of system would typically be used for discrete mass production and continuous flow systems. An example of a fixed automation equipment would be an automated conveyer belt system designed to increase efficiency by moving objects from point A to B without minimal efforts. Just like all other fixed automation system equipment, automated conveyer belts perform fixed and repetitive operations to achieve high production volumes.

Manufacturing processes compatible with this system would be:

• Repetitive manufacturing which allows for variations within the manufacturing process although limited (e.g. in food packaging or the textile industry)

Adopting a fixed automation system such as automated conveyer belts and including value-added solutions meant to cut both time and labor costs in their installation, eases off competitive pressure for your business, increases your profit margin, and keeps you one step ahead of the competition. An example of a value-added solution would be using bundled wire for automated conveyer systems. This not only cuts down installation time, but also lowers labor costs and keeps employees safe from injuries associated with pulling wire during installation.

2. Programmable Automation

As the names suggests, programmable automation runs through commands delivered by a computer program. This means that the resulting processes can vary widely with changing instructions given to the computer through a series of code. However, as the programming efforts are non-trivial, the processes hence the tasks do not change much. This type of automation is common in mass production settings which produce similar types of products that utilize many of the same steps and tools like in paper mills or steel rolling mills.
Manufacturing processes compatible with this system would be:

• Repetitive manufacturing whereby the same products are being produced over a long period of time and in large batches. These types of equipment can keep carrying with very little human supervision. They are typically used in automobile and machinery manufacturing.

The initial set up of programmable automation equipment may require a high cost but because the processes are continuous and relatively unchanging, they tend to be less expensive in the long run.

3. Flexible Automation

Also referred to as soft automation, this type of automation is utilized in computer-controlled flexible manufacturing systems and allows for a more flexible production. Every equipment receives instructions from a human-operated computer which means that the tasks can vary widely with changing code delivered to the computer. This type of automation would typically be used in batch processes and job shops with high product varieties and low-to-medium job volume, such as in textile manufacturing.

Manufacturing processes compatible with this system would be:

• Discrete manufacturing which allows for variations within the manufacturing process although limited e.g. in food packaging or the textile industry.
• Job shop manufacturing which occurs within set production areas and is more labor intensive compared to other forms of manufacturing. An example would be making custom machinery.
• Batch process manufacturing whereby raw materials move through the production line in batches such that there is a pause between each step as a batch moves through (e.g. in the pharmaceutical industry and in paint manufacturing).
• Continuous process manufacturing which offers consistent processing as the manufacturing process from beginning to end does not change. This type of manufacturing is commonly used in food and beverage manufacturing as well as oil and gas manufacturing.

4. Integrated Automation

Integrated automation involves the total automation of manufacturing plants as it is entirely handled by computers and control processes with minimal human involvement. Computers can design the necessary parts, test the designs, and fabricate the parts. Integrated automation, like flexible automation, is compatible with both batch process manufacturing and continuous process manufacturing.

Technologies that use this type of automation include:

•  Computer-aided process planning
•  Computer-supported design and manufacturing
•  Computer numerical control machine tools
• Computerized production and scheduling control
• Automatic storage and retrieval systems
• Flexible machine systems
• Automated material handling systems, e.g. robots
• Automated conveyor belts and cranes

Learn more about 5 U.S companies that are leading the charge in the manufacturing of automated conveyor belt systems 

Download our new infographic on problems facing EPC companies.

Working in any industry presents several challenges and the construction industry is no exception. For instance, being one of the industries most resistant to change, the construction industry has had to deal with scheduling issues and technological shortcomings — the effects of which trickle down to productivity of workers within industry and bidding issues. These are just some of the many challenges impeding the construction industry.

Here are some more challenges worth looking into:

1. Labor shortage

As per data verified by the Job Openings and Labor Turnover Survey in 2009, the US labor shortage within the construction industry is 350,000; meaning that the industry is short of 350,000 workers. This shortage came about as a result of the 2008- 2009 recession which saw about 2 million workers exit the industry and not returning since. The growing shortage of workers has been identified as one of the biggest threats facing construction, an industry that heavily relies on labor.

Besides the recession, the lack of skilled workers and age have also contributed to the labor shortage. For instance, age has been identified as a looming threat to the industry. Finding skilled workers has proven to be very challenging as the old workforce retire leaving behind a gap to be filled by millennials who would prefer to pursue a college education or work in retail or transportation. 

Some of the problems that accompany the labor shortage are:

• Longer project completion times
• Additional costs over the lengthened duration of the project
• Decreased productivity

Since the construction industry is a big part of the U.S economy (accounting about 6.36% of the U.S economy according to a report in 2017), it is essential to address the issue of labor shortage.

2. Communication

Among EPC (Engineering, Procurement, and Construction) companies, a single project could be spread out over several teams from the engineering team to general contractors. Construction projects are a mass collaboration requiring high cross-team communication.

However, these teams tend to be highly fragmented and working in silos presents a major challenge if there’s a lack of cross-team collaboration. This breakdown of communication not only lowers productivity but could also be financially costly.

Additionally, the lack of a streamlined means of communication can be costly. A lot of documentation is done via paper making it difficult for follow ups by the various teams and making it even harder to learn any historical information about the project at hand.

Choosing the right method of communication among all project stakeholders and making sure it is streamlined is vital to the success of any construction project. Investing in technology for communication management could also see an increase in project productivity and accuracy of project information. Of course, training in such technology would be required to ensure its implementation success.

Examples of communication technology include:

• Slack: an instant messenger chat tool for companies in which you can easily create chat groups, review past conversations, and share documents within groups.
• Microsoft Teams: similar to Slack but included in the Microsoft Office suite.
• Trello: a project and task management tool that organizes your team’s projects into boards.
• Asana : a tool designed to help teams organize, track, and manage their work.
• Monday.com: a project management tool that could also be used as a CRM.

3. Shrinking profit margins

There is a gradual reduction in profit over time within the construction business. A 2019 study showed that although gross profit margins between 2008 and 2012 were rapidly increasing from 10% to about 20%, they began rapidly declining after 2014. Analysis of the results of this study revealed that nearly 1 out of every 2 projects will result in a loss. These numbers are quite shocking and paint the devastating picture of shrinking profit margins in the industry. This is not a problem that is experienced by large contractors as small general contractors and subcontractors are equally harmed by the reducing profit margins.

Since this is an issue pointing to the numbers, to ensure increased average profit margins, construction business owners need to pay attention to metrics impacting their profit margins. Some of these include profit, equity, job costs and estimates, cash flow, liability, contracts, sales, overhead, and receivables. Business owners need to make sure that they really understand these metrics and how they play out in their business including how to alter them to ensure their profit margins increase.

Read more on how to increase your profit margins using these metrics. 

4. Safety on construction sites

Construction work is known for its reliance on highly physical and manual labor. Construction sites present many hazards to their workers. Injury rates on workers in the construction industry is higher than the average of all other industries— the industry reported to have the highest accident rate of all other major industries, with the annual resulting cost estimated at $12 billion. Construction activities such as lifting, pulling, bending, or pushing could result in injuries that last a lifetime further reducing productivity within the industry and increasing labor shortage.

Employers should prioritize the safety of their workers and implement safety measures on construction sites (such as providing equipment for fall protection or requiring employees to wear a body belt attached to their booms or baskets when working from an aerial lift).

Some value-added services meant to lower costs and time for construction projects could also serve to reduce injuries among construction workers. For example, pulling wire has been identified as one cause of injury. For electrical contractors, this comes in the form of pulling wire through conduit which can be quite strenuous and cause back injuries. Value-added solutions such as bundled wire could not only lower labor cost for construction projects and save time, but also keep employees safe from injuries.

5. Rising material and labor costs

Construction pricing fluctuates. In 2018, the construction prices increased 5.07%. This fluctuation in prices is attributed to rising material and labor costs. For example, prices of copper and aluminum fluctuate as a result of commodity trading, making the prices of wire and cable conductors fluctuate. Labor costs, on the other hand rise even more with the existing labor shortage. Having long term contracts can ensure protection against price fluctuations helping to mitigate high labor costs for contractors.

An option to consider to lower material and labor costs in this case would be value-added services and solutions. Value-added services help reduce time and involvement in a project resulting in lower costs to help maintain a stable profit margin. For contractors, these would mean less time on one project and the ability to spread out their time on other projects — consequently increasing their income potential. Examples of these services include paralleling, pulling heads, cut to length services and vendor managed inventory. 

Learn more about One-Pull’s bundled cables as a value-added solution and how these cables could save you time and money on your next construction project.  

The global conveyor systems market was $5.23 billion in 2019, and is projected to reach $7.43 billion by 2027. That’s a compound annual growth rate of 4.6%. While historically the industrial and construction sectors have been the main drivers of conveyor system technology, the past few years have seen new demand in e-commerce, food and beverage, and pharmaceuticals.

Our bundled cable has an array of applications in the wiring for automated conveyor belt systems. Below we’ve highlighted 5 U.S. companies that are leading the charge in the manufacturing of automated conveyor belt systems.

1. Hytrol

Headquarters: Jonesboro, Arkansas
Founded: 1962

When you look at the top 5 industries driving the automated conveyor belt systems market, Hytrol is an industry leader in three of them: pharmaceutical, food and beverage, and manufacturing. A fourth specialty of Hytrol’s is e-commerce, which is one of the primary reasons the conveyor belts system industry is projected to grow over the coming years.

2. BEUMER Group

US Headquarters: Somerset, New Jersey
Founded: 1935

Bundled wiring helps expedite the process of getting the wire installed in material handling equipment, such as the type of equipment the BEUMER Group manufactures.

BEUMER Group has locations all over the world. They have 4,500 employees and have annual sales at over $1.1 billion. It’s not just BEUMER’s size that sets them apart, but also their specialties: whereas most of the conveyor industry is being driven by consumer packaged goods via e-commerce, BEUMER focuses heavily on the industrial sector. Mining, chemicals, cement, and ports are several examples they highlight.

3. Bastian Solutions

Headquarters: Indianapolis, Indiana
Founded: 1952

Bastian Solutions is one of the largest independent material handling integrators in the world, and they’re also a Toyota Advanced Logistics company. Bastian works with their customers’ specific needs to develop customize solutions. With every project and installation being unique, this is another use case where bundled cable would be a perfect time, material, and cost-saving value-added solution.

4. Dematic

Headquarters: Atlanta, Georgia
Founded: 1819

Dematic is USA-grown global powerhouse in automated conveyor systems. Headquartered in Atlanta, they have 60 engineering facilities in 25 countries, employ more than 7,000 people, and have installed over 6,000 systems.

5. Key Technology, Inc

Headquarters: Walla Walla, Washington
Founded: 1948

Key Technology has a unique specialty: conveyor systems for food processors. Key aims to increase yield, efficiency, and profit for their customers with an expansive range of products for every use case. To fill every need a client may have, their conveyor belts work together from transport to sorting to packaging. They’ve even adapted their products to the needs of the pharmaceutical industry. With locations in Washington, Oregon, and California, Key Technology is a strong automated conveyor belt systems solution for the right project.

Most modern automated conveyor systems projects have one thing in common: their use cases aren’t exactly the same as anyone else’s. Like most industries in 2020, conveyor belt systems are adapting to meet new challenges. Bundled cable is sorted, bundled, labeled, and cut to meet the fast-changing needs of businesses and the machines that make them tick.

Learn more about how bundled cable can help electrical contractors save time in installing wiring in automated conveyor belt systems.